National accounts (income, saving, assets, and liabilities): March 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: March 2024 quarter on 20 June 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 2.1 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. In this release there are data updates flowing through from GDP to the series used in consolidated accounts and institutional sector accounts. See National Accounts- Quarterlies March 2024 Data Collection - Stats NZ DataInfo+ 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 several years. These cause updates in June quarter releases of National accounts (income, saving, assets, and liabilities). All accounts can be updated for 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. 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. 2.1.4 Updates to income tax paid We have corrected an error in the measurement of income tax paid by households and non-financial businesses. Resident withholding tax on interest was not being apportioned between these two sectors correctly from the June 2023 quarter onwards. This correction has boosted the level of household sector income tax paid and lowered the level of income tax paid by non-financial businesses throughout this time period, with flow on impact to income and outlay account aggregates such as saving. 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 the majority of 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. 2.2.2 Income tax review We have reviewed and updated the additive outlier settings for central government income tax received, household sector income tax paid, and income tax paid by non-financial businesses. This has led to revisions to the seasonally adjusted estimates for these series throughout the time series, with flow on impact to income and outlay account aggregates such as saving. We have also updated our approach to measuring central government income tax paid which has resulted in revisions to both the actual and seasonally adjusted series from the June 2021 quarter onwards. 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. 2.2.4 Insurance methodology changes The main data source for insurance on a quarterly basis is the insurance statistics collected by RBNZ as part of its monitoring of financial risks. However, the use of the RBNZ’s quarterly insurance statistics has been put on hold at present as the RBNZ is transitioning into the use of new templates for collecting the data based on the New Zealand Standard, NZ IFRS 17. This came into effect for insurers from the start of the financial year, commencing on or after 1 January 2023. For the transition period (until the data is seen to be of an acceptable level for publication) we are using quarterly movements based on the Insurance Council of New Zealand (ICNZ) insurance claims. We have adjusted the June, September, and December 2023 quarter’s insurance claim indicators, to exclude claims relating to the Auckland Anniversary floods and Cyclone Gabrielle. For further detail on insurance methods see National accounts (income, saving, assets, and liabilities): Sources and methods (fourth edition). 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, dividends receivable, interest, income tax paid 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–December 2023 quarters. Table 1. Household saving ($million) in current prices, actual values (not seasonally adjusted) Quarter Published April 2024 Published July 2024 Change in value Jun-16 -832 -832 0 Sep-16 -1,133 -1,133 0 Dec-16 -1,744 -1,744 0 Mar-17 1,000 1,000 0 Jun-17 -1,733 -1,736 -3 Sep-17 -1,254 -1,260 -6 Dec-17 -1,272 -1,275 -3 Mar-18 986 997 11 Jun-18 -911 -896 15 Sep-18 -747 -734 13 Dec-18 -1,379 -1,369 10 Mar-19 861 824 -37 Jun-19 -140 -205 -65 Sep-19 74 1 -73 Dec-19 -282 -289 -7 Mar-20 2,949 3,094 145 Jun-20 6,281 6,516 235 Sep-20 2,237 2,877 640 Dec-20 966 1,871 905 Mar-21 5,621 3,842 -1,779 Jun-21 -516 -204 312 Sep-21 3,717 3,859 142 Dec-21 680 616 -64 Mar-22 1,669 1,278 -391 Jun-22 6 -90 -96 Sep-22 -7 -74 -67 Dec-22 -1,821 -1,972 -151 Mar-23 1,080 913 -167 Jun-23 651 -58 -709 Sep-23 947 139 -808 Dec-23 -748 -1,561 -813 3.2. Changes to Balance Sheet statistics 3.2.1 Changes to household net worth As noted in the updates to land section, updates to non-financial assets (land and buildings) result in changes to land and equity asset balance sheet estimates for households. This is because the household sector is the balancing sector for equity assets. Changes in adjustments for Cyclone Gabrielle and Auckland Anniversary floods also impacts on quarters from June 2023 for the household sector. The following table shows the previously published and updated quarterly household net worth for the June 2016–December 2024 quarters. Table 2. Household net worth ($million) in current prices, actual values (not seasonally adjusted) Quarter Published April 2024 Published July 2024 Change in value Jun-16 1,444,487 1,444,487 0 Sep-16 1,498,658 1,498,658 0 Dec-16 1,524,639 1,524,639 0 Mar-17 1,534,086 1,534,086 0 Jun-17 1,571,529 1,571,529 0 Sep-17 1,603,719 1,603,719 0 Dec-17 1,637,303 1,637,303 0 Mar-18 1,652,297 1,652,297 0 Jun-18 1,660,154 1,660,154 0 Sep-18 1,695,477 1,695,477 0 Dec-18 1,705,404 1,705,404 0 Mar-19 1,727,687 1,727,687 0 Jun-19 1,719,119 1,719,119 0 Sep-19 1,745,521 1,745,521 0 Dec-19 1,782,575 1,782,576 1 Mar-20 1,806,942 1,806,942 0 Jun-20 1,828,214 1,828,214 0 Sep-20 1,898,638 1,898,637 -1 Dec-20 2,016,764 2,016,762 -2 Mar-21 2,139,547 2,139,547 0 Jun-21 2,237,015 2,237,093 78 Sep-21 2,363,486 2,363,652 166 Dec-21 2,488,469 2,488,719 250 Mar-22 2,471,307 2,471,638 331 Jun-22 2,395,296 2,395,766 470 Sep-22 2,352,112 2,352,694 582 Dec-22 2,339,147 2,339,874 727 Mar-23 2,308,751 2,308,986 235 Jun-23 2,287,646 2,287,215 -431 Sep-23 2,313,760 2,313,471 -289 Dec-23 2,323,744 2,334,244 10,500 1. Figures are calculated from unrounded values. en-NZ