New Zealand System of National Accounts
The New Zealand System of National Accounts (NZSNA) is a comprehensive accounting framework based on an international standard (System of National Accounts, 1993). The structure and content of the NZSNA transforms the countless economic transactions that take place each day into a framework, to analyse and compare important economic variables over time. One major objective of the NZSNA is to derive gross domestic product (GDP).
The NZSNA are based on the results of a wide and varying range of surveys and censuses. The organisation and presentation of this material in a systematic form allows the behaviour and interaction of the major parts of the economy to be identified, and the impact of structural changes to be understood.
Gross domestic product (GDP) is a frequently used measure of economic activity. In principle GDP can be derived using three approaches, namely the production, income, and expenditure approaches. The production measure of GDP is derived from firm level data and estimates the value added by all producing industries in the New Zealand economy. The income measure of GDP is derived from earnings data and estimates how the income earned from these producing industries is then distributed throughout the economy as returns to labour, capital, and government. The expenditure measure of GDP is derived from data estimating spending on goods and services by final end users and includes consumption, investment, and exports minus the value of imports.
Additional information on both quarterly and annual methods can be found in Quarterly Gross Domestic Product: Sources and Methods, available for free at www.stats.govt.nz, or contact the information centre (call toll-free 0508 525 525 or email info@stats.govt.nz) to purchase a hard copy.
Supply and use balancing
Annual current price production and expenditure estimates of GDP components are reconciled 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. It presents 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 balancing has been carried out. The balancing process has now been undertaken for the years ended March 2006 and 2007.
The supply and use approach also provides the basis for checking the consistency of the measures of the supply and use of goods and services, which have been estimated from quite different statistical sources. This data confrontation results in balanced gross domestic product and expenditure accounts. Analytical tables produced for supply and use data confrontation are known as supply and use tables. This approach leads to improvements in the accuracy of key national accounts measures, such as GDP, gross national expenditure, national disposable income, and their components.
Comprehensive information from the Commodity Data Collection Survey has now been incorporated in the supply and use framework. This survey has collected data on income and expenditure by industry in the period 2003–08 and has provided detailed goods and services breakdowns. For the years ending March 2006 and March 2007, comprehensive results from the survey have been implemented in the supply and use framework. A technical description of the approach taken to implement the Commodity Data Collection results is available from National accounts: An optimisation approach for balancing supply and use tables on the Statistics New Zealand website.
More information
For more information, follow the link from the 'Technical notes' section of this release on the Statistics NZ website.
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