National accounts (income, saving, assets, and liabilities): June 2024 quarter Data Collection

1. Introduction National accounts (income, saving, assets, and liabilities) for New Zealand was published for the first time in June 2021; the data is updated each quarter, and timeseries are available from June 2016 quarter onwards. The series in these accounts are in current (nominal) price, in both actual and seasonally adjusted terms. The National accounts (income, saving, assets, and liabilities): Sources and methods are thoroughly documented. The data used to compile our estimates of quarterly income, saving, assets, and liabilities are the best that we have available at that point in time. When compiling our quarterly estimates, we usually face trade-offs between timeliness and the quality, coverage, length of historical series, and conceptual alignment of available data sources. As a result, the methodologies vary depending on the data available and are underpinned by certain assumptions. These statistics are experimental and may be subject to greater change than other releases as we improve methodology or include more comprehensive data. Part of the rationale for releasing estimates on an experimental basis is to allow users an opportunity to comment on methods and details of published series. If you have any feedback or comments that you’d like to pass on, or for more information on changes, email [email protected] The quarterly income measure of gross domestic product (GDPI), along with total economy compensation of employees, gross operating surplus and gross mixed income, taxes on production and imports, and subsidies became official in the December 2023 quarter and were most recently published in Gross domestic product: June 2024 quarter on 19 September 2024. Income by institutional sector and saving, assets and liabilities measures will remain experimental and continue to be published shortly after the quarterly GDP release. 2. Data Collection and Methodology changes Source data updates 2.1.1 Updates from Gross Domestic Product (GDP) series GDP estimates are reflected in National accounts (income, saving, assets, and liabilities) where the same series are used in both publications. Data updates flow through from GDP to the following series used in the consolidated accounts and institutional sector accounts: Final Consumption Expenditure - Changes to household sector final consumption expenditure are largely due to improvements in the measurement of exports of travel services (visitor spending) introduced in the June quarter International trade release. See International trade June 2024 quarter data sources and methods. These updates particularly impact the March 2024 quarter and are the main driver of the upward revision to household saving in that quarter. The impact is also seen in the external balance of goods and services for the Rest of world sector. - Changes to local government sector due to updated indicator data, largely affecting March 2022 quarters onwards. - Changes to local government sector due to updated Quarterly Local Authority Survey data, largely affecting March 2022 quarters onwards. Change in inventories - Changes due to the process designed to minimise inconsistencies in timing and valuation. Gross fixed capital formation - Non-financial business sector changes largely due to updated Quarterly Building Activity Survey data. See Value of building work put in place: June 2024 quarter. These updates affect the December 2022 quarter onwards. - Central government sector changes due to the correction of a processing error relating to aircraft purchases affecting the December 2022 and March 2023 quarters. Compensation of employees - Changes due to updates to Business Financial Data (BFD). Gross operating surplus, gross mixed income, entrepreneurial income, and entrepreneurial withdrawals - Changes due to updates to Business Financial Data (BFD) and other data sources. See Gross domestic product: June 2024 quarter – changes and data updates for further information. 2.1.2 Updates from Balance of Payments (BOP) and International Investment Position (IIP) The Rest of World sector is subject to updates in all accounts each quarter due to BOP and IIP updates. These changes are due mainly to respondents updating their previously reported data, which affects the most recent previously published quarter. In addition, changes to methods used in compiling BOP and IIP are introduced once each year, in the June quarter BOP and IIP release. These can affect quarterly data over several years, and result in updates in the June quarter releases of National accounts (income, saving, assets, and liabilities). All accounts can be updated according to changes in the Rest of World sector, and updates to the Rest of World sector may result in changes to resident sectors that are estimated from the counterparty dimension of BOP and IIP data. Series affected by updates from Balance of Payments include all series in the Rest of World sector, and include the following series for other sectors: Interest Dividends Reinvested earnings on direct investment Investment income payable to and receivable from the rest of the world Non-life insurance claims Miscellaneous current transfers Debt securities, with flow on impacts to equity. See 2024 Balance of payments and national accounts: data sources and methods for further information. 2.1.3 Updates to land Quarterly estimates of non-produced non-financial assets (land) are derived by using annual land estimates from CoreLogic property values by property type, quarterly CoreLogic residential property estimates for recent quarters, and movements in the CoreLogic House Price Index (HPI) in latest quarters when residential property estimates are not yet available. The HPI estimates for the most recent two quarters are updated as CoreLogic collects more data on housing and land transactions. Thus, given the total value of housing and land in New Zealand (over one trillion dollars), it is expected that updated HPI values may contribute to substantial changes in some sectors. This is particularly the case for the non-financial business enterprises sector (which contains most of the residential property operators) and the household sector. In quarters after the latest annual balance sheet benchmarks, property values are used as a control total for each sector, then estimates for non-financial assets such as buildings and land improvements are deducted, to derive land estimates as a residual. 2.2 Methodology changes 2.2.1 Seasonal adjustment outlier treatment Sharp changes in activity, such as those caused by the COVID-19 lockdown, pose challenges for our usual seasonal adjustment process. We have continued our use of additive outliers to treat unusual data points for September 2022 quarter, and retained the previous outliers applied from the March 2020 quarter onwards. This has the effect of subduing the impact of unusual data points in the seasonal adjustment process. The irregular impacts of COVID-19 largely finished in the June 2022 quarter and for many affected series we have stopped applying additive outlier treatment from the September 2022 quarter onwards. As activity returns to more stable patterns – although perhaps different from pre-COVID patterns – there will be a period of greater than usual uncertainty around seasonal adjustment factors, especially for series heavily affected by COVID restrictions. We will continue to monitor time series for unusual data points and apply additive outlier treatment as needed. 2.2.3 Dividends review We are continuing a review of the methods and data that underlie the experimental dividends paid and received series in the income and outlay account. The review is endeavouring to confirm the quality of the data that underlies these transactions as well as considering potential conceptual and methodology improvements, including the treatment of super-dividends. Super-dividends are dividends that are disproportionately large relative to the recent level of a company's dividends and earnings. The System of National Accounts 2008 suggests that these excess dividends (super-dividends) should instead be treated as withdrawals of equity. Rather than reflecting current income, they relate to earnings retained in prior periods. Our source data for dividends paid has shown large spikes in the March 2021 quarter and again in the March 2024 quarter. These spikes immediately precede the personal tax rate change to 39 percent on 1 April 2021 and the trust tax rate change to 39 percent on 1 April 2024. Whilst some aspects of the review are ongoing, in the March 2024 quarter release we have implemented a new approach for dealing with exceptional super-dividends. Our usual source data is significantly distorted by the withdrawals of equity that we conceptually do not want to include. Instead, we impute dividend payments in relevant sectors using the typical relationship between dividends paid and primary income receivable. This treatment has only been applied to the exceptional March 2021 and March 2024 quarters. It has changed the distribution of dividends between quarters in our quarterly indicator data, which has led to revisions throughout the time series but particularly from the June 2020 quarter onwards. It impacts dividends paid by non-financial and financial businesses, and dividends received across many sectors. These updates to dividends have flow on impacts to subsequent items in the accounts, including saving. Further data updates are expected in the September 2024 quarter release, when we will introduce updated annual benchmarks. Prior to this we will be reviewing the treatment of super-dividends in our annual statistics and intend to provide further guidance about this in our annual preview of national accounts improvements paper to be released in November. 3 Changes to previously published statistics 3.1 Changes to Income and Outlay statistics 3.1.1 Changes to household saving Changes to household consumption expenditure, compensation of employees, entrepreneurial income, dividends receivable, investment income from the rest of the world and miscellaneous current transfers have had a flow on impact to household saving due to implementing updated quarterly indicator data and methodologies in the quarterly GDP and Balance of Payments. The following table shows the previously published and updated quarterly household saving from the June 2016–March 2024 quarters. Table 1. Household saving ($million) in current prices, actual values (not seasonally adjusted) Quarter Published July 2024 Published October 2024 Change in value Jun-16 -832 -831 1 Sep-16 -1,133 -1,131 2 Dec-16 -1,744 -1,745 -1 Mar-17 1,000 998 -2 Jun-17 -1,736 -1,735 1 Sep-17 -1,260 -1,261 -1 Dec-17 -1,275 -1,275 0 Mar-18 997 997 0 Jun-18 -896 -896 0 Sep-18 -734 -734 0 Dec-18 -1,369 -1,369 0 Mar-19 824 825 1 Jun-19 -205 -206 -1 Sep-19 1 3 2 Dec-19 -289 -291 -2 Mar-20 3,094 3,094 0 Jun-20 6,516 6,515 -1 Sep-20 2,877 2,875 -2 Dec-20 1,871 1,873 2 Mar-21 3,842 3,851 9 Jun-21 -204 -210 -6 Sep-21 3,859 3,719 -140 Dec-21 616 480 -136 Mar-22 1,278 1,145 -133 Jun-22 -90 -334 -244 Sep-22 -74 -433 -359 Dec-22 -1,972 -2,353 -381 Mar-23 913 1,242 329 Jun-23 -58 42 100 Sep-23 139 -260 -399 Dec-23 -1,561 -2,119 -558 Mar-24 1,463 2,492 1,029 3.2. Changes to Balance Sheet statistics 3.2.1 Changes to household net worth As noted in the updates to land section, updates to non-financial assets (land and buildings) result in changes to land and equity asset balance sheet estimates for households. This is because the household sector is the balancing sector for equity assets. Changes in adjustments for Cyclone Gabrielle and Auckland Anniversary floods also impacts on quarters from June 2023 for the household sector. Changes in earlier quarters flow from updated debt securities data from the International Investment Position, which ultimately flow to household equity assets. The following table shows the previously published and updated quarterly household net worth for the June 2016–March 2024 quarters. Table 2. Household net worth ($million) in current prices, actual values (not seasonally adjusted) Quarter Published July 2024 Published October 2024 Change in value Jun-16 1,444,487 1,444,915 428 Sep-16 1,498,658 1,499,800 1,142 Dec-16 1,524,639 1,524,306 -333 Mar-17 1,534,086 1,534,086 0 Jun-17 1,571,529 1,571,431 -98 Sep-17 1,603,719 1,603,376 -343 Dec-17 1,637,303 1,637,129 -174 Mar-18 1,652,297 1,652,297 0 Jun-18 1,660,154 1,659,271 -883 Sep-18 1,695,477 1,695,388 -89 Dec-18 1,705,404 1,705,535 131 Mar-19 1,727,687 1,727,687 0 Jun-19 1,719,119 1,719,206 87 Sep-19 1,745,521 1,746,164 643 Dec-19 1,782,576 1,782,561 -15 Mar-20 1,806,942 1,806,942 0 Jun-20 1,828,214 1,829,305 1,091 Sep-20 1,898,637 1,899,231 594 Dec-20 2,016,762 2,017,191 429 Mar-21 2,139,547 2,139,547 0 Jun-21 2,237,093 2,237,608 515 Sep-21 2,363,652 2,364,313 661 Dec-21 2,488,719 2,489,106 387 Mar-22 2,471,638 2,471,455 -183 Jun-22 2,395,766 2,396,289 523 Sep-22 2,352,694 2,353,138 444 Dec-22 2,339,874 2,337,861 -2,013 Mar-23 2,308,986 2,310,040 1,054 Jun-23 2,287,215 2,287,621 406 Sep-23 2,313,471 2,315,315 1,844 Dec-23 2,334,244 2,336,493 2,249 Mar-24 2,342,091 2,358,508 16,417 en-NZ