National accounts (income, saving, assets, and liabilities): June 2023 Data Collection

1. Introduction National accounts (income, saving, assets, and liabilities) for New Zealand have been produced from the June 2016 quarter and are updated each quarter. 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]. 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 following series: Final Consumption Expenditure - Changes to the central government sector after incorporating updated input data for intermediate consumption and social assistance benefits in kind. - Changes to the local government sector after incorporating updated Quarterly Local Authority Survey (QLAS) data. - Changes to the household sector after incorporating updated input data, including updated international trade data on visitor spending and NZ resident spending overseas. Inventories - changes due to the process designed to minimise inconsistencies in timing and valuation. Gross fixed capital formation – changes due to correcting a processing error and incorporating updated input data. Data updates to GFKF can flow through to taxes on production and imports. Imports and exports of goods and services changes due to updated international trade data. See Gross domestic product: June 2023 quarter – changes and data updates – 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 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 last 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 Other source data updates Other source data updates caused minor changes to: Gross operating surplus and gross mixed income for the non-financial and financial business enterprises sectors and entrepreneurial income for the household sector – updated data from the Business Financial Data collection, the Agricultural Production Survey (APS) and updated Financial Intermediation Services Indirectly Measured (FISIM) data. Compensation of employees for the household sector - updated data from the Business Financial Data. Subsidies – updated Crown Financial Information System (CFIS) data. 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 June 2023 quarter and retained the previous outliers applied from March 2020 quarter onwards. This has the effect of subduing the impact of unusual data points on the seasonal adjustment process. 2.2.2 Dividends review We are continuing a review of the methods and data that underly the experimental dividends paid and received series in the income and outlay account. The review is looking to confirm the quality of the data that underlies these transactions as well as looking at potential conceptual and method 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) are instead treated as withdrawals of equity. We are reviewing our methods to confirm that we are appropriately identifying super-dividends, with a focus on quarters that immediately precede the personal tax rate change to 39 percent on 1 April 2021. This review may result in changes to these series. Any change to dividends will also have flow on impacts to subsequent items in the accounts, including saving. Interest flows now include a FISIM portion as part of the indicator. 2.2.3 New transaction added to the Rest of world, Income and outlay account Other current taxes payable has been added as a new transaction line in the income and outlay account, rest of world sector. This has been added following improvements to the Balance of payments and international investment position release. Other current taxes payable by the rest of the world sector will now include the International Visitor Conservation and Tourism Levy which is charged to most international visitors to New Zealand. This new series includes data back to the September 2019 quarter. The new transaction identifiers for the quarterly series are: Actuals: SNEQ.SG04AD059P00S600 Seasonally adjusted: SNEQ.SG04SD059P00S600 Note: This series is not seasonally adjusted as we don’t have enough quarters of data to determine if there is a seasonal pattern. The seasonality of this series will be reviewed in coming years. 2.2.4 Changes to insurance indicators Several changes have been made to insurance methodologies from the March 2023 quarter onwards. This follows the Reserve Bank of New Zealand (RBNZ) pausing the supply of some input data series while they update their insurance reporting templates for the NZ IFRS 17 change in financial accounting standards. See Insurance data upgrade. The following items have been impacted: Non-life insurance claims – a RBNZ movement indicator has been replaced in recent quarters with movements in claims estimates from the Insurance Council of New Zealand (ICNZ). Earnings attributable to insurance policyholders – a RBNZ movement indicator has been appended with internal interest and dividend estimates for the insurance sector, derived from the interest matrix and dividends withholding tax data commonly used for other sectors. Non-life Insurance technical reserves (unearned premiums plus outstanding claims liability) – data previously used from the RBNZ has been appended with movements in claims estimates from the ICNZ. When the supply of insurance data from the RBNZ has resumed these methods will be reviewed. 3. Changes to previously published statistics 3.1 Changes to Income and Outlay statistics 3.1.1 Changes to household saving Changes to household saving came from our standard data updates to input data including the Balance of Payments and Business Financial Data collection. Final consumption expenditure, compensation of employees, entrepreneurial income, dividends, and investment income from the rest of the world were the main contributors to the changes in household saving. The following table shows the previously published and updated quarterly household saving from the June 2016 – March 2023 quarters. Household saving in current prices, actual values (not seasonally adjusted), ($million) Quarter Published July 2023 Published October 2023 Change in value Jun-16 -384 -384 0 Sep-16 -585 -585 0 Dec-16 -1,205 -1,205 0 Mar-17 1,541 1,542 1 Jun-17 -1,173 -1,173 0 Sep-17 -587 -586 1 Dec-17 -666 -668 -2 Mar-18 1,609 1,608 -1 Jun-18 -221 -226 -5 Sep-18 230 222 -8 Dec-18 -990 -1,006 -16 Mar-19 1,587 1,615 28 Jun-19 534 542 8 Sep-19 740 739 -1 Dec-19 295 320 25 Mar-20 3,362 3,345 -17 Jun-20 6.968 6,984 16 Sep-20 3,131 3,169 38 Dec-20 1,616 1,604 -12 Mar-21 6,088 6,057 -31 Jun-21 -27 31 58 Sep-21 4,057 4,115 58 Dec-21 830 808 -22 Mar-22 1,955 1,933 -22 Jun-22 1,030 871 -159 Sep-22 1,300 1,087 -213 Dec-22 -149 -569 -420 Mar-23 2,781 2,972 191 3.2. Changes to Balance Sheet statistics The main updates are seen in land (refer to section 2.1.3), and equity and investment fund shares, and in turn change net worth across different sectors. More details on the changes by sector are as follows. Non-financial business enterprises Land as described above has been updated for the March 2023 quarter, up $4.4 billion. This sector includes residential rental properties owned by households. The non-financial business enterprise sector is the balancing sector for financial derivatives. Assets are down $1.9 billion due to updates from sector 2 financial business enterprises, both on the assets and liabilities sides. Equity and investment fund share liabilities are impacted by changes to other instruments in the non-financial business enterprises sector. Financial business enterprises Equity and investment fund shares, both assets and liabilities have been updated for the March 2023 quarter due to updates from the Managed Funds Survey (MFS). Households Land as described above has been updated and impacts on most quarters. Household equity and investment fund share assets have been updated for most quarters as this sector is the balancing sector for this instrument. Changes to other sectors’ equity and investment fund shares impact on the household sector, and in turn also change the net worth estimates. Rest of the world (RoW) 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. There are updated values across several classes for assets and liabilities for the March 2023 quarter. These changes are mainly from survey respondents re-stating their previous reported estimates. There were no methodology related changes in the quarter. 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 counterparty dimension of BOP and IIP data. en-NZ