Bernard Williams Director Balance of Payments and International Trade Statistics

2. 1st Meeting of the Working Party on International Trade in Goods and Trade in Services Statistics - September 2008 Australia's experience (so far) in implementing BPM 6 Bernard Williams Director Balance of Payments and International Trade Statistics

3. Overview • ABS implementing BPM 6 and SNA 93 Rev. 1 for September quarter 2009 • considerable progress has been made • a number of challenges remain • This presentation focusses on: • processes used • issues faced

4. Organisational context • ABS releases Australia's key macro-economic statistics • national accounts, balance of payments, international investment position, financial accounts and government finance statistics • National and international accounts within the Macroeconomics and Integration Group • but number of different sections

5. Organisational context (continued) • Source data for the accounts provided by: • areas within the Macroeconomics and Integration Group • other areas of the ABS • a range of non-ABS sources

6. Organisational context (continued) • Source data for the accounts provided by: • areas within the Macroeconomics and Integration Group • other areas of the ABS • a range of non-ABS sources • Main sources for Australia's BoP are: • monthly merchandise trade statistics • quarterly Survey of International Trade in Services. • quarterly International Investment Survey

7. Principles • Standards • minimal departures • applied consistently • only implemented after extensive consultation and publicity

8. Principles • Standards • minimal departures • applied consistently • only implemented after extensive consultation and publicity • Timing • implement changes to GDP at same time

9. Principles • Standards • minimal departures • applied consistently • only implemented after extensive consultation and publicity • Timing • implement changes to GDP at same time • Coordination and consultation • central coordination • provide clients with early advice • equal access to all clients

10. Governance • Overview by a high level internal ABS committee

11. Governance (continued) • Committee to oversee tactical aspects of the implementation: • plan and coordinate ABS input to standards • forum for the discussion of key issues • ensure appropriate consultation on key issues • facilitate information sharing • assess implications for ABS data collections • plan and monitor progress on implementation of new standards in macro-economic statistics and data collections • capturing outcomes to ensure successful and effective knowledge management

12. Five phase strategy • Phase 1 - Input to Development of International Standards • 2005 to 2007 - input to international standards

13. Five phase strategy (continued) • Phase 2 - Scoping • initial assessment of issues • standard template developed • the issue • lead area • stakeholders • relevant BPM 5 standard • current ABS practice • proposed BPM 6 standard • implications for ABS

14. Five phase strategy (continued) • Phase 3 Work Program Integration and Internal Communication • detailed workplans prepared • recognise interdependencies between areas, system redevelopment plans and other developments

15. Five phase strategy (continued) • Phase 4 External Communication • information paper released • key economic agencies contacted • additional information papers planned for 2009

16. Five phase strategy (continued) • Phase 5 Implementation • by 2008-09 Annuals • still in progress • detailed work to modify or develop sources, questionnaires, methods and outputs • producing necessary back series on the new basis • updating reference material

17. Funding • Non essential development deferred • Additional development funding through the ABS internal budget • Additional funding received from the Australian government

18. Implementing BPM 6 • Starting point • basically fully implemented BPM 5 • foreshadowed some BPM 6 changes • Significant changes include: • merchanting • goods for processing • greater detail for the international investment position • changed treatments to investment income

19. Implementing BPM 6 (continued) • Trade in goods • procedures for processing merchandise trade data • will result in increased focus on certain series • For trade in services changes categorised under • frame • survey design • questionnaire and explanatory notes • models • other system changes • output presentation

20. Implementing BPM 6 (continued) • Historical series revised to make the time series of estimates as continuous as possible • classification changes • new series • a standard approach to measuring shifts in the level of series

21. Issues faced • General • staff • ongoing statistical production • alignment with other significant changes • focus

22. Issues faced (continued) • Specific issues faced by the ABS included: • 2009 meant that not all decisions known early • issues more complex than anticipated • complex relationship between commodity classifications • size and complexity of the Survey of International Investment

23. Challenges ahead • Other international standards • Lead time required for compiling estimates on a new basis • Goods for processing

24. Challenges ahead (continued) • Goods for processing • negative service fees • not capturing goods exported from Australia for processing and subsequent importation • incomplete coverage • pharmaceutical industry practices vary: • actually taking ownership • no change of ownership occurring • consumed after processing • Customs based export and import documentation does not provide sufficient information

25. Conclusion • Plan on the basis of the entire set of macro-economic statistics rather than the separate components • Comprehensive change management processes established • Stakeholders both within and outside the ABS consulted • Establishing a set of principles provided a solid basis for decision making • Considerable challenge to keep data sources and models up-to-date