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A. Braakmann, Th. Forster: Experiences in Europe in Updating the SNA: The Government Sector

This paper explores 4 issues in updating the SNA related to government owned assets, accrual accounting of taxes, public-private partnerships, and granting and activation of guarantees. The authors discuss implementation issues and recommended approaches for each issue.

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A. Braakmann, Th. Forster: Experiences in Europe in Updating the SNA: The Government Sector

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  1. A. Braakmann, Th. Forster:Experiences in Europe in Updating the SNA: The Government Sector Philippe Stauffer 29th IARIW Conference Session 7 A SNA (2) Swiss Federal Statistical Office

  2. 4 issues are investigated • Government owned assets and capital services • Accrual accounting of taxes • Public-private partnerships • Granting and activation of guarantees

  3. 1. Government owned assets and Capital services AEG recommendation Introduce a return on capital used for non-market production. Impact - Higher value-added, operating surplus, disposable income, consumption expenditure of GVT.- No impact on Net lending/borrowing of GVT. Implementation issues 1. Appropriate data on capital stock of non- market producers. 2. Appropriate rate of return. Outcomes - 19 European countries cannot compile appropriate rate of return due to lack of data. - Lack of harmonised price indices.

  4. 2. Accrual accounting of taxes • Various procedures to calculate tax revenues on accrual basis: 1. Model estimations 2. Shifting data 3. Cash data = accrual data. • Choice of method linked to characteristics of tax. • Results basically sound.

  5. Issue should not be presented in extensive way in updated SNA 3. Public-private partnerships (PPPs) • Central question: allocation of PPPs. • Allocation may be based on risk distribution between the public and private partners. • Eurostat identified three categories of risk. • Implementation problems: 1. Complexity of contracts 2. No obligation to report 3. Marked lack of information at local level 4. Enormous work-load

  6. 4. Granting and activation of guarantees Current treatment - Granting not recorded.- Call of guarantee Financial accounts - If amount cancelled Capital transfer Proposal - Liability when guarantee is granted.- Recommended use of insurance model. Implementation issues - Proxies have to be used. - Absolutely no information on some items.- Tricky treatment when central government is reimbursed for past guarantees. Proposal Use a simpler approach.

  7. Questions to the authors (A. Braakmann, Th. Forster): • Impact of real rate of return for capital services : Is govern-ment a special case, or are these problems also valid for the economy as a whole ? • Magnitude of change (+/-0,5%): the changes to GDP growth over time are mainly due to changes in the real rate of return. What about the annual profile ? • PPP’s: Why not adopt a convention ? 3. Granting/activation of guarantees: Doesn’t government provide any service at all ? What is the true nature of the asset of general government (“claim against the importer”)?

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