National accounts (income, saving, assets, and liabilities): December 2022 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. - 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 and international trade data updates Inventories – changes due to the process designed to minimise inconsistencies in timing and valuation, and updates from international trade data Gross fixed capital formation – changes due to incorporating updated input data, updated quarterly building statistics (QBAS) data, international trade data updates, and a correction to how defence force aircraft are recorded Imports and exports of goods and services – data updates to exports due to incorporating updated international trade data See Gross domestic product: December 2022 quarter – changes and data updates –DataInfo+ for further information. See International trade: December 2022 quarter for more information on the international trade data updates Impacts of recent data updates on balance of payments, quarterly GDP, and income, saving, assets and liabilities statistics provides a preview of the effect of recent data updates on key macro-economic statistics. 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 typically affects the most recent previously published quarter. BOP made changes/updates to reinvested earnings paid and received in September quarter due to updated data availability. Interest, dividends, property income and other investment income to the rest of the world updated in the September quarter. The following series had notable updates to series going back further than the most recent quarter due to the incorporation of the international trade data updates. See link above. The most notable event this quarter is the change to the balance on external goods and services due to BOP updates. These are very significant and cause long term changes to actual and especially seasonally adjusted numbers back to June 2018. Exports actuals - updates ranging from March 2020 onwards due to corrections OMT (Overseas Merchandise Trade) made in December. Imports actuals - updates ranging from September 2020 onwards for same reason as exports update. 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: Non-life insurance premiums and claims updated in the September 2022 quarter. Households’ actual pensions contributions updated back to September 2021 Interest has updated from the June 2022 quarter Consumption of fixed capital from the gross fixed capital formation data updates 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 December 2022 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. As a result, the seasonally adjusted results since the beginning of the COVID-19 pandemic have largely reflected the level of economic activity relative to the usual seasonality prior to the pandemic. The irregular impacts of COVID-19 largely finished in the June 2022 quarter. We have carried out testing and determined that we should stop applying additive outliers for the income approach to GDP in the September 2022 quarter, allowing data points from September 2022 onwards to contribute to the seasonal adjustment process. For some component series we have continued to apply additive outliers in the September and December 2022 quarters. We expect to undertake further review of the seasonal adjustment and additive outlier settings before future releases, particularly for the June 2023 quarter release when we will have a full year of data available following the end of COVID border restrictions. At this stage, there are a small number of data points from September 2022 onwards that are contributing to the seasonal adjustment. These points are quite influential in the decomposition into trend, seasonal and irregular components. As additional data points are added in future quarters, we expect greater than usual changes to seasonal factors. This will result in further updates to the seasonally adjusted growth rates from prior to COVID-19 through to the latest quarters. Over time the estimation of trend and seasonality will stabilise as post-COVID patterns become more established. 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. 2.2.3 GST method update We have improved the method of how GST is calculated in the consolidated accounts. The quarterly indicator now better reflects expenditure on items which incur GST. This has resulted in updates to the entire time series of taxes on production and imports receivable. 3 Changes to previously published statistics 3.1 Changes to Income and Outlay statistics 3.1.1 Changes to household saving Household consumption expenditure (HCE) was the main contributor to the changes in household saving. This is due to the corrected travel debits that flowed into HCE travel debits (the modelled value representing the spend of New Zealand residents travelling outside of New Zealand) for the quarters from September 2020 to September 2022 inclusive. Omitted from the calculations of total travel debits were travellers who had selected ‘visiting friends/relatives’, ‘holiday/vacation’, or ‘conference/convention’ as the purpose of their travel on their arrival card when entering New Zealand. Entrepreneurial income was also impacted by the travel debits corrections. The impact of the updates to HCE along with entrepreneurial income had a downward impact on household saving, with the largest impacts in the June and September 2022 quarters. In the March 2022 quarter, there was an upward change to household saving driven by dividends received. In the June and September 2022 quarters, the downward impact on household saving from HCE and entrepreneurial income were partially offset by other data updates. Upwards changes to gross operating surplus and interest receivable occurred in both quarters, with compensation of employees and non-life insurance claims receivable contributing to changes in the September 2022 quarter only. Downwards changes to interest payable also pushed household saving up. The following table shows the previously published and updated quarterly household saving from the June 2016 – December 2022 quarters. Household saving ($million) in current prices, actual values (not seasonally adjusted) Quarter Published January 2023 Published April 2023 Jun-16 -414 -414 Sep-16 -578 -578 Dec-16 -1,183 -1,183 Mar-17 1,542 1,543 Jun-17 -1,115 -1,115 Sep-17 -590 -591 Dec-17 -671 -671 Mar-18 1,558 1,558 Jun-18 -213 -213 Sep-18 250 249 Dec-18 -980 -981 Mar-19 1,548 1,550 Jun-19 566 566 Sep-19 717 717 Dec-19 271 271 Mar-20 3,377 3,376 Jun-20 7,114 7,115 Sep-20 3,193 3,173 Dec-20 1,542 1,530 Mar-21 5,990 5,984 Jun-21 -58 -122 Sep-21 3,966 3,892 Dec-21 951 917 Mar-22 2,070 2,097 Jun-22 1,427 1,268 Sep-22 1,924 1,735 Dec-22 419 3.1.2 Changes to the Rest of the World Sector Updates to the Balance of Payments (see above) have caused changes to the income and outlay account for the Rest of the World sector. The changes are particularly significant for the Balance on External Goods and Services back to the March 2020 quarter (seasonally adjusted). This has led to upwards changes to Total Income Receivable and Saving. 3.2. Changes to Balance Sheet statistics The main updates are seen in land, equity and investment fund shares and accounts payable, 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 December 2022 quarter, up $4.5 billion. This sector includes residential rental properties owned by households. Land as described above has been updated for the December 2022 quarter, up $4.5 billion. This sector includes residential rental properties owned by households. Central government institutions The data changes to financial liabilities for the past couple of quarters relate to updates to the unfunded pension obligations of the sector. There is also a change to account payable for last quarter which adjusts over-estimated value at the time of last publication. Households Land as described above has been updated for the December 2022 quarter, up $10.5 billion. This includes the owner-occupiers of residential property. 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 September 2022 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 the counterparty dimension of BOP and IIP data. en-NZ