3. Data

The methodology uses two primary data sources from the Australian Bureau of Statistics (ABS).

  1. Household final consumption expenditure (HFCE)1 data retrieved from the quarterly and annual national accounts2 releases.
  2. GST data by household consumption category derived from the product details input-output (I-O) tables3.

Multiple data sources are required for this methodology due to the limited availability of the I-O tables. At the time of the analysis, the most recent instance of the I-O tables was released in March 2023 for the reference period of 2020-21, highlighting the significant time lag between the release and reference date of the I-O tables. In addition, there are historical time gaps in the release of historical I-O tables, for example, I-O tables were published for the reference year of 2009-10 but not subsequently published again until 2012-13. Effectively, these allow the use of six (6) I-O tables for this study over the years for the years 2015-16 to 2020-214. To infer information about GST revenue raised through household final consumption expenditure outside of the six years above, information from the I-O tables must be combined with other more timely data. In this paper, the I-O tables are integrated with household final consumption expenditure (HFCE) data that is available quarterly and annually from the ABS. By doing this, we show that the methodology introduced here can estimate GST revenue raised through household consumption over a wider timeframe than 2015-16 to 2020-21.

These data sources are integrated using ‘percentage GST-able’ estimators—that is, the percentage of household consumption subject to GST for each of the 17 broad household consumption categories (e.g. health and education). These estimators are derived over the period from 2015-16 to 2020-21 by dividing total GST (derived from I-O tables) by total consumption (derived from annual national accounts) by category5. Note that GST revenue by household consumption category is derived using the Input Output Product Classification (IOPC) to HFCE concordance, as the I-O tables are cut by IOPC category.

Once derived, these estimators can be applied to timely quarterly national accounts data by multiplying them with total consumption in a given period. This allows one to use 2015-16 to 2020-21 information to infer the amount of GST revenue collected by household consumption category at any point in time before 2015-16 and after 2020-21, e.g. the March 2023 quarter.

Footnotes

[1] This analysis does not account for ‘net expenditure overseas’ in the household consumption data. Net overseas expenditure is a balancing item in the household consumption data that adjusts for expenditure overseas minus expenditure by non-residents in Australia. Historically, net overseas expenditure has been small as a share of total consumption. Between 2000-01 and 2022-23 it averaged at just 1.6 per cent of annual total HFCE.
[2] ABS Cat No. 5204.0 and 5206.0.
[3] ABS Cat No. 5215.0.55.001.
[4] For a detailed explanation of the ABS methodology applied to input-output tables, refer to: Australian National Accounts: Input-Output Tables methodology, 2020-21 financial year.
[5] Minimal variation was found across each of the six financial years for the ‘percentage GST-able’ estimators across each category, indicating minimal distortions arising from the COVID-19 pandemic.

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