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National Accounts (Industry Benchmarks): Year ended March 2012
Embargoed until 10:45am  –  21 November 2014
Data quality

Period-specific information
This section contains information about data that has changed since the last release.

General information
This section contains information about data that does not change between releases.

Period-specific information

Revised figures from changing international standards

This release incorporates changes in international standards as recommended in the System of National Accounts 2008 (2008SNA) – for the first time.

Preview of 2014 national accounts improvements outlines the conceptual changes of the new international standards and the expected magnitude of revisions to GDP as a result. These revisions are discussed in the commentary section of this release.

Capitalising research and development

Capitalising research and development (R&D) has the largest effect on GDP of the international standard updates. This update means we treat R&D expenditure as an investment instead of an expense. Expenditure includes the costs of all inputs of labour, materials, and capital goods used in the R&D process.

Businesses' R&D investment directly contributes an increase to GDP. As Crown research institutes and universities do not generally sell their output, we use the operational cost of these institutions to estimate the value of their output. The depreciation of accumulated R&D investments adds to their output and GDP contribution.  

Weapons systems’ capitalisation recognises use over full-service life

Weapons delivery systems, such as fighter aircraft or tanks, were treated as a current expense under the old standards. Under 2008SNA, we now treat them as an investment, with the weapons classified as fixed assets. This increases GDP, not due to the reclassification (weapons expenditures are already included in final government expenditure) but due to the increasing consumption of fixed capital in government expenditure. Expenditure on weapons systems by the New Zealand armed forces is small; the highest percentage revision to GDP is 0.1 percent.

Other asset changes

The biggest change in the 'other asset changes' category is improvement to our measurement of assets produced in-house. These are often measured as the sum of the cost of inputs used in the asset production process, as there are no market prices available. The updated standards revise the recommended valuation method to also include the full value of capital services in the costs, including a return on capital. This valuation change raises the level of investment and GDP. In recent periods, the effect is small. However, there is a larger effect in the pre-1990 period, when internal agencies (eg Ministry of Works) carried out a significant amount of government construction on behalf of other parts of central and local government.

Other asset changes revise GDP by between 0.2 percent and 0.3 percent between 1972 and 1987, then less than 0.1 percent from 1988 onwards.

Updates to the financial sector

The international standards were updated to reflect developments in the financial sector, a fast-changing segment of modern economies. The changes include:

  • service charge on non-life insurance
  • unfunded pension schemes.

We have updated non-life insurance output to better reflect long-term expectations of future claims and to deal with irregular or exceptional events such as the Christchurch earthquakes in 2010/11. Under the new standard, expected claims are deducted rather than actual claims. This smoothes the measurement of the service charge, and better reflects actual insurance company practices. The result is a small increase in GDP, largely reflecting higher consumption of insurance services by households and the non-market sectors.

2008SNA recommends a revised treatment of defined benefit employer pension schemes, to record the true liability of the employers, and match it with a household pension asset, whether or not the schemes themselves are over-or under-funded. This treatment applies to both funded and unfunded schemes. For New Zealand, the major effect comes through revising our treatment of the Government Superannuation Fund.

The updates to pension transactions include data improvements affecting the output of central government, which has a mainly downward effect on GDP for the 1970s, 1980s, and 1990s.

Other corrections and improvements

Improvements and corrections to measuring non-life insurance

As part of implementing the updated standards for measuring non-life insurance, we reviewed the current methods and processes to calculate the supply and use of insurance services. Correcting inconsistencies we found in the calculations used resulted in small (predominantly negative) changes to GDP.

Improvements and corrections to measuring capital stocks and depreciation

Issues we identified while implementing the new international standards led to downward revisions to depreciation and capital stocks. Those for depreciation partly offset the additional depreciation from updating the international standards. In the latest years, the negative effect on capital stocks is greater than the overall increase in stocks from implementing the new standards.

Revised depreciation affects GDP through the changed contributions from government and non-profit sectors; however, it is not significant in size. All other parts of the economy also have revisions to depreciation, which flow through to net saving for households and other sectors.

Annual updates to 2011 and 2012

New annual data come from updated annual data sources for 2011 and 2012. We reconcile annual current-price production and expenditure estimates of GDP components within the supply and use framework. This process resulted in industry revisions (from the numbers published last year) for the contribution to GDP for some industries; however, the revision to total GDP from this process for 2011 is less than 0.1 percent. New industry data is now available for the 2012 year.

General information

GDP and expenditure on GDP

GDP is a measure of the value added from all economic activity in New Zealand. The consolidated accounts of the nation show the main forms of income generated by the economy and the categories of final expenditure on the GDP.

Supply and use balancing

We reconcile, annual current-price production and expenditure estimates of GDP components within the supply and use framework. This framework provides a powerful statistical and analytical tool within which to balance the flows of goods and services in the economy. Within the framework we present a detailed analysis of the production and use of goods and services, and the incomes generated in that production.

The accounts are balanced when, for all industries, total inputs equal total outputs; and, for products, total supply equals total demand. As a result, the statistical discrepancy between the measures of GDP is zero in the years for which we carry out balancing.

The supply and use approach also provides the basis for checking consistency of the measures for the supply and use of goods and services, which are estimated from quite different statistical sources. This data confrontation results in balanced GDP and expenditure accounts. We produce analytical tables (for supply and use data confrontation) known as supply and use tables. This approach leads to improved accuracy for key national accounts measures, such as GDP, gross national expenditure, national disposable income, and their components.

First edition of sources and methods for annual national accounts

We have released the first edition of a guide to the data and methods we use to compile the annual national accounts in New Zealand. The primary purpose of the guide is to specify the data and methods we currently use to compile particular published statistics, released as the National Accounts (Industry Benchmarks) and National Accounts (Income and Expenditure).

Annual national accounts sources and methods provides an overview of the conceptual framework of the national accounts, and other information, to help interpret the sources and methods in the three sets of tables attached to the guide:

  • industry
  • expenditure
  • institutional sector accounts.

Confidentiality

Australian and New Zealand Standard Industrial Classification 2006 (ANZSIC06) data is published in categories specified in the New Zealand Standard Industry Output Categories (NZSIOC) classification.

See New Zealand Standard Industry Output Categories classification tables for a table showing NZSIOC levels. 

The annual national accounts are published at NZSIOC level 3, which has 55 industry categories, more than the ANZSIC96 equivalent. As with ANZSIC96, some industries may be grouped to preserve the confidentiality of individual businesses.

More information

Statistics in the release have been produced in accordance with the Official Statistics System principles and protocols for producers of Tier 1 statistics for quality. They conform to the Statistics NZ Methodological Standard for Reporting for Data Quality.

Liability

While all care and diligence has been used in processing, analysing, and extracting data and information in this publication, Statistics NZ gives no warranty it is error-free and will not be liable for any loss or damage suffered by the use directly, or indirectly, of the information in this publication.

Timing

Our information releases are delivered electronically by third parties. Delivery may be delayed by circumstances outside our control.

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