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National Accounts (Income and Expenditure): Year ended March 2013
Embargoed until 10:45am  –  28 November 2013
Commentary

The National Accounts (Income and Expenditure) give a detailed breakdown of the income and expenditure of institutional sectors and the economy as a whole. The accounts show the value of goods and services produced in the economy. It then shows the return on labour and investments in this production process, and how some of this income is then redistributed. The result is the income available for spending and saving. Finally, it shows how saving is then invested or lent to other sectors.

The full breakdown by institutional sector is available for 1999 to 2012, in which 2012 is a provisional estimate as it is based on unbalanced data. Full provisional estimates for 2013 are provided for government, household, and the rest of the world, while only limited variables are available for the other sectors. All dollar figures are in current prices (unless otherwise stated).

Saving higher than previously published

Statistics NZ has new information in this release that increases net exports from 1987 to 2013. The most significant change shows higher overseas visitor spending (exports of travel services) over this time. This change means that spending by New Zealand households is lower than previously published, and that saving is higher.

Graph, Household saving, current price, annual, 1987 to 2013.  

The higher spending by overseas visitors to New Zealand results from an improved methodology for the International Visitors Survey, and new research into spending by international students in New Zealand. These increases were partly offset by higher imports of goods than previously published. We are now including estimates for online purchases by households, such as books purchased over the Internet from an overseas company. For more information see the Revisions section.

GDP expenditure growth slows to 1.8 percent in 2013

The gross domestic product expenditure measure, which represents spending on goods and services produced in the New Zealand economy, was $211.6 billion in the March 2013 year. This was a 1.8 percent increase from 2012.

Graph, GDP and GDP per capita, current price, annual change, 2000 to 2013.

The expenditure measure of GDP differs slightly from the production measure in 2012 and 2013, since these years have not been balanced yet. For more information on this statistical discrepancy, see the Definitions section.

The increase in the expenditure measure of GDP was driven by a $3.5 billion increase in household spending and an increase of $3.0 billion in investment in non-financial assets (such as buildings and infrastructure).   

Graph, Investment in fixed assets, annual, current price, 1999 to 2013.

Investment levels recover as residential building grows strongly

Investment in non-financial assets increased 7.7 percent, to $41.8 billion in 2013. This is the highest level of investment since the peak in 2008.

The build-up of New Zealand's stock of capital shows a similar trend. It slowed down considerably as investment fell in 2009 and 2010 and picked up after that, with the economy showing signs of recovery following the global financial crisis.

Investment in residential buildings was the main driver of the increase in total investment, rising 22.7 percent to $11.0 billion.

Graph, Change in investment in residential buildings, annual change, current price, 1999 to 2013.

Investment in non-residential buildings was also up, increasing 6.8 percent compared with a drop of 6.4 percent in 2012.

These changes reflect the increased building activity, boosted by building work in the Canterbury region after the earthquakes.

National income boosted by salary and wage growth

National disposable income was up 2.0 percent in 2013.  The biggest driver of this change was compensation of employees, which was up $3.7 billion. 

Graph, Change in the national disposable income, year ended March 2013.

The other main form of income is net operating profit, which fell in 2013. The operating surplus of the agricultural industry declined after two years of strong growth. This has had flow-on effects for entrepreneurial income from farming received by households, which also fell.

Government income rises on higher tax intake from households and businesses 

There was a redistribution of income between sectors as a result of transfers paid in cash. The biggest increase was in the payment of personal and company tax, which increased the government's net disposable income at the expense of businesses and households. 

Net disposable income reflects the income available to each sector for either spending on goods and services, or saving.

Household saving falls as spending outpaces income

Net disposable income for households was up 1.8 percent in 2013. The most significant movements were:

  • compensation of employees increased $3.7 billion
  • farm entrepreneurial income fell $1.4 billion
  • personal tax increased $1.6 billion.

Household expenditure was up 2.9 percent in 2013, despite the small growth in income. As a result, household saving, which is the residual of these two numbers, fell to negative $0.8 billion in the March 2013 year.

 Graph, Household expenditure, income, and savings ratio, 1999 to 2013.

Growth in household expenditure largely came from services, with the main increases being:

  • housing and household utilities, up $1.1 billion
  • transport, up $0.5 billion
  • miscellaneous goods and services, up $0.5 billion
  • restaurants, up $0.4 billion.

For information on how the Household Economic Survey feeds into the national accounts household expenditure statistics, please see Data quality.

Government income increases more than spending

Government net disposable income was up 6.4 percent in 2013. This was largely due to an increased tax intake. Government spending was up 0.3 percent, compared with growth in spending of 2.9 percent in 2012.

Graph, Government saving, current price, annual, 1999 to 2013.

National saving remained largely unchanged at $5.1 billion in 2013, with positive saving by the business sectors more than offsetting negative saving by households and government.

Provisional estimates for businesses give more detail on business performance

This is the first year we have provided a provisional estimate of income and outlay accounts for all institutional sectors. For producer enterprises, financial intermediaries, and non-profit institutions serving households, we have provided provisional estimates of net lending for 2012. However, due to data limitations the 2013 provisional estimates for these three sectors include only gross operating surplus and compensation of employees.

Producer enterprises' total income receivable in the year ended March 2012 increased 4.1 percent, following a 0.1 percent decrease in 2011. The increase in 2012 was due to increases in gross operating surplus (up $1.8 billion) and dividends received (up $2.3 billion).

Gross operating surplus (business profits) for producer enterprises was up 2.5 percent in 2012, following an increase of 8.3 percent in 2011. Producer enterprises paid compensation to employees (mainly salaries and wages) of $64.2 billion in 2012, an increase of 4.2 percent.

Total income payable increased 2.5 percent in 2012, following a decrease of 2.0 percent in 2011.

Producer enterprises' saving was $8.0 billion in 2012, an increase of $2.0 billion compared with 2011. This saving was used to finance a build-up in inventories and investment in non-financial assets.  The remaining funds of $1.7 billion were lent to other sectors.

The 2013 provisional estimate for producer enterprises shows gross operating surplus falling 1.2 percent (down $0.8 billion) and compensation paid to employees increased 4.9 percent (up $3.2 billion).

Earthquake claims boost household net lending in 2011

Net capital transfers for 2011 showed sector-by-sector transfers relating to earthquake insurance claims. The rest of the world is a net payer in the form of reinsurance payments to the Earthquake Commission (EQC) and private insurance companies. The EQC (in the government sector) and financial intermediaries were net payers of capital transfers, as they used a combination of reinsurance money and their own reserves to meet household claims. 

Household net capital transfers represent claims received from both the EQC and financial intermediaries. These transactions are recorded on an accrual basis, so this figure includes both amounts that have been paid out and claims that are yet to be settled (and remain as a claim against the insurer).

For data on capital transfers between sectors in 2011, see table 2 of the institutional sector accounts tables in the 'Downloads' box.

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