National accounts (income, saving, assets, and liabilities): September 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: September 2024 quarter on 19 December 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. 1.1 Incorporating data from the annual national accounts Each year, we make regular updates to the most recent data in the annual national accounts. These updates generally reflect more accurate data becoming available from the underlying data sources, such as the low-level financial data that becomes available with the annual enterprise survey update. The annual national accounts are released in November each year and present a comprehensive view of the economy that draws together data from more detailed but less timely sources. We incorporate these updates in the September quarter. The availability of more detailed data allows us to understand the level of activity that has occurred over the period and reflect these in our estimates of quarterly and annual economic growth. Reconciling quarterly measures to annual values is a process called benchmarking. This process largely preserves the pattern of quarter-on-quarter movements drawn from the quarterly indicator series but scales the series to match the level of the annual benchmark. National accounts (industry production and investment): Year ended March 2023 provides annual benchmarks for consolidated accounts up to the year ended March 2023. This annual benchmarking process causes data updates to final consumption expenditure (FCE), compensation of employees, gross operating surplus and gross mixed income, taxes on production and imports, and subsidies. National accounts (income and expenditure): Year ended March 2024 provides benchmarks for most domestic sectors in the institutional sector accounts up to and including the year ended March 2023. The central government sector is benchmarked up to and including the year ended March 2024. Annual balance sheets: 2023 (provisional) provides the annual balance sheet benchmarks for all institutional sectors up to March 2023. This annual benchmarking process causes revisions to most institutional sectors and to numerous instruments within the balance sheets. As a result of these revisions the balancing of financial assets and liabilities has also been revised causing final revisions to equity. 2024 preview of national accounts improvements has more information on the range of revisions to annual national accounts statistics. 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 Gross domestic product: September 2024 quarter – changes and data updates for further information. 2.1.2 Updates from Business Financial Data (BFD) Updates to BFD are due to updated information and methods. Series affected by updates to BFD include: Compensation of employees Gross operation surplus Gross mixed income Entrepreneurial income Entrepreneurial withdrawals. 2.1.3 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 and premiums Miscellaneous current transfers Debt securities, with flow on impacts to equity. 2.1.4 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. 2.2.4 Updates to interest paid and received of the banking sector During this year’s annual cycle, we corrected an issue with our method for balance date adjustments in commercial banking. This correction has flowed through to this release with the incorporation of annual data, leading to changes in the timing of interest payments and receipts from June 2019 onwards. We have confronted the updated series against data from the RBNZ and these now show closer alignment. For more details, see National Accounts (Income and Expenditure): Year ended March 2024 Data Collection - Stats NZ DataInfo+. 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–June 2024 quarters. Table 1. Household saving ($million) in current prices, actual values (not seasonally adjusted) Quarter Published October 2024 Published January 2025 Change in value Jun-16 -831 -828 3 Sep-16 -1,131 -1,135 -4 Dec-16 -1,745 -1,755 -10 Mar-17 998 996 -2 Jun-17 -1,735 -1,738 -3 Sep-17 -1,261 -1,269 -8 Dec-17 -1,275 -1,269 6 Mar-18 997 991 -6 Jun-18 -896 -907 -11 Sep-18 -734 -737 -3 Dec-18 -1,369 -1,365 4 Mar-19 825 823 -2 Jun-19 -206 -203 3 Sep-19 3 15 12 Dec-19 -291 -282 9 Mar-20 3,094 3,056 -38 Jun-20 6,515 6,480 -35 Sep-20 2,875 2,833 -42 Dec-20 1,873 1,808 -65 Mar-21 3,851 3,977 126 Jun-21 -210 -54 156 Sep-21 3,719 3,767 48 Dec-21 480 496 16 Mar-22 1,145 900 -245 Jun-22 -334 -1,127 -793 Sep-22 -433 -1,331 -898 Dec-22 -2,353 -3,786 -1,433 Mar-23 1,242 -232 -1,474 Jun-23 42 -1,407 -1,449 Sep-23 -260 -1,318 -1,058 Dec-23 -2,119 -2,976 -857 Mar-24 2,492 2,026 -466 Jun-24 -437 -1,236 -799 3.2. Changes to Balance Sheet statistics 3.2.1 Changes to household net worth As noted in the updates to land section, updates to non-financial assets (land and buildings) result in changes to land and equity asset balance sheet estimates for households. This is because the household sector is the balancing sector for equity assets. Changes in adjustments for Cyclone Gabrielle and Auckland Anniversary floods also impacts on quarters from June 2023 for the household sector. Changes in earlier quarters flow from updated debt securities data from the International Investment Position, which ultimately flow to household equity assets. The following table shows the previously published and updated quarterly household net worth for the June 2016–June 2024 quarters. Table 2. Household net worth ($million) in current prices, actual values (not seasonally adjusted) Quarter Published October 2024 Published January 2025 Change in value Jun-16 1,444,915 1,445,844 929 Sep-16 1,499,800 1,500,455 655 Dec-16 1,524,306 1,526,000 1,694 Mar-17 1,534,086 1,535,327 1,241 Jun-17 1,571,431 1,572,447 1,016 Sep-17 1,603,376 1,604,037 661 Dec-17 1,637,129 1,637,046 -83 Mar-18 1,652,297 1,652,095 -202 Jun-18 1,659,271 1,657,201 -2,070 Sep-18 1,695,388 1,692,918 -2,470 Dec-18 1,705,535 1,702,747 -2,788 Mar-19 1,727,687 1,725,152 -2,535 Jun-19 1,719,206 1,716,170 -3,036 Sep-19 1,746,164 1,742,790 -3,374 Dec-19 1,782,561 1,779,114 -3,447 Mar-20 1,806,942 1,804,361 -2,581 Jun-20 1,829,305 1,827,682 -1,623 Sep-20 1,899,231 1,898,791 -440 Dec-20 2,017,191 2,016,849 -342 Mar-21 2,139,547 2,138,512 -1,035 Jun-21 2,237,608 2,230,425 -7,183 Sep-21 2,364,313 2,353,363 -10,950 Dec-21 2,489,106 2,478,176 -10,930 Mar-22 2,471,455 2,473,077 1,622 Jun-22 2,396,289 2,417,027 20,738 Sep-22 2,353,138 2,398,668 45,530 Dec-22 2,337,861 2,407,376 69,515 Mar-23 2,310,040 2,403,491 93,451 Jun-23 2,287,621 2,390,502 102,881 Sep-23 2,315,315 2,423,012 107,697 Dec-23 2,336,493 2,444,366 107,873 Mar-24 2,358,508 2,464,182 105,674 Jun-24 2,311,385 2,440,217 128,832 en-NZ