The underlying budget
balance is measured as revenue less underlying outlays
(defined as outlays excluding net advances). Net advances
consist of net policy lending (new policy lending less
repayment of past policy lending) and net equity transactions
(equity injections/purchases less equity sales). For
further details on the underlying budget balance concept,
see Appendix
B of Statement 7.
Starting point estimates
include parameter variations since the 1996-97 Budget
and policy decisions taken prior to the MYEFO. They
exclude the effects of decisions taken by the Government
since the MYEFO.
The extent of the deterioration
in the starting point estimate for 1997-98 is masked
in Table 2
by the favourable impact on 'other variations' that
results from shifting provisions in the Contingency
Reserve to 'policy decisions'. Similarly, the improvements
in the starting point estimates for the outyears are
overstated in Table
2.
Includes public debt
interest savings from measures affecting the headline
balance.
Although the Charter
of Budget Honesty Bill has not yet been passed, the
Government is following the requirements of the Charter.
In reporting against
this strategy, the 1997-98 Budget and future budgets
will provide outcomes and forward estimates for the
budget and general government sectors. These data will
be prepared on the basis of the budget classification
framework and the Australian Bureau of Statistics (ABS)
Government Finance Statistics framework, as set out
in Appendix
D of Statement 7. A comprehensive accrual budgeting
and reporting framework will be introduced for the
1999-2000 Budget.
The precise impact may
vary from announced measures as a result of revised
costings.
The general government
sector comprises the budget sector and some non-budget
sector agencies. The budget sector consists of those
departments and agencies whose transactions are recorded
on the Commonwealth Public Account (CPA). The activities
of this sector dominate the general government sector.
The non-budget sector includes government authorities
such as the ABC and CSIRO which operate outside the
CPA (see Statement 7
for further details).
As public trading enterprises
are largely run on a commercial basis, their saving
and investment decisions align more closely with those
of the private sector than the public sector. Therefore,
their contribution to fiscal consolidation and public
saving is excluded from this discussion.
In this Statement, unless otherwise specified, monthly and quarterly data are expressed in seasonally adjusted terms. The current price GDP (Income) measure is used as the nominal measure of GDP, while the GDP (Average) measure is the constant price GDP series used.
In 1995-96, 37 per cent of Australia's merchandise exports went to the East Asian region (excluding Japan), up from 28 per cent in 1990-91.
Australia's MTP in order of importance are Japan, South Korea, the United States, New Zealand, Singapore, Taiwan, China, Hong Kong, the United Kingdom, Indonesia, Malaysia, Thailand, Canada, Italy, Germany, the Philippines and France.
Because of data limitations, the forecasts contained in Table 2 are on a calendar year basis although the GDP and inflation forecasts discussed in the text have been prepared on an Australian financial year basis.
These issues are discussed in more detail in Statement 3.
Household income and saving are measured net of estimated economic depreciation.
The ratio of actual to expected investment expenditure.
The comparison is made with the 1980s in order to cover a complete economic cycle.
Other broader measures of profitability, such as the profit share for all private non-farm enterprises, are also forecast to increase in 1997-98.
Australia's main ETM markets in order of importance in 1995-96 were New Zealand, the United States, Hong Kong, Singapore, the United Kingdom, Japan, Indonesia, South Korea, Malaysia and Thailand.
The December quarter 1996 CAPEX survey reported a deferral of some construction projects and delays in some projects already under way.
Employment growth is estimated to have been around 1 and 1½ per cent in the years to the June quarter 1996 and 1997, respectively, although the profile of growth in 1995 and 1996 has meant that year-average growth was strong in 1995-96 and subdued in 1996-97.
Employment trends over recent years are discussed in detail in Part I of last year's Statement 2.
The more subdued behaviour of the ANZ Bank series appears to reflect the fact that not all vacancies are advertised in newspapers. In addition, the propensity for public sector vacancies to be advertised in more than one newspaper may mean that fiscal consolidation at the Commonwealth and State levels may be disproportionately affecting the ANZ Bank series.
Further detail on the budget outlays estimates is contained in Statement 4, while historical data on outlays excluding net advances are at Appendix E of this Statement. Details on Commonwealth general government sector outlays are at Appendix F of this Statement and in Statement 7.
Includes public debt interest savings from measures affecting the headline balance.
More detail on the budget revenue estimates is contained in Statement 5, while historical data on revenue are at Appendix E of this Statement. Details on Commonwealth general government sector revenues are at Appendix F of this Statement.
Provisions are receipts
and payments by the budget sector of PTE superannuation
provisions.
The increased relative
importance of the services sector has occurred despite
increases in output in each of the major sectors.
GATT, International
Trade and the Trading System, 1993.
ABS, Labour Force Australia,
Cat. Nos. 6204.0 and 6203.0.
ABS, Trade Union Members,
Cat. No. 6325.0.
ABS, Labour Force Status
and Educational Attainment, Australia, Cat. No. 6235.0
(February 1980 and February 1994).
For measurement purposes,
spending at restaurants is divided between a food component
and a service component which appears in Chart
9 under 'services excluding recreation and entertainment'.
Australian Chamber of
Manufactures, Customer feedback on Victoria's competitive
electricity market, 1996.
If the value added by
a firm is low and if the tariffs on the firm's input
costs are low relative to the nominal rate of tariff
on its output, the effective rate of tariff assistance
can be much higher than the nominal rate.
Oster A. and Antioch
L., 'Measuring Productivity in the Australian Banking
Sector' in RBA Conference Volume, Productivity and
Growth, 1995.
Pilat D., Labour Productivity
Levels in OECD Countries: Estimates for Manufacturing
and Selected Service Sectors, OECD Working Paper No.
169, 1996.
Bureau of Industry
Economics, International Benchmarking - Overview, Report
95/20.
IMF, World Economic
Outlook, October 1996.
Unit cost is the cost
of producing one unit of output. For given input prices,
unit costs decline as total factor productivity increases.
These projections incorporate the parameter assumptions which underlie the Commonwealth Budget forward estimates and information provided by the States for the 1997 National Fiscal Outlook.
Analysis of the broader measure of public sector financial assets and liabilities is hampered by data limitations. The general government data used in Chart 7 are in some cases unpublished estimates. From 1996-97, all jurisdictions are obliged under the uniform presentation agreement to publish full format financial assets and liabilities statements, including information on non-debt financial assets and liabilities.
The combined State/Territory general government position is significantly influenced by Queensland which has a large excess of total financial assets over liabilities.
Transfer payments by the Commonwealth - for example, income support - are not included in public final demand.
A full set of financial
assets and liabilities data, in the format required
by the uniform presentation framework, will be published
as a supplement to the Statement of Commonwealth Financial
Transactions and will also be incorporated in the ABS
publication, Public Sector Financial Assets and Liabilities,
Australia, scheduled for release in November 1997.