|
|
| Information about the Quarterly Balance of Payments |
Availability
| Valid From: .. | 12/31/1968 |
| To: .. | Ongoing |
| Frequency: .. | Quarterly |
Design
Purpose: New Zealand's balance of payments statements are records of the value of New Zealand's transactions in goods, services, income and transfers with the rest of the world, and the changes in New Zealand's financial claims on (assets), and liabilities to, the rest of the world.
General Information ..
Introduction
New Zealand's balance of payments statements are records of the value of New Zealand's transactions in goods, services, income and transfers with the rest of the world, and the changes in New Zealand's financial claims on (assets), and liabilities to, the rest of the world.
SNZ compiles Balance of Payments (BOP) statistics in accordance with conceptual guidelines contained in International Monetary Fund Balance of Payments Manuals. Successive editions of the manual have been published since 1948. The most recent manual (Balance of Payments Manual, 5th edition (BPM5)), published in 1993, is referred to as IMF Edition 5/ the 5th edition/BPM5, and incorporates changes to presentational and methodological guidelines for compiling and reporting balance of payments statistics.
With the release of the BOP statistics for the June quarter 1999, SNZ introduced the bulk of the changes required to meet 5th edition guidelines in respect of the current and capital accounts. The changes introduced in the June 1999 quarter included; redefining the current account to exclude items of a capital nature, for example migrants capital transfers; presentational changes to the BOP statement to reflect this redefinition of the current account, so that the BOP statement now comprises three accounts; current, capital and financial; expanding the classification of services introducing BPM5 changes to the compilation of services.
Beginning from the June quarter 2000, Statistics NZ moved its main financial account and international investment position data collection to a quarterly basis. At the same time, Statistics NZ introduced changes recommended in BPM5 to these collections. The new collection known as the Quarterly International Investment Survey (QIIS) collects data on the international financial assets and liabilities of resident end-investors. The survey collects data on the opening and closing position in all international financial assets and liabilities, the transactions and other changes in position (price and exchange rate changes), and the investment income associated with claims and liabilities to nonresidents.
Essential principles guiding the compilation of New Zealand's balance of payments statistics are:
· balance of payments statistics include transactions between residents of New Zealand and residents of other countries.
· transactions are recorded at the time ownership changes, or, in the case of services, when the service is performed.
· transactions are recorded at their market value. Foreign currency transactions are converted to their New Zealand dollar equivalent.
The balance of payments records both exchanges and transfers. Exchanges involve the exchange of equal economic value between two parties e.g. the export of goods in exchange for an equal monetary value. A transfer, on the other hand, involves a one sided transaction; e.g. goods supplied as aid where no payment is required in return.
When compiling a balance of payments statement, a double entry bookkeeping system is used. This ensures that, in the accounting sense, the account always balances. For example, exports of goods are recorded as credits. The payment in exchange for the goods is recorded as a debit, denoting either an increase in financial assets. Where goods are supplied as aid to foreign countries with no payment in return, then the goods are included as exports (credit) and an offsetting entry for the value of the goods is made under 'Transfers: debits'.
In practice the statement does not always balance. This is due to the variety of data sources used, the non capture of some transactions, and the possibility of errors in reporting and compilation. In order to balance the accounts, a balancing item is used. This is called the 'net errors and omissions', or the 'residual'.
Presentation
A New Zealand balance of payments statement can be viewed in the context of the current account, the capital account and the financial account including transactions in reserves.
Current account
The credit side of this account shows the export of goods and services, investment income earned and, under 'current transfers', the offsetting entries to resources received by residents without payment required.
The debit side shows the import of goods and services, investment income paid and, under 'current transfers', the offsetting entries to resources supplied to foreign residents without payment required.
To aid analysis, flows of goods, services, income and transfers are categorised into major types of transactions. In addition, certain balances are calculated. A 'balance' is the credits less debits for a particular item, or group of items. A negative sign represents a deficit, while a positive sign represents a surplus.
Balances are usually in surplus or deficit; zero balances are unusual. The balances are:
· balance on goods. This is merchandise exports (credits) less merchandise imports (debits);
· balance on services. This is services exports (credits) less services imports (debits).
· balance on income. This is income receipts (credits) less income payments (debits).
· balance on current transfers. This is current transfer inflows (credits) less current transfer outflows (debits).
· balance on goods and services. This is goods and services exports (credits) less goods and services imports (debits).
· balance on income and transfers. This is income and transfers inflows (credits) less income and transfers outflows (debits).
· balance on current account. This is the sum of the balance on goods and services and the balance on income and transfers.
Capital account
Under BPM5, this account covers all transactions that involve the receipt or payment of capital transfers and the acquisition or disposal of non-produced, non-financial assets. Capital transfers involve the transfer of ownership of fixed assets or the transfer of funds linked to them, without any counterpart transaction.
Financial account and reserves
Beginning from the June quarter 2000, Statistics NZ moved its main financial account and international investment position data collection to a quarterly basis. At the same time, Statistics NZ introduced changes recommended in BPM5 to these collections.
The new collection known as the Quarterly International Investment Survey (QIIS) collects data on the international financial assets and liabilities of resident end-investors. The survey collects data on the opening and closing position in all international financial assets and liabilities, the transactions and other changes in position (price and exchange rate changes), and the investment income associated with claims and liabilities to non-residents.
Direct investment
The direct investment threshold applied is 10 percent or more of the equity ownership in an enterprise at the individual investor level for both direct investment in New Zealand and New Zealand direct investment overseas. The types of direct investment transactions included under this classification are changes in equity capital, unremitted earnings, and changes in long- and short-term capital. From the June 2000 quarter onwards, New Zealand has been compiling financial account data on a BPM5 basis. The 10 percent or more equity ownership criterion is applied for both inward and outward direct investment activity.
Portfolio investment
Portfolio investment comprises transactions in debt securities (bonds and notes, and money market instruments) and equities that are not classified as either direct investment or reserves. In New Zealand, the data on the stock and flow of portfolio investment are collected from a number of quarterly surveys. Data on the stock and flow of portfolio investment (assets and liabilities) are available by instrument and by sector.
Data on portfolio assets held abroad by New Zealanders are collected from the QIIS and the Quarterly Managed Funds Survey. Both surveys collect stock and transactions data (however, prior to March 2005 some transactions data from QIIS were estimated.
Liabilities data are sourced from the QIIS (equity and debt securities), the Quarterly Nominees Survey (for equity data), and a Monthly Nominee Company Survey run by the RBNZ (for debt securities data). The Quarterly Nominees Survey provides data on the stock of New Zealand shares held by non-residents in the custody of a resident nominee. From the Nominee Survey, transactions data are derived from the stock data using external information obtained from the stock exchange and nominee companies. Adjustments are made for price and exchange rate changes and are included in the IIP statement. The RBNZ’s Monthly Nominee Company Survey collects information on the non-resident holdings of debt securities issued by New Zealand residents.
Other investment
The main sources used to collect data on other investment are the QIIS and the Quarterly Managed Funds Survey. The QIIS collects data on both assets and liabilities, while the Managed Funds Survey collects only assets data. The stock and flow of other investment assets and liabilities data are available by sector. Information on the term to maturity profile is available for a significant portion of the stock of other investment assets and liabilities.
Other investment includes all financial transactions that are not included in direct investment, portfolio investment, or reserve assets. Included are other assets and liabilities, loans, currency and deposits, and trade credits between unrelated parties.
Reserve assets
Reserve assets comprise the financial claims on non-residents that are available to the RBNZ and the New Zealand Treasury. The principal holder of New Zealand’s reserves is the RBNZ. The data, which relate to transactions in reserve assets as opposed to changes in holdings, are obtained from RBNZ records.
Publication
Statistics New Zealand (Statistics NZ) compiles New Zealand’s balance of payments statistics and international investment position statistics. From the June 2000 quarter, following the recommendations of BPM5, Statistics NZ began compiling and publishing a full set of balance of payments (current, capital and financial accounts) and international investment position statistics on a quarterly basis. Prior to this, full financial account and international investment position statistics are only available annually. Quarterly balance of payments and international investment position data are published within 12-13 weeks of the end of each quarter. March year-end balance of payments and international investment position statistics are also published within six months of the end of the reference year. The focus of the annual series is to provide additional information such as country, sector and industry breakdowns of foreign investment in New Zealand and New Zealand investment abroad.
Statistics NZ uses a wide variety of data sources to compile balance of payments and international investment position statistics. These include government's administrative data sources, surveys of New Zealand resident enterprises conducted by Statistics NZ, surveys conducted by other organizations, and data models and financial market information.
New Zealand's balance of payments and international investment position statistics are compiled in New Zealand dollars. Respondents to surveys are requested to convert amounts originally denominated in foreign currencies into New Zealand dollars at the rate of exchange applying at the time of the transaction or at the reference date for positions (stocks) data. In practice, data providers use a range of conversion practices in reporting their data to Statistics NZ.
Quality
Recent Initiatives
Refer to developments and improvements.
Undercoverage issues
Current account
Coverage and measurement problems exist in several components, for example, other services, transfers and international investment income.
The growth in the provision and acquisition of services by New Zealand businesses in recent years is difficult to capture. This is because of the large and rapidly changing survey population engaged in diverse service activities. To deal with this, the sample selection for the quarterly sample survey of services and royalties is regularly updated using the results of an annual 'births' survey.
Despite improvements to methodologies used, the estimates of the migrants transfers and personal transfers items of the current and capital transfers components are essentially model based. These estimates may not be adequately capturing the changing composition of migrants and the remittances made or received by New Zealand residents. Data received from the New Zealand Immigration Service for use in the model is currently of a lesser quality than previous estimates.
Other data weakness in the current account includes: travel debits, where a new benchmark survey has operated for the eight quarters up to and including the June 2004 quarter (work is underway to update the estimates); an element of undercoverage in merchandise trade (errors in documentation, and valuation and exchange rate effects); and possible undercoverage of transactors in the 'other services' component. A census of trade in other services is scheduled to take place in June 2005. The data from the census will be used to benchmark the quarterly trade in other services statistics.
Financial account
Significant areas of known financial account undercoverage are:
· The primary data sources for the financial account and IIP are sample surveys. While a new estimate is made for the non-sampled IIP stock positions each year (see Undercoverage estimate in IIP, below), no estimate is made for financial account transactions, nor for the associated current account investment income flows. As at 30 June 2004, the undercoverage estimate was $9.9 billion for the stock of foreign investment in New Zealand (liability), and $1.5 billion for New Zealand investment abroad (assets).
· Transactions related to managed funds that are not surveyed each quarter (see Annual Managed Funds Survey, below). The funds invested abroad were estimated at $0.9 billion at 31 December 2003. Note that neither the financial account transactions nor current account income are estimated for this item.
· Equity shareholding in overseas companies directly held by New Zealand individuals, estimated at $5.3 billion at 31 December 2003. Neither financial account transactions nor current account income are estimated for this item.
It is also possible that in any quarter there may be financial account transactions that, for a number of reasons, are not included in the accounts. Reasons for such undercoverage may include: transactions undertaken by entities that are not in the BoP survey frame; transactions not reported by existing survey respondents; and errors in data reporting and compilation.
Seasonal adjustment
Quarterly current account statistics are subject to large, short-term movements, both irregular and seasonal, which make the interpretation of trends in the original series difficult.
Seasonally adjusted and trend series help to reveal the underlying behaviour of a series. While seasonally adjusted series have had the seasonal component removed, trend series have had both the seasonal and the irregular components removed. An example of an irregular event is the purchase of a frigate in the December 1999 quarter. Trend estimates reveal the underlying direction of movement in a series and are likely to indicate turning points more accurately than are seasonally adjusted estimates.
The adjusted balance on current account is the sum of the adjusted goods, services, income and current transfers balances. The smoothed, seasonally adjusted current account balance (the trend) is formed in the same way.
The seasonally adjusted series are produced using the X-12-ARIMA seasonal adjustment package. The trend estimates are based on a five-term Henderson moving average of the seasonally adjusted series, with an adjustment for outlying values.
Towards the end of the series, trend estimates are subject to change, owing to the use of new data points in the estimation process as they become available. The main reason behind this is that the trend is calculated as a 'centred moving average' of the seasonally adjusted series. Seasonally adjusted values are also subject to some revision, as they are also calculated using 'centred moving average' technology. Generally, these revisions are not as great as for the trend.
Revisions can be particularly large if an observation is treated as an outlier in one period, but is found to be part of the underlying movement as further observations are added to the series. All trend estimates are subject to revisions each quarter, but normally only the previous two or three estimates are likely to be substantially altered.
See individual surveys
Output Variables
Output variables are pieces of individual information that can be extracted from the survey/output data. Often output variables can be cross tabulated with other output variables, for example sales by industry classification. The list below contains all current and past output variables which have been released for this survey/output.
| Variable Name | Description |
 | |
| Transaction Type | Credits, Debits, Balance (Credits - Debits) |
| Components | Goods,
Total services,
Transportation services,
Travel services,
Insurance services,
Communication services,
Construction services,
Financial services,
Computer and information services,
Royalties and licence fees,
Other business services,
Government Current transactions,
Investment income,
Current transfers,
Capital account,
Financial account - Official,
Reserves,
Current account |
| Data Type | Actual, Seasonally adjusted, Trend estimates for
Current account,
Goods,
Total services,
Income (trend only),
Current transfers,
Travel services,
Transportation services. |
Changes in Output Variables over time
Guide to Interpreting Data
Summary of Changes to Survey/Output ..With the release of the BOP statistics for the June quarter 1999, SNZ introduced the bulk of the changes required to meet 5th edition guidelines in respect of the current and capital accounts. The changes introduced in the June 1999 quarter included;
· redefining the current account to exclude items of a capital nature, for example migrants capital transfers;
· presentational changes to the BOP statement to reflect this redefinition of the current account, so that the BOP statement now comprises three accounts; current, capital and financial;
· expanding the classification of services
· introducing BPM5 changes to the compilation of services.
Beginning from the June quarter 2000, Statistics NZ moved its main financial account and international investment position data collection to a quarterly basis. At the same time, Statistics NZ introduced changes recommended in BPM5 to these collections.
The new collection known as the Quarterly International Investment Survey (QIIS) collects data on the international financial assets and liabilities of resident end-investors. The survey collects data on the opening and closing position in all international financial assets and liabilities, the transactions and other changes in position (price and exchange rate changes), and the investment income associated with claims and liabilities to non-residents.
Developments and improvements
Balance of Payments quality plan
Potential weaknesses in source data, methods and processes that reduce the fitness for use of BoP and IIP statistics were identified and prioritised in a discussion document disseminated to users in May 2004. User feedback on priorities was used to prepare a development plan to improve the quality and relevance of BoP and IIP statistics. A number of the BoP and IIP quality improvement projects are now underway. These include:
· a census of trade in other services (ie services other than travel, transportation and insurance)
· travel debits benchmark
· debt securities
· respondent education and management.
Census of trade in other services
The census is taking place in June 2005. The data from the census survey will be used to benchmark the quarterly trade in other services statistics. Work completed on this project so far includes:
· defining, discussing and agreeing on the data specification for the census
· developing a census questionnaire for testing
· undertaking two rounds of cognitive testing of the draft census questionnaire
· finalising a questionnaire for use in the census
· developing a census population strategy
· selecting the population to receive the census.
The results of the census are expected to be incorporated in the June 2005 quarter balance of payments statistics to be released in September 2005, and may result in revisions to the published series. In addition, the census will be the subject of a separate release expected to be made available at the end of October 2005.
Travel debits benchmark
In 2002, a project was begun to update the benchmark estimate for the travel debits component of the current account statistics. A benchmark Survey of Returned Travellers was undertaken quarterly from the September 2002 quarter to the June 2004 quarter. Analysis of the survey results has been completed. The results show that some of the assumptions built into the existing data model have changed over time and no longer hold true. A new data model is currently being developed that will be used to derive quarterly travel debits estimates.
Estimates from the new model will be included in the Balance of Payments statistics from the June 2005 quarter release. Revisions to published estimates will also be included in the BoP at this time. These revisions are likely to affect both the seasonality and the level of the travel debits series.
Debt securities project
The objective of the debt securities project is to improve the reporting of data on debt securities (assets and liabilities) of the banking sector. The quarterly investment flow data on debt securities for this sector is currently estimated from stock data. Work completed to date on this project includes:
· analysis of the existing flow data on debt securities at macro and micro levels, to highlight any inconsistencies in the data
· visiting key respondents and discussing reporting of debt securities data with them
· developing a collection framework that will deliver the additional data required from the banking sector
· trial collection of one quarter of data using the collection framework developed.
The additional data collected will be trialled for at least one further quarter for quality control purposes before being implemented in the published series. Results received will lead to revisions to the series.
Respondent education and management
The initial phase of this project included reviewing the explanatory notes to the Quarterly International Investment Survey (QIIS). The QIIS collects data on income flows, investment flows and stock of investment between New Zealand and the rest of the world. The review of the survey explanatory notes was aimed at enhancing the quality of data reporting in the QIIS. A new edition of the QIIS explanatory notes has been written (now called the Guide to Completing the Quarterly International Investment Survey), and was delivered to QIIS respondents with the March 2005 quarter QIIS questionnaires. The expected improvement in the quality of data reported to the survey may lead to revisions to the income, investment flow and stock of assets/liabilities series.
Usage and Limitations of the Data ..Coverage and measurement problems exist in several components, for example, other services, transfers and international investment income.
The growth in the provision and acquisition of services by New Zealand businesses in recent years is difficult to capture. This is because of the large and rapidly changing survey population engaged in diverse service activities. To deal with this, the sample selection for the quarterly sample survey of services and royalties is regularly updated using the results of an annual 'births' survey.
Despite improvements to methodologies used, the estimates of the migrants transfers and personal transfers items of the current and capital transfers components are essentially model based. These estimates may not be adequately capturing the changing composition of migrants and the remittances made or received by New Zealand residents. Data received from the New Zealand Immigration Service for use in the model is currently of a lesser quality than previous estimates.
Other data weakness in the current account includes: travel debits, where a new benchmark survey has operated for the eight quarters up to and including the June 2004 quarter (work is underway to update the estimates); an element of undercoverage in merchandise trade (errors in documentation, and valuation and exchange rate effects); and possible undercoverage of transactors in the 'other services' component. A census of trade in other services is scheduled to take place in June 2005. The data from the census will be used to benchmark the quarterly trade in other services statistics.
Related Data Sources ..System of National Accounts External Transactions Account, International Trade
Sampling Errors ..Not applicable
Non-sampling errors See individual data sources
Caveats on Release ..Please note that all calculations in the Hot Off The Press tables have been performed using unrounded numbers. Therefore, values in the media release, Hot Off The Press commentary and tables may not sum to the stated totals.
Where data within a table in this release discloses information about an individual respondent, or would allow close estimation of such information, data has been published only after obtaining the consent of those respondents (ie published under section 37(4)(a) of the Statistics Act 1975). Where affected respondents have not provided their consent, data remains confidential. Confidential data is indicated by a 'C' in the tables.
Catalogue & Reference Numbers
| HOTP: | 08.503 |
| INFOS: | BOPQ, BOPA |
Other Comments
Classification(s) used
Classifications |
Classification Versions |
Classification Type |
ANZSIC96 - Australian and New Zealand Standard Industrial Classification - NZ Version 1996 |
V4.1 |
NZ Standard |
Glossary of Terms
| Term | Description |
| |
| Balance of Payments | New Zealand's balance of payments statements are records of the value of New Zealand's transactions in goods, services, income and transfers with the rest of the world, and the changes in New Zealand's financial claims on (assets), and liabilities to, the rest of the world. |
| Current Account | The credit side of this account shows the export of goods and services, investment income earned and, under 'current transfers', the offsetting entries to resources received by residents without payment required.
The debit side shows the import of goods and services, investment income paid and, under 'current transfers', the offsetting entries to resources supplied to foreign residents without payment required.
To aid analysis, flows of goods, services, income and transfers are categorised into major types of transactions. In addition, certain balances are calculated. A 'balance' is the credits less debits for a particular item, or group of items. A negative sign represents a deficit, while a positive sign represents a surplus.
Balances are usually in surplus or deficit; zero balances are unusual. The balances are:
balance on goods. This is merchandise exports (credits) less merchandise imports (debits);
balance on services. This is services exports (credits) less services imports (debits).
balance on income. This is income receipts (credits) less income payments (debits).
balance on current transfers. This is current transfer inflows (credits) less current transfer outflows (debits).
balance on goods and services. This is goods and services exports (credits) less goods and services imports (debits).
balance on income and transfers. This is income and transfers inflows (credits) less income and transfers outflows (debits).
balance on current account. This is the sum of the balance on goods and services and the balance on income and transfers. |
| Goods | Exports and imports of goods in the balance of payments are based on the overseas merchandise trade statistics compiled monthly by Statistics New Zealand. These data, derived from the records of New Zealand’s Customs Service, record exports on an f.o.b. basis and imports on a c.i.f. basis. For balance of payments purposes, imports are valued on a v.f.d (value for duty) basis. This is considered to be a reasonable approximation for imports on an f.o.b. basis.
The following adjustments are made to exports: timing and valuation adjustments for goods sold on consignment, timing adjustments for goods that leave New Zealand in one period but are known to have changed ownership in a previous or subsequent period, and coverage adjustments for goods that are operationally leased.
Adjustments made to imports of goods include coverage adjustment for goods that are operationally leased, adjustments for reclassification of non-resident freight and insurance to transportation and insurance (these are removed from imports by deducting imports v.f.d. [value for duty] from imports c.i.f.), and timing adjustments for significant goods that enter New Zealand in one period but are known to have changed ownership in a previous or subsequent period. |
| Transportation | The main types of transportation services data collected are for the carriage of goods (freight) and passengers. Also included under transportation services are charters of carriers, tugboat services, airport and harbour fees, and goods consumed by carriers in the course of their operations, including bunkering and provisioning. These data are provided from quarterly and annual surveys of resident airlines and shipping companies, non-resident airlines (through their New Zealand offices), and New Zealand agents acting for non-resident ship operators. |
| Travel | Data on the expenditure of overseas tourists in New Zealand are derived from an international visitor’s survey, conducted by a marketing company for the Ministry of Tourism. In January 2003, the sampling of the International Visitor Survey changed to become ‘Flight based’. Flight based sampling is a non random method of sampling, allowing the specific targeting of passengers with certain characteristics that need to be represented in the sample of international visitors.
Data on the characteristics of passengers is generated from the departure cards of passengers on the same flights in the previous year. Where it is known that the sample needs to interview people with specific characteristics, interviewers approach passengers near the departure gate of flights known to carry passengers with these characteristics. The sample is selected from departing visitors at New Zealand’s three largest international airports; Auckland, Wellington and Christchurch. Estimates are also made for expenditure on education and health-related travel by non-residents.
The estimates for education-related travel are derived from a Survey of English Language Providers and Ministry of Education data. Health expenditure is derived from Crown Health Entity data.
Information on the expenditure of New Zealand residents travelling overseas is derived from a model that uses information obtained from a sample survey of returned New Zealand travellers (SORT). SORT was a two-year sample survey that began in the September 2002 quarter and ran until the quarter ended 30 June 2004. |
| Insurance | Data are obtained from quarterly surveys of resident insurers, agents, and brokers and from surveys of resident enterprises that place insurance directly with non-resident insurers. Life insurance is calculated by multiplying the total amount of insurance premiums exported or imported by the five-year average domestic service charge ratio. The average domestic service charge ratio is the ratio of the domestic insurance service charge to total domestic premiums (premiums paid to resident insurers), where the service charge is calculated as premiums minus claims. The domestic service charge is the service charge applied to all domestic resident insurers regardless of who/where their clients are.
Freight insurance is derived directly from the overseas merchandise trade statistics for imports from the total value of imports, and the imports service ratio is applied to the overseas merchandise trade exports statistics to calculate the freight insurance on exports of goods. |
| Government Current Transactions | These data are obtained from the records of government departments. The transactions include pension and benefit payments from the New Zealand government to other governments, in respect of New Zealand citizens living overseas, receipt of benefits and pensions from foreign governments for non-residents living in New Zealand, government foreign aid, and receipts of withholding tax from non-residents. |
| Other Services | Insurance. Data are obtained from quarterly surveys of resident insurers, agents, and brokers and from surveys of resident enterprises that place insurance directly with non-resident insurers. Life insurance is calculated by multiplying the total amount of insurance premiums exported or imported by the five-year average domestic service charge ratio. The average domestic service charge ratio is the ratio of the domestic insurance service charge to total domestic premiums (premiums paid to resident insurers), where the service charge is calculated as premiums minus claims. The domestic service charge is the service charge applied to all domestic resident insurers regardless of who/where their clients are.
Freight insurance is derived directly from the overseas merchandise trade statistics for imports from the total value of imports, and the imports service ratio is applied to the overseas merchandise trade exports statistics to calculate the freight insurance on exports of goods.
Other business. This item covers all services transactions not included elsewhere. Types of services covered include engineering, banking and financial, management accountancy, legal, consultancy, communication, advertising, and periodicals on individual subscription. Estimates are sourced from Statistics NZ’s quarterly sample survey of resident enterprises engaging in international services and royalty transactions. The quarterly survey has a sample size of approximately 700 enterprises.
Government, n.i.e. This item covers defence and diplomatic transactions where at least one party to the transaction is either the New Zealand government or a foreign government. The credit entries include estimates of sales of capital assets excluding land, estimated expenditure of foreign embassies in New Zealand, the portion of the New Zealand’s international aid spent in New Zealand, and the government’s receipts from immigration fees. Debit entries comprise the operational expenses of New Zealand’s embassies overseas and the costs of New Zealand’s defence forces stationed overseas. Government’s current transactions data are sourced from government departments and a 1999 benchmark survey of the expenditure of foreign embassies in New Zealand. |
| International Investment Income | Beginning from the June quarter 2000, the data for investment income are sourced from surveys introduced to collect financial account and international investment position data. The data collected in these surveys are based on the BPM5 guidelines. The data collected also enable the classification of investment income into direct, portfolio, and other investment income.
Direct investment. The direct investment threshold applied is 10 percent or more of the equity ownership in an enterprise at the individual investor level for both direct investment in New Zealand and New Zealand direct investment overseas. The income arising from direct investment includes dividends, retained earnings (and losses), earnings of branches, and net interest arising from lending and borrowing arrangements between the direct investor and the direct investment enterprise. Interest income is recorded on a mixture of debtor- and creditor-based accrual bases.
Portfolio investment. Portfolio investment income includes dividends and interest. Interest payments on New Zealand government bonds (debits) are estimated on a creditor-based accrual basis. Interest income receipts and payments for other sector are recorded on a mixture of debtor- and creditor-based accrual bases.
Other investment. Other investment income includes interest receipts and payments that do not fall within direct and portfolio investment income. It comprises interest on loans, deposits, trade credits, and other assets and liabilities between unrelated parties. Interest income is recorded on a mixture of creditor- and debtor-based accrual bases. |
| Current transfers | General government
These data are obtained from the records of government departments. The transactions include pension and benefit payments from the New Zealand government to other governments, in respect of New Zealand citizens living overseas, receipt of benefits and pensions from foreign governments for non-residents living in New Zealand, government foreign aid, and receipts of withholding tax from non-residents.
Other sectors
Transactions classified under this item include private sector foreign aid as well as gifts of cash. Private sector aid is derived from information collected by the Ministry of Foreign Affairs and trade, and supplemented by additional information provided by international aid organizations domiciled in New Zealand. The estimate for workers’ remittances abroad is based on a model that uses data from a pilot survey of immigrants to New Zealand.
The estimate for other sector transfers received is based on income data from the Household Economic Survey (HES), rated forward using movements in the exchange rate. The HES is run every three years and data on certain income items received from overseas are used as a benchmark for other sector current transfers. |
| Capital Account | Capital transfers
Capital transfers include migrants’ transfers, which are funds that immigrants bring with them to New Zealand and that emigrants take to other countries. The migrants' transfers data are derived from a data model. Migration data and information obtained from the New Zealand Immigration Service are used in the data model to estimate migrants’ transfers.
Acquisition/disposal of nonproduced, nonfinancial assets
Data on transactions in the ownership of copyright, patents, etc. are compiled from Statistics NZ's quarterly Survey of International Trade in Services and Royalties. |
| Financial Account | Beginning from the June quarter 2000, Statistics NZ moved its main financial account and international investment position data collection to a quarterly basis. At the same time, Statistics NZ introduced changes recommended in BPM5 to these collections.
The new collection known as the Quarterly International Investment Survey (QIIS) collects data on the international financial assets and liabilities of resident end-investors. The survey collects data on the opening and closing position in all international financial assets and liabilities, the transactions and other changes in position (price and exchange rate changes), and the investment income associated with claims and liabilities to non-residents.
Direct investment
The direct investment threshold applied is 10 percent or more of the equity ownership in an enterprise at the individual investor level for both direct investment in New Zealand and New Zealand direct investment overseas. The types of direct investment transactions included under this classification are changes in equity capital, unremitted earnings, and changes in long- and short-term capital. From the June 2000 quarter onwards, New Zealand has been compiling financial account data on a BPM5 basis. The 10 percent or more equity ownership criterion is applied for both inward and outward direct investment activity.
Portfolio investment
Portfolio investment comprises transactions in debt securities (bonds and notes, and money market instruments) and equities that are not classified as either direct investment or reserves. In New Zealand, the data on the stock and flow of portfolio investment are collected from a number of quarterly surveys. Data on the stock and flow of portfolio investment (assets and liabilities) are available by instrument and by sector.
Data on portfolio assets held abroad by New Zealanders are collected from the QIIS and the Quarterly Managed Funds Survey. Both surveys collect stock and transactions data (however, prior to March 2005 some transactions data from QIIS were estimated.
Liabilities data are sourced from the QIIS (equity and debt securities), the Quarterly Nominees Survey (for equity data), and a Monthly Nominee Company Survey run by the RBNZ (for debt securities data). The Quarterly Nominees Survey provides data on the stock of New Zealand shares held by non-residents in the custody of a resident nominee. From the Nominee Survey, transactions data are derived from the stock data using external information obtained from the stock exchange and nominee companies. Adjustments are made for price and exchange rate changes and are included in the IIP statement. The RBNZ’s Monthly Nominee Company Survey collects information on the non-resident holdings of debt securities issued by New Zealand residents.
Other investment
The main sources used to collect data on other investment are the QIIS and the Quarterly Managed Funds Survey. The QIIS collects data on both assets and liabilities, while the Managed Funds Survey collects only assets data. The stock and flow of other investment assets and liabilities data are available by sector. Information on the term to maturity profile is available for a significant portion of the stock of other investment assets and liabilities.
Other investment includes all financial transactions that are not included in direct investment, portfolio investment, or reserve assets. Included are other assets and liabilities, loans, currency and deposits, and trade credits between unrelated parties. |
| Reserves | Reserve assets comprise the financial claims on non-residents that are available to the RBNZ and the New Zealand Treasury. The principal holder of New Zealand’s reserves is the RBNZ. The data, which relate to transactions in reserve assets as opposed to changes in holdings, are obtained from RBNZ records.
Net errors and omissions (residual)
In practice, the BoP statement does not always balance. This is due to the variety of data sources used, the non-capture of some transactions, and the possibility of errors in reporting and compilation. In order to balance the accounts, a balancing item is used. This item is called the 'net errors and omissions', or the 'residual'. The residual is always entered on the credit side of the account. The residual can be calculated by one of two means: (1) the sum of all current, capital and financial account credits (inflows), less the sum of all the debits (outflows); or (2) the current account balance, plus the net flow of the capital and financial accounts. A positive entry means that the sum of the debits in the account is greater than the sum of the credits; a negative entry (negative credit) means that the sum of the debits is less than the sum of the credits. |
Contact Details
Liability
Statistics New Zealand gives no warranty that the information or data supplied contains no errors. However, all care and diligence has been used in processing, analysing and extracting the information. Statistics New Zealand shall not be liable for any loss or damage suffered by the customer consequent upon the use directly, or indirectly, of the information supplied in this product.
|
|