Australia Yearbook - 2001

974 Year Book Australia 2001
12 Walters R. and Dippelsman R. 1986,
Estimates of Depreciation and Capital Stock,
Australia, ABS, Canberra.
13 Australian Bureau of Statistics 1987,
Australian National Accounts: Estimates of
Capital Stock, 1985–86, ABS, Canberra.
14 Australian Bureau of Statistics 1988,
Australian National Accounts: Gross Product,
Employment and Hours Worked, June Quarter
1988, ABS, Canberra.
15 Australian Bureau of Statistics 1990,
Occasional Paper: Estimates of Multifactor
Productivity, Australia, ABS, Canberra.
16 Australian Bureau of Statistics 1990,
Information Paper: Australian National
Accounts: Flow of Funds Developmental
Estimates, ABS, Canberra.
17 Australian Bureau of Statistics 1993,
Information Paper: Australian National
Accounts: Introduction of Constant Price
Estimates at Average 1989–90 Prices, ABS,
Canberra.
18 Australian Bureau of Statistics 1995,
Occasional Paper: National Balance Sheets for
Australia: Issues and Experimental Estimates,
1989 to 1992, ABS, Canberra.
Measuring GDP
There are three ways of measuring GDP:
the income approach, which measures GDP
by summing the incomes accruing from
production: compensation of employees
(wages and salaries, and employers’ social
contributions); gross operating surplus
(profits); gross mixed income (income from
unincorporated businesses, including a return
to the owners of these businesses for their
labour); and taxes less subsidies on production
and imports;
the expenditure approach, which involves
summing all final expenditures on goods and
services (i.e. those goods and services which are
not processed any further), adding on the
contributions of changes in inventories and the
value of exports, and deducting the value of
imports. Final expenditures consist of final
consumption expenditure and gross fixed
capital formation. Exports are included in GDP
because they are part of Australian production
even though they are sold to overseas
purchasers. Imports are deducted because,
although they are included in final expenditures
(e.g. when someone buys an imported video
recorder its value is included as part of
household final consumption expenditure),
they are not part of Australian production; and
the production approach, which calculates
GDP by taking the value of goods and services
produced by an industry (its output at basic
values, which implicitly includes taxes less
subsidies on production) and deducting the
cost of goods and services used up by the
industry in the productive process
(intermediate consumption), which leaves the
value added by the industry. GDP is then
obtained by summing value added across all
industries, and adding taxes less subsidies on
products.
While each approach should, conceptually,
deliver the same estimate of GDP, if the three
measures are compiled independently using
different data sources then different estimates of
GDP result. However, the Australian national
income, expenditure and product estimates have
been integrated with annual balanced supply and
use tables which are available for 1994–95 to
1997–98. Integration with balanced supply and
use tables ensures that the same estimate of GDP
is obtained from the three approaches, so that
annual estimates using the income, expenditure
and production approaches are identical for the
years for which supply and use tables are
available.
Prior to 1994–95, and for 1998–99, the estimates
using each approach are based on independent
sources, and there are usually differences between
the income, expenditure and production
estimates. Nevertheless, for these periods, a single
estimate of GDP has been compiled.
Table 29.2 shows time series of chain volume
measures for GDP, and GDP per capita, from
1972–73 to 1998–99. (For a discussion of chain
volume measures, see the section Chain volume
or ‘real’ GDP.)