RDP 8606: The Nation's Wealth – Some New Calculations for Australia Appendix 2: Detailed Data Sources

John Piggott

June 1986

Table 1
Derivation of Estimates of Value of Residential Land and Housing
  (1) (2) (3) (4) (5) (6)
Number of
Dwellings
Completed		 Sales by
Housing
Authorities		 Demolitions
 		 Net change in
Stock
[(1)+(2)−(3)]		 Total
Stock		 Value
$ Million
80 (1) 27,465 125 2,325 25,265 4,993,519 241,432
  (2) 30,653 125 2,325 28,453 5,021,972 253,333
  (3) 30,890 125 2,325 28,690 5,050,662 275,827
  (4) 34,660 125 2,325 32,460 5,083,122 278,032
81 (1) 28,560 124 2,325 26,359 5,109,482 287,373
  (2) 31,370 124 2,325 29,169 5,138,651 297,456
  (3) 34,080 65 2,325 31,820 5,170,471 308,569
  (4) 36,130 65 2,325 33,870 5,204,341 319,848
82 (1) 28,450 65 2,325 26,190 5,230,531 324,617
  (2) 30,320 64 2,325 28,059 5,258,590 325,260
  (3) 31,370 −88 2,325 28,957 5,287,547 329,240
  (4) 30,300 −88 2,325 27,887 5,315,434 333,023
83 (1) 20,690 −88 2,325 18,277 5,333,711 347,534
  (2) 22,400 −88 2,325 19,987 5,353,698 355,743
  (3) 25,620 −37 2,325 23,258 5,376,956 354,997
  (4) 29,680 −37 2,325 27,318 5,404,274 363,454
84 (1) 25,280 −37 2,325 22,918 5,427,192 374,910
  (2) 30,130 −38 2,325 27,767 5,454,959 388,579
  (3) 32,080 −391 2,325 29,364 5,484,323 400,696
  (4) 35,630 −391 2,325 32,914 5,517,237 416,127
85 (1) 29,550 −391 2,325 26,834 5,544,071 427,681
  (2) 31,590 −391 2,325 28,874 5,572,945 439,889

NOTES TO TABLE 1

  1. No. of Private Dwellings Completed:

    Source: ABS Cat. No. 8705.0 ‘Building Activity’
    Table 2 – Summary of Private Sector Building Activity
    Figure is the oriqinal series

  2. Sales by Housing Authority:

    Source: Annual Report on the Housing Assistance Act
    (Dept. of Housing and Construction).

  3. Demolition

    10,000 demolitions are assumed a year for all dwellings – 93 per cent of which is owned by persons i.e. 9,300 demolitions in private sector i.e. 2,325 per quarter.

  4. Change in Stock:

    = No. of dwellings (1)
    + Sales by H. Authority (2)
    − Demolitions (3)

  5. Total Stock:

    Figure for June 1981 is from 1981 Population census, i.e., 5,138,651.

    Stock at quarter (t + 1) = Stock at (t) + change in stock (col. 4) at (t+1).

  6. Value of Residential Land and Buildings (col. 6)

    The value estimates were obtained by multiplying entries in column 5 by the house price series supplied by the Department of Housing and Construction (DHC). Although this price series was derived as a composite of publicly available price series, such as those provided by BIS-Shrapnel and the various State Valuers-General, DHC does not yet consider its estimates reliable enough for detailed work on the housing market. Accordingly, DHC has requested that the series not be reproduced here. The series is considered adequate for calculations within the broader framework of aggregate wealth estimates.
TABLE 2:
DERIVATION OF AGGREGATE CORPORATE WEALTH
  (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)
  STATEX SAMPLE DATA   AGGREGATE DATA  
Market
Capitalisation
 		 Net
Financial
Assets		 Earnings
Before
Interest		 Dividend
Received
 		 Interest
Received
 		 Corporate
Wealth
(1)–(2)		 GOS+TVSA
(3)–(4)–(5)
 		 Corporate
Wealth
(GOS+TVSA)
(6) + (7)		 GOS
 		 TSVA
 		 GOS+TVSA
(9)+(10)
 		 WBC
(8)×(11)
 		 Companies
in
Sample
1979–80 31,489.6 −4,879.9 5,813.48 189.58 268.69 36,369.46 5,355.2 6.79 13,814 2,719 16,533 112,281 318
1980–81 32,792.3 −5,714.3 6,408.75 205.34 433.99 38,506.55 5,769.4 6.67 15,990 2,093 18,083 120,592 348
1981–82 29,090.5 −11,056.3 6,582.62 236.51 698.04 40,146.80 5,648.07 7.11 16,382 2,318 18,700 132,921 363
1982–83 42,486.8 −10,958.1 8,949.88 273.31 985.71 53,444.9 7,690.9 6.95 17,568 2,292 19,860 138,010 380
1983–84 49,100.5 −10,073.5 9,485.70 321.47 1,051.48 59,174.0 8,112.8 7.29 23,185 1,418 24,603 179,452 400
1984–85 52,358.0 −9,351.5 10,131.60 421.18 1,154.69 61,709.51 8,555.61 7.21 25,843 2,475 28,318 204,253 352

Notes:

  1. Business Wealth (incorporated) (Col. 6) is market capitalisation less net financial assets.
  2. The value of gross operating surplus (GOS) plus Traded Value Stock Adjustments (TVSA) for the sample is derived from Earnings before interest (Col. 3) less dividend received (Col. 4) and less interest received (Col. 5)
  3. The ratio of Business Wealth to (gross operating surplus plus TVSA) is in Col. 8 and is used to calculate the aggregate Business Wealth by multiplying this ratio by the sum of GOS and TSVA.

Sources:

  1. For the sample: Market Capitalisation (Col. 1),
    Net Financial Assets (Col. 2),
    Earnings before interest (Col. 3),
    Dividend received (Col. 4),
    Interest received (Col. 5),
    Companies in sample (Col. 13).
    are from: Sydney Stock Exchange (SSE)'s STATEX services.
  2. Col. 8: Gross operating surplus (GOS) and Traded Value Stock Adjustment (TVSA) are from Table 2, Australian National Accounts 1984–1985, A.B.S. Cat. No. 5204.0.
TABLE 3: FOREIGN SECTOR ADJUSTMENTS $ MILLION
  Level of Australian Investment Abroad Level of Foreign Investment in Australia
  Corporate Equities  
Corporate Equities(1) Accounts
Payable
(2)		 Other
Instruments
(1)		 Total
 		 Paid up
value
 		 Ratio of market
to paid up value
  		estimated
market value
 		 Other
 		 Total
adjusted
 
Direct
 		 Portfolio
 
1979–80 872 118 1,685 1,319 3,994 5,811 3.7640 21,873 11,362 34,836
1980–81 942 147 1,788 1,350 4,227 7,526 4.1387 31,148 14,817 48,179
1981–82 1,231 445 1,867 1,785 5,328 8,679 2.7980 23,284 23,774 50,373
1982–83(3) 1,773 1,058 4,578 7,409 10,344 3.5217 36,428 35,940 72,368
1983–84 2,918 1,199 5,245 9,362 11,015 3.8625 42,545 44,521 87,066
1984–85 5,264 2,483 7,974 15,721 11,950 4.9907 59,638 66,227 125,865

Notes:

  1. From 1984–85, corporate equities in portfolio is at market value – before that it is on a mixture of bases including paid up value.
  2. “Accounts Payable” is the exports Trade Credit Nei – see sources.

Source:

  1. For 1979–80 to 1981–82: ABS Cat. No. 5305.0 Foreign Investment – Australia 1983–84 Table 41.
  2. For 1979–80 to 1981–82: “Accounts Payable” is from ABS Cat. 5303.0 Balance of Payments 1983–84, Table 4.
  3. ABS. Cat. No. 5306.0 Foreign Investment, Australia September quarter 1985 Table 3.
TABLE 4
NON-FARM BUSINESS FIXED ASSETS AND INVENTORIES – ANNUAL ESTIMATES – ADJUSTMENTS FOR UNINCORPORATED WEALTH AND FOREIGN OWNERSHIP
$ MILLION
  Estimated aggreqate incorporated wealth Unincorporated wealth Foreiqn Ownership Net Non-Farm Business Fixed Assets and Inventories
79–80 112,281 20,772 34,836 98,199
80–81 120,592 22,328 48,179 94,841
81–82 132,921 24,590 50,373 107,138
82–83 138,010 25,532 72,368 91,174
83–84 179,452 33,199 87,066 125,585
84–85 204,253 37,787 125,865 116,195

Notes:

  1. Unincorporated Wealth is calculated as being 0.185 of incorporated Business Wealth.
  2. Foreign ownership is calculated from Table 3.
  3. Net Business Fixed Assets is derived as the sum of WBC and Unincorporated Wealth minus Foreign Owned Investments.
TABLE 5
DERIVATION OF QUARTERLY NET NON-FARM BUSINESS FIXED ASSETS AND INVENTORIES
$ MILLION
  Incorporated and Unincorporated Business Wealth Foreign Ownership Business Fixed Assets – Net
1980 (1) 130,539 31,317 99,222
  (2) 133,035 34,836 98,199
  (3) 135,531 38,172 97,354
  (4) 138,028 41,508 96,520
1981 (1) 140,524 44,843 95,681
  (2) 143,020 48,179 94,841
  (3) 146,643 48,728 97,915
  (4) 150,266 49,276 100,990
1982 (1) 153,888 49,825 104,063
  (2) 157,511 50,373 107,138
  (3) 159,019 55,872 103,147
  (4) 160,527 61,371 99,156
1983 (1) 162,034 66,869 95,165
  (2) 163,542 72,368 91,174
  (3) 175,819 76,043 99,776
  (4) 188,097 79,717 108,380
1984 (1) 200,374 83,392 116,982
  (2) 212,651 87,066 125,585
  (3) 219,998 96,766 123,232
  (4) 227,346 106,466 120,880
1985 (1) 234,693 116,165 118,528
  (2) 242,040 125,865 116,175
  (3)  
  (4)  

Notes:
The annual figures (i.e. as at June each year) are taken as the values for the second quarter of each year; simple linear interpolation is used to calculate the intervening quarters by taking the difference between two successive June quarters and dividing it by 4 and the result is added to the first June quarter to derive the September quarter, to the September quarter to derive the December quarter etc..
e.g. to calculate the level of Foreign Owned Investment for quarters 1980 (3), 1980 (4), 1981 (1) the difference between quarters 1980 (2) and 1981 (2) is calculated = 48179 − 34836 = 13343 hence: quarter 1980 (3) = quarter 1980 (2) + 13,343/4 = 34,836 + 3,336 = 38,172
Table 6
Annual Data for Local Authority and Semi-Government Bonds at Face Value
$ million
Year (Value at June 30) Total Of which
other holdings Foreign Owned holdings*
1980 16,315 4,070 2,035
1981 19,093 5,717 2,859
1982 22,991 8,250 4,125
1983 28,352 11,936 5,968
1984 33,320 14,381 7,191
1985 38,678 19,331 9,665

Note
* Foreign owned holdings are derived from the assumption that about half of “other holdings” are held by the foreign sector. This assumption is supported by the flow estimates.

Source: Reserve Bank Bulletin December 1985. Table I15.

Table 7
Derivation of Quarterly Data for Non-official Holdinqs of Government Bonds
  Local Authority & Semi Govt Bonds (4)
Foreign
owned
holdings
face value
$ million 		(5)
Foreign
owned
holdings
mrkt value
$ million 		Commonwealth Bonds held domestically (9)
Total Net
Non-Official
Holdings of
Govt Bonds
(3)−(5)+(8)
$ billion
(1)
Face
Value
$ million
  		(2)
Ratio of
Market
to Face value		 (3)
Market
Value
(1)×(2)
$ million
 		 (6)
Face
Value
$ million
 		 (7)
Ratio of
Market to
Face Value		 (8)
Market
Value
(6)×(7)
$ million
 
1980 (1) 15,673 0.81 12,695 1,829 1,481 19,840 0.85 16,864 28.1
  (2) 16,315 0.80 13,052 2,035 1,689 18,294 0.84 15,367 26.8
  (3) 17,009 0.81 13,777 2,241 1,815 19,254 0.85 16,366 28.3
  (4) 17,703 0.78 13,808 2,449 1,909 20,688 0.82 16,964 28.9
1981 (1) 18,398 0.77 14,166 2,653 2,043 21,921 0.82 17,975 30.1
  (2) 19,093 0.77 14,702 2,859 2,201 20,306 0.82 16,651 29.2
  (3) 20,067 0.71 14,248 3,176 2,255 20,251 0.78 15,796 27.7
  (4) 21,041 0.77 16,202 3,492 2,689 20,965 0.80 16,772 30.3
1982 (1) 22,016 0.70 15,411 3,809 2,666 21,697 0.78 16,924 29.6
  (2) 22,991 0.70 16,094 4,125 2,888 20,309 0.78 15,841 29.0
  (3) 24,331 0.77 18,735 4,586 3,531 21,930 0.82 17,983 33.2
  (4) 25,671 0.82 21,050 5,047 4,139 25,379 0.86 21,826 38.8
1983 (1) 27,011 0.81 21,879 5,507 4,461 26,369 0.86 22,677 40.1
  (2) 28,352 0.80 22,682 5,968 4,774 26,321 0.85 22,373 40.3
  (3) 29,594 0.85 25,155 6,276 5,335 30,047 0.89 26,742 46.6
  (4) 30,836 0.90 27,752 6,583 5,925 35,130 0.93 32,671 54.5
1984 (1) 32,078 0.87 27,908 6,891 5,995 36,709 0.91 33,405 55.3
  (2) 33,320 0.90 29,988 7,191 6,478 34,485 0.93 32,071 55.6
  (3) 34,660 0.91 31,541 7,810 7,107 37,347 0.93 34,733 59.2
  (4) 35,999 0.91 32,759 8,428 7,669 38,494 0.94 36,184 61.3
1985 (1) 37,339 0.90 33,605 9,047 8,142 40,947 0.93 38,081 63.5
  (2) 38,678 0.88 34,037 9,665 8,505 37,375 0.92 34,385 59.9

Notes:

  1. Linear Interpolation is applied to the annual date of Local Authority and Semi-Govt Bonds (LSB) to derive quarterly figures.
  2. Flow estimates suggest that about half of “other holdings” component of total LSB is held by the foreign sector and hence must be adjusted to exclude this factor. The foreign owned part of ‘other holdings’ is also computed at market value and quarterly figures are interpolated from annual figures.
  3. Total Net Non Official Holdings of Govt. Bonds = Total Holdings of LSB and VGS at Market Prices minus Foreign owned Holding at Market Prices.

Sources:

  1. Face values of government bonds: RBA Bulletin, December 1985, Table I9 and I15, and additional unpublished data.
  2. Ratios of Market to Face values – Reserve Bank, unpublished data. The ratio for Commonwealth bonds (CB) was derived from market data. The LSB ratio is an estimate based on the CB ratio and the rate of interest.