RDP 8704: The Role and Consequences of Investment in Recent Australian Economic Growth Appendix B: Data Sources and Definitions

This appendix contains definitions and sources of data used in this paper, as well as the actual data used. It incorporates all data available in November 1986.

Where possible data have been obtained directly from ABS publications. However, in order to obtain historical series it was sometimes necessary to use other sources and/or derive series using simplifying assumptions.

The sources of all series are listed in Section B.1. The definitions of and assumptions underlying the estimated series, are outlined in Section B.2. All of the series described are contained in Section B.3.

B.1 Sources

Further details of series obtained from sources (a),(b),(c) and (d) are contained in Australian National Accounts: Concepts Sources and Method (Australian Bureau of Statistics, Canberra) Catalogue No. 5216.0.

1. Australian National Accounts, National Income and Expenditure 1984–85 and previous issues (Australian Bureau of Statistics, Canberra) Catalogue No. 5204.0.
2. Quarterly Estimates of National income and Expenditure, Australia June Quarter 1986 (Australian Bureau of Statistics, Canberra) Catalogue No. 5206.0 and Magnetic Tape with historical series available from the ABS.
3. Australian National Accounts Gross Product by Industry 1984–85 (Australian Bureau of Statistics, Canberra) Catalogue No. 5211.0.
4. Historical Series of Estimates of National Income and Expenditure, Australian September Quarter 1959 to June Quarter 1980. Supplement to March Quarter 1986 issue of 5206.0 (Australian Bureau of Statistics, Canberra) Catalogue No. 5207.0.
5. Priavte New Capital Expenditure, Australia June Quarter 1986 Survey and previous issues (Australian Bureau of Statistics, Canberra) Catalogue No. 5626.0.
6. The Labour Force, Australia June 1986 and previous issues (Australian Bureau of Statistics, Canberra) Catalogue No. 6203.0.
7. Civilian Employees Australia, June 1966 to June 1979 (Australian Bureau of Statistics, Canberra) Catalogue No. 6203.0.
8. Employed Wage and Salary Earners, Australia March 1986 previous issues (Australian Bureau of Statistics, Canberra) Catalogue No. 6248.0 and interim ABS data.
9. Lease Finance. Australia, June 1986 (Australian Bureau of Statistics, Canberra) Catalogue No. 5644.0.
10. Finance Companies, Australian December 1985 and previous issues (Australian Bureau of Statistics, Canberra) Catalogue No. 5614.0.
11. Walters E. and Dippelsman R. (1986) “Estimates of Depreciation and Capital Stock Australia” Australian Bureau of Statistics, Occasional Paper No. 1985/3.
12. Norton W.E. and Kennedy P.J. (1985) “Australian Economic Statistics 1949–50 to 1984–85: I Tables” Reserve Bank of Australia Occasional Paper Ho. 8A.
13. Department of the Treasury The Round-up, October 1986 and previous issues (Australian Government Publishing Service, Canberra).
14. Butlin, M.W. (1977) “A Preliminary Annual Database 1900/01 to 1973/74 Reserve Bank of Australia Research Discussion Paper 7701”, May.
15. Confederation of Australian Industry and Westpac Banking Corporation Survey of Industrial Trends Report On Quarterly Survey of Manufacturers in Australia No. 99 June 1986 and previous issues.
16. OECD Department of Economics and Statistics National Accounts Number 2 1986 and previous issues (OECD, Paris).
17. Carmichael J. and Stebbing P.W. (1981) “Some Macroeconomic Effects of the Interaction Between Inflation and Taxation” in A.R. Pagan and P.K. Trivedi (editors) The Effects of Inflation; Theoretical Issues and Australian Evidence Conference Papers, Centre for Economic Policy Research Australian National University, pp 101–136.
18. Dews N. (1986) “Research Report: Tobins q – Some Updated Data” Reserve Bank of Australia Bulletin, June 1986 pp B6–B10.
19. Budget Statements 1985/86 and previous issues. (Australian Government Publishing Service, Canberra).
20. International Monetary Fund, International Financial Statistics, Volume 39, No.8 August 1986 and previous issues (IMF, Washington).
21. Derived within Reserve Bank of Australia.

(B.2) Definitions

Data have been listed in order of use in the paper. All annual series are financial years and constant price series are $ million in 1979/80 prices, unless otherwise stated. Quarterly data have been seasonally adjusted by the ABS unless derived within the Reserve Bank. The later series have been seasonally adjusted using the X11Q seasonally adjustment software package. All constant price data for periods before September 1969 have been scaled from 1974/75 and 1966/67 price series to obtain comparable values.

1. GDP: gross domestic product. That is, the total market value of goods and series produced, after deducting the cost of goods and services used up in the production process but before deducting allowances for the depreciation of fixed capital; used on 4-guarter-ended and annual bases, constant prices. Source (b) 1969/70–1985/86, source (d) 1959/60–1968/69. Source (a) 1949/50–1958/59, source (n) 1900/01–1948/49.
2. Gross Fixed Capital Formation: gross fixed capital expenditure on dwellings, non-dwelling construction, plant and equipment by the private sector, general government and public enterprises. Includes both new and second hand purchases; annual, constant prices. Source (b) 1969/70–1985/86, source (d) 1959/60–1968/69, source (n) 1900/01–1948/49. Source (a) 1949/50–1958/59. Presented as a proportion of series (1) .
3. Gross Fixed Capital Formation – Australia: definition as for series (2) above; annual, calendar years, constant prices. Source (b) 1970–1985, source (d) 1960–1969. Presented as a proportion of
4. Gross Fixed Capital Formation – OECD: definition as for series (2) above; annual, calendar years, constant 1980 prices. Source (p). Presented as a proportion of total OECD GDP also from source (p).
5. Gross Fixed Capital Expenditure – Private Sector: expenditure on dwellings, non-dwelling construction, plant and equipment by the private sector. Includes both new and second hand purchases. Adjusted for major sales of fixed assets between public and private sectors which are leased back to the sector of sale; annual, constant prices. Source (b) 1969/70–1985/86, source (d) 1959/60–1968/69, source (a) 1949/50–1958/59, source (m) for sale/leaseback adjustment. Presented as a proportion of series (1).
6. Gross Fixed Capital Expenditure – Public Sector: definition as for series (5) except expenditure by general government and public trading enterprises. Format, sources and presentation as for series (5).
7. Private Gross Fixed Capital Expenditure – Equipment: expenditure on new and second hand equipment by the private sector. Adjusted for major sales of fixed assets between public and private sectors which are leased back to the sector of sale; annual, constant prices. Source (b) 1969/70–1985/86, source (d) 1959/60–1968/69 source (m) for sale/leaseback adjustment. Presented as an index where 1959/60=100.
8. Private Gross Fixed Capital Expenditure – Non-dwelling Construction: definition as for series (7) except expenditure on non-dwelling construction. Format, sources and presentation as for series (7).
9. Private Gross Fixed Capital Expenditure – Dwellings: expenditure on new and second hand dwellings by the private sector. Format sources and presentation as for series (7).
10. Private Fixed Capital Expenditure – Mining: expenditure on new plant, equipment, buildings and structures undertaken by the private sector in mining industry; annual. Source (e). Presented in current prices as a proportion of series (14), and in constant prices as an index where 1966/67=100. Constant price estimates 1966/67 to 1969/70 from source(s). For this period current price data for equipment and building and construction have been deflated by the implicit price deflators for equipment and non-dwelling construction respectively from source (c) scaled to equal the appropriate Capital Expenditure Survey deflators in September 1969 to derive constant price estimates.
11. Private Fixed Capital Expenditure – Manufacturing: definition as for series (7) except expenditure by manufacturing industry. Source (e). Presented in current prices as a proportion of series (15), and as an index where 1966/67=100. Constant price estimates pre 1969/70 calculated as for series (10).
12. Private Fixed Capital Expenditure – Finance, Property and Business: definition as for series (7) except expenditure by finance, property and business services sectors. Source (e). Presented in current prices as a proportion of series (16) and in constant price as an index where 1966/67=100. Constant price estimates pre 1969/70 calculated as for series (10).
13. Private Fixed Capital Expenditure – All Other: expenditure on new plant, equipment, buildings and structures undertaken by the private sector in all remaining industries. That is, mainly wholesale and retail trade; transport and storage; electricity, gas and water; communication, recreation, entertainment, restaurants, hotels, personal services, agriculture, forestry, fishing and hunting; construction and community services. Also includes purchases of second-hand assets by a industries; annual. Source (u) where (13) = (7)+(8)−[(10)+(ll)+(12)].

    Presented in current prices as a proportion of series (17) and in constant prices as an index where 1966/67=100. Constant price estimates pre 1969/70 calculated as for series (10).

14. Own GDP – Mining: definition as for series (1) except mining industry only; annual, market prices. Source (c).
15. Own GDP – Manufacturing: definition as for series (1) except manufacturing industry only; annual, market prices. Source (c).
16. Own GDP – Finance Property and Business: definition as for series (1) except finance, property and business services sectors only; annual, market prices. Source (c).
17. Own GDP – All Other: definition as for series (1) except all industries not included in series (14), (15) or (16) only. That is, those industries listed for series (13); annual, market prices. Source (u) where (17)=(1)−[(14)+(15)+(16)].
18. Private Fixed Capital Expenditure Adjusted for Leasing – Mining: definition as for series (10) except adjusted for leasing; annual, constant prices, source (c); and for leasing adjustment source (f) 1984/85–1985/86, source (j) 1973/74–1984/85 and source (u) see Appendix C for details of leasing adjustment. Presented as an index where 1966/67=100.
19. Private Fixed Capital Expenditure Adjusted for Leasing -Manufacturing: definition as for series (11) except adjusted for leasing. For details of leasing adjustment see Appendix C. Format, sources and presentation as for series (18).
20. Private Fixed Capital Expenditure Adjusted for Leasing – Finance Property and Business: definition as for series (12) except adjusted for leasing. For details of leasing adjustment see Appendix C. Format, sources and presentation as for series (18).
21. Private Fixed Capital Expenditure Adjusted for Leasing – All Other: definition as for series (13) except adjusted for leasing. For details of leasing adjustment see Appendix C. Format, sources and presentatior as for series (18).
22. Capital Stock: net capital stock owned by the private and public sectors excluding private dwellings where K_t = KP_t + KG_t; used on annual average and 4-quarter-average bases. Source(u)

    In any quarter t,

    
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    d = rate of depreciation. Assumed to remain constant within each year. Depreciation'rate for KP equals that implied for 1983/84 in 1984/85, 1985/86. Depreciation rate for KG equals that implied for 1981/82 from 1982/83 to 1985/86. In all other years, for c, e, p and g:

    
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    where

    D = capital consumption, annual. Source (k).

    K = end year net capital stock, annual. Source (k).

    I = gross fixed capital expenditure, annual. Source (k).

    KP = private sector capital stock excluding inventories; from source (k) in base year 1966/67

    KG = public sector capital stock; from source (k) in base year 1966/67.

    I = investment flow in current period. Source (b).

    c,e,p,g indicate non-dwelling construction, plant and equipment, public enterprises and general government, respectively.

23. Employed Labour Force: labour force employed in the private sector and the public sector excluding defence in efficiency units used on annual average and 4-quarter-average bases, where:

    
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    and

    L_t = total employment (excluding defence), thousands. Source (f)

    δ = rate of technological progress estimated, using a Cobb-Douglas production function, to equal .0028. For further details see Section 3.2 in text and Appendix A table A.1. Source (s).

    t = time trend.

24. Capital/Labour Ratio: ratio of capital stock to employed labour force. That is,

    
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    where:

    K_t = series (22)

    = series (23)

25. Output/Capital Ratio: ratio of GDP defined as series (1) to the end-year capital stock defined as series (22). That is,

    
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    annual, constant prices. Sources as shown for series (1) and series (22).

26. Output/Labour Ratio: ratio of GDP in constant prices as defined in series (1) to the labour force in efficiency units as defined in series (23). That is,

    
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    annual. Sources as shown for series (1) and series (23).

27. Gross Operating Surplus less Tax – Total: the excess of output of enterprises over costs incurred in producing that output before deducting depreciation provisions, dividends, interest, royalties and land rent payments but after deducting income tax payable. Includes the gross operating surplus of companies, financial enterprises, unincorporated enterprises and public enterprises, less income tax payable by these groups; annual, current prices. Source (c). Presented as a proportion of series (1) in current prices.
28. Gross Operating Surplus less tax – Companies and Financial Enterprises: definition as for series (27) except including only companies and financial enterprises, less income tax payable by these institutions; annual, current prices. Source (c). Presented as a proportion of series (1) in current prices.
29. Gross Operating Surplus by Industry – Mining: the excess of output of mining companies and mining unincorporated enterprises over costs incurred in producing that output before deducting depreciation provisions, dividends, interest, royalties, land rent payments and direct taxes payable; annual, current prices. Source (a). Presented as a proportion of series (14).
30. Gross Operating Surplus by Industry – Manufacturing: definition as for series (29) except including manufacturing industry only; annual, current prices. Source (a). Presented as a proportion of series (15).
31. Gross Operating Surplus by Industry – Finance Property and Business: definition as for series (29) except including finance property and business services sectors only; annual, current prices. Source (a). Presented as a proportion of series (16).
32. Gross Operating Surplus by Industry – All Other: definition as for series (29) except including all industries not included in series (29), (30) or (31). That is, those industries listed for series (13); annual, current prices. Source (a). Presented as a proportion of series (17).
33. Heal unit labour cost: ratio of non-farm wages, salaries and supplements and payroll tax, deflated by the implicit price deflator for gross non-farm product, per hour worked by non-farm wage and salary earners to gross non-farm product in constant prices per hour worked by all persons employed in the non-farm sector, annual average. Source (m). Presented as an index where 1966/67 to 1972–73 = 100.
34. Real after tax cost of debt: expost real rate of return on debt for a firm taking into account taxes payable, the rate of inflation and the rate of depreciation of the capital stock, annual average rate. Source (q). That is,

    
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    where:

    
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    and

    i = yield on industrial debentures with five or less years to maturity; weighted average of month ending last Wednesday in third month of quarter. Source (u).

    π = average four-quarter-ended percentage change in the non-farm GDP deflator. Source (c).

    μ = weighted average annual rate of depreciation for the total capital stock. Sources and definitions as for series (22) except

    
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    Assumed to remain constant within each year. From 19S2/83 to 1985/86 depreciation rate assumed to equal that derived for 1981/82. Source (k).

35. Private Sector Employment: Total employment (excluding defence) as defined for series (23) less Government employment; thousands, 4-quarter-average. Source (f) for total employment. For Government employment source (g) 1966/67–1971/72, source (h) 1972/73–1985/86.

    Data from source (h) consists of annual data for the period 1972/73 to 1980/81. To create a quarterly series, we have assumed that employment growth occurs evenly through each year. For 1981/82 and 1982/83 data is quarterly average of monthly data. For the remainder of the period quarterly data is available.

    For details of breaks in series and compatibility of data used see Information Paper on New Statistical Series: Employment, Average Weekly Earnings, Job Vacancies and Overtime, June 1984 (Australian Bureau of Statistics, Canberra) Catalogue Ho. 6256.0.

36. Private Sector GDP: GDP as defined for series (1) except only for the private sector; 4-quarter-ended. Source (u). This series was first constructed on an annual basis using current price data from source (a).

    It was assumed that private sector GDP equals private sector wages, salaries and supplements plus gross operating surplus of companies, unincorporated enterprises, dwellings owned by persons and private financial enterprises less private sector imputed bank service charge plus indirect taxes less subsidies paid by the private sector. The proportion of indirect taxes less subsidies included was the same as the proportion of private wage salaries and supplements plus private gross operating surplus in total wages salaries and supplements plus total gross operating surplus, in each year.

    A 4-quarter-ended series was then obtained by assuming that private sector GDP has a similar quarterly profile to total GDP. That is, the quarterly change in 4-quarter-ended total GDP was scaled by the ratio of the annual change in private GDP to the annual change in total GDP, within each year.

    This series was then deflated by the GDP deflator, from source (b) 1969/70 – 1985/86 and source (a) 1966/67–1968/69, to obtain a 4-quarter-ended constant price series.

37. Private Sector Capital Stock: KP as defined for series (22); 4-quarter-average, constant prices. Source (u).
38. Mining Employment: Private and public sector employment in the mining industry; thousands, 4-quarter-average. Source (f) 1979–1986, source (g) 1966–1979.
39. Mining GDP: Definition as for series (14); 4-quarter-ended, constant prices. Converted to quarterly series using same assumption as applied to series (36).
40. Mining Capital Stock: End-year net stock of mining capital owned by the private sector; 4-quarter-average; constant prices. Source (u), constructed from end June estimates of the mining capital stock from source (k) and quarterly constant price gross new capital expenditure flows from source (e) 1969/70 – 1985/86 and source (u) 1966/67 – 1969/70.

    For the latter period current price data for equipment and building and construction have been deflated by the implicit price deflators for equipment and non-dwelling construction respectively from source (c) scaled to equal the appropriate Capital Expenditure Survey deflators in September 1969 to derive constant price estimates.

    For the period 1966/67 to 1983/84, quarterly industry gross new mining capital expenditure data constructed from source (e) were scaled so that annual totals equaled mining industry gross fixed capital expenditure estimates from source (k). A quarter of the annual capital consumption (depreciation) from source (k) is then subtracted from each scaled quarterly estimate of industry gross capital expenditure to obtain an estimate of net capital expenditure.

    The estimate of net capital expenditure for the March quarter of each year is added to the source (k) end-year capital stock of the previous year to obtain an end-September capital stock series in each year. Estimates of end-December and end-March net capital stock are constructed in the same manner, that is, by adding the estimates of net capital expenditure to the end-September and end-December capital stocks, respectively.

    For 1984/85 and 1985/86 the quarterly mining capital stock is determined by the method shown for the total capital stock in series (22), where the depreciation rate for mining capital equals that implied for 1983/84 in 1984/85 and 1985/86.

41. Manufacturing Employment: definition, sources and presentation as for series (38) except includes only manufacturing sector.
42. Manufacturing GDP: definition as for series (15). Sources and presentation as for series (39) except includes only manufacturing sector.
43. Manufacturing Capital Stock: definition, sources and presentation as for series (40) except includes only manufacturing sector gross fixed capital expenditure, capital consumption and net capital stock.
44. Finance etc Employment: definition. Sources and presentation as for series (38) except includes only finance, property and business services sectors.
45. Finance etc GDP: definition as for series (16). Sources and presentation as for series (39) except includes only finance, property and business services sectors.
46. Finance etc Capital Stock: definition, sources and presentation as for series (40) except includes only finance, property and business services sectors, gross fixed capital expenditure, capital consumption and net capital stock.
47. Other Industries Employment: definition, sources and presentation as for series (38) except for all other industries (as listed for series (13)) derived as a residual. That is, (47) = L_t-[(38)+(41)+(44)].
48. Other Industries GDP: definition as for series (17). Sources and presentation as for series (39) except for all other industries (as listed for series (13)), derived as a residual. That is,
    (48) = (1) – [(39)+(42)+(45)].
49. Other Industries Capital Stock: definition, sources and presentation as for series (40) except for all other industries (as listed for series (13)) derived as a residual. That is, (49) = K_t – [(40)+(43)+(46)].
50. Capacity Utilisation: the proportion of respondants to the CAI/Westpac Survey of Manufacturing who stated they were operating at a “satisfactorily full” rate of operation, less the proportion of respondants who stated that they were not, annual average. Source (o).
51. Labour – Factor Cost less Marginal Product: Factor Cost is defined as real unit labour cost (series (33)), quarterly. Source (m). Marginal product is derived from equation (3) in text, as discussed in Section 3.4, where:

    
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    and

    α = capital's share of output estimated, using a Cobb-Douglas production function, to equal 0.36. See Appendix A, table A.1. Source (u).

    Q_t = GDP as defined for series (1). 4-quarter-ended, constant prices. Sources as for series (1).

    = labour force in efficiency units as defined for series (23). Source (u).

52. Capital-Factor Cost less Marginal Product: Factor cost is proxied by the real after tax cost of debt (series (34)), quarterly, annual rate. Source (q). Marginal product is derived from equation (4) in text, as discussed in Section 3.4 where:

    
    View MathML

    and

    α = capital's share of output estimated, using a Cobb-Douglas production function, to equal 0.36. See Appendix A, Table A.1.

    Q_t = GDP as defined for series (1), 4-quarter-ended, constant prices. Sources as for series (1).

    K_t = net capital stock as defined for series (22), end-quarter, constant prices. Sources as for series (22).

    μ = weighted average annual rate of depreciation of the net capital stock as defined and sourced for series (34).

53. Investment/Capital Stock: Private gross fixed capital expenditure on equipment and non-dwelling construction (series (7) and (8) respectively) as a proportion of private sector capital stock excluding inventories (defined as KP for series (22)), annual average. Source (u).
54. Tobins q Ratio: Ratio of the market value of the private capital stock to its replacement cost, annual average. Source (r).
55. EPAC Incentive Ratio: Ratio of the expected rate of return on capital to the opportunity cost of funding the capital expenditure, annual average. Source: available on request to EPAC.
56. Profit/GDP: After-tax corporate profit (including financial ⁽ enterprises) as a proportion of GDP (Series (1)). After-tax corporate profit includes gross operating surplus of companies and financial enterprises less the imputed bank service charge less income tax paid by companies and financial enterprises, current prices. Sources (a) and (b). GDP is as defined for series (1) except excluding indirect taxes less subsidies (that is, GDP at factor cost), current prices. Source (b).
57. Competitiveness: Index of competitiveness constructed from a measure of unit labour costs in USA, Japan, UK, Germany, Canada and France (weighted by the average share of Australian's imports which comes from each) relative to unit labour costs in Australia, adjusted for the exchange rate, annual average. Source (u), derived from sources (p) and (t). Full details of methodology available on request.

(B.3) Data

All data ara presented as described in section B.2. Series are numbered (in parantheses) according to order of listing in action B.2.