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Tuesday, 2 October 1984
Page: 1051
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Senator Walsh —On 15 June 1984 (Hansard, page 3129) Senator Robert Ray asked me, as Minister representing the Treasurer, a question without notice concerning the effects of sale-leaseback transactions on estimates of fixed investment by business. In the course of my answer I undertook to refer the question to the Treasurer for a more definitive answer. The Treasurer has supplied the following information:

The national accounts attribute gross fixed capital expenditure to sectors on the basis of legal ownership, a basis consistent with existing Australian accounting practices.

The attached table provides information on major sales of fixed assets from the public sector to the private sector. Because the vast majority of these sales are associated with leaseback or similar financing arrangements these data can be used to partially adjust capital expenditure estimates from sector of legal ownership (usually the financial sector) to sector of effective ownership. That is, these adjustments are designed to take account of situations where the legal owner does not bear the risks and benefits normally associated with ownership.

The adjustments do not, however, take into account all arrangements under which assets owned by the private sector are effectively controlled by the public sector, e.g. leasing transactions not involving a sale from the public sector to the private sector. It should also be noted that adjustments reclassifying private and public expenditure result in expenditure estimates inconsistent with estimates of gross operating surplus and other income aggregates in the sector accounts, as information is not available to make income estimates other than on the basis of legal ownership.

The September issue of the Treasury Round-up of Economic Statistics contains estimates of private business fixed investment adjusted for the known sale/ leaseback transactions presented in the attached table.

MAJOR SALES OF FIXED ASSETS FROM THE PUBLIC SECTOR TO THE PRIVATE SECTOR ( EXCLUDING DWELLINGS)

Non dwelling

construction Equipment Total

$m $m $m 1980-81 . . 185 185 1981-82 81 1,216 1,297 1982-83 98 851 949 1983- 84 151 1,120 1,271

1982-

September n.a. n.a. 117 December n.a. n.a. 208

1983-

March n.a. n.a. 367 June n.a. n.a. 257 September n.a. n.a. 104 December n .a. n.a. 523

1984-

March n.a. n.a. 110 June n.a. n.a. 534

Source: ABS Cat. No. 5206.0

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Senator Button —On 24 August 1984 (Hansard, page 367) Senator Dame Margaret Guilfoyle asked me, as Minister representing the Minister for Employment and Industrial Relations, the following question without notice concerning average weekly earnings:

In an interview on Nationwide on Budget night the Treasurer said that the increase in average weekly earnings basically reflected overtime and that we have nothing in there for wages drift. Is the Minister able to provide or obtain information which analyses the average weekly earnings figure to show the amounts related to full time award wages, over-award payments, overtime and the effect of part time work on average weekly earnings figures? Is the Minister further able to advise with regard to the 160,000 jobs which he mentioned yesterday as to whether he was referring to part time of full time employment?

The Minister for Employment and Industrial Relations has provided the following information in reply to the honourable senator's question:

Average weekly earnings (AWE) are derived by dividing estimates of weekly total earnings by estimates of employment. Movements over time in the series can consequently be influenced by one or all of the following factors:

Changes in the proportion of part time compared to full time employees;

Changes in the proportion of junior compared to adult employees;

Changes in the ratio of males to females in employment;

Changes in the number of overtime hours worked;

Variations in over-award rates of pay;

Other compositional changes in the employed labour force.

Average weekly ordinary time earnings (AWOTE) of full time employees, disaggregated by sex, refers to that part of weekly total earnings attributable to award, standard or agreed hours of work. It avoids the influence of the first four factors affecting the AWE series. The AWOTE series is still, however, influenced by changes beyond those in award and over-award payments. Other compositional changes in the workforce can alter the relative number of high and low wage and salary earners and thus alter the growth of AWOTE. These compositional changes include:

changes in the share of employment accounted for by low wage earners, say due to last in/first out retrenchment practices in a recession;

variations in the occupational composition of the employed labour force;

variations in the industry composition of the employed labour force;

variations in the incidence of short-time working; and

changes in the seniority or length of experience of the employed labour force affecting the extent of proficiency allowances and annual increments made.

Data do not exist to quantify the influence of these other compositional changes. It is thus not possible to make meaningful estimates of the extent of ' wage drift' by comparing growth in award rates of pay with growth in AWOTE for males and females. The most recent data must be treated with care due to the change in the survey base for AWE and AWOTE. As noted on page 30 of Budget Statement No. 2, this may have made estimates for the two halves of 1983-84 not fully comparable. It is also important to note that AWE and AWOTE data are subject to sampling error which implies that growth estimates can only be interpreted as falling within a certain range, making inferences regarding wage drift even more uncertain.

While it is not possible to determine the amount of wage drift on the basis of the AWE and AWOTE figures, impressionistic information from the regional offices of the Department of Employment and Industrial Relations suggests that little drift exists. Data from the National Accounts, which can also be affected by compositional change but provide some cross check on the AWE series when adjusted for employment growth, suggest that earnings have risen at much the same rate as award wages since the introduction of the new wage fixation principles.

The estimated 160,000 jobs to be created over the course of 1984-85 refers to total employment.

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