National Accounts - Income and Expenditure



National Accounts - Income and Expenditure


Statistics New Zealand


This annual release provides information about income, expenditure, and saving for the six sectors of the economy: non-financial businesses, financial businesses, general government, non-profit institutions serving households, households, and rest of the world. This replaces the Institutional Sector Accounts release.


These releases provide production, income and outlay, and capital accounts for six sectors of the economy: non-financial businesses, financial businesses, general government, non-profit institutions serving households, households, and rest of the world.

The detailed and inter-related information in this release will inform studies on the source and disposal of incomes, income distribution, the origin of savings, savings behaviour, capital investment and its financing, government expenditure, and taxation. It can be linked to other accounts, such as gross domestic product by industry and the balance of payments, to make informed economic and monetary policy decision.

This release replaces the Institutional Sector Accounts release, which was discontinued in November 2012. National Accounts (Income and Expenditure) includes additional years with provisional estimates for selected sectors and variables. It also includes the consolidated accounts of the nation, which record the incomes earned by various groups within the economy, their consumption and investment, and the economic relationship with the rest of the world.


4 Annual

Related Documentation

National Accounts - Income and Expenditure


National Accounts (Income and Expenditure) – information releases


National Accounts - past releases


Measuring capital stock in the New Zealand economy (published 2013)


Annual national accounts sources and methods


National accounts (income, saving, assets, and liabilities): March 2023 quarter




Actual collective consumption, Actual final consumption, Actual individual consumption, Balance on the external current account, Balance sheets, Capital account, Capital transfer, Central government enterprises, Change in inventories, Compensation of employees, Compensation of employees to/from the rest of the world, Consumption of fixed capital, Current transfers from the rest of the world, net, Disposable income, Entrepreneurial income, Exports of goods and services, Final consumption expenditure, Financial account, Gross domestic product, Gross fixed capital formation, Gross national disposable income, Gross national expenditure, Gross national income, Gross operating surplus, Imports of goods and services, Income and outlay account, Institutional sectors, Institutional unit, Intermediate consumption, Local government, Local government enterprises, Net saving – corporations, Net saving – households, Primary income, compensation of employees, gross operating surplus, entrepreneurial income, net taxes on production, property income, Private corporate producer enterprises, Private non-corporate producer enterprise, Private non-profit organisations serving households, Producer enterprises, Production account, Property income, Purchases of non-produced non-financial assets from the rest of the world, net saving, Secondary income, Services for own use, Statistical discrepancy, Subsidies, Tangible fixed assets, Tangible non-produced assets, Taxes on production and imports, Value added
Finance, Public Finance, Dissaving, Institutional, Sector, GDP, NPISH, Savings, Income, Outlay, Expenditure, Assets, GFKF, Production, Market, Non-market, Tax, Government, Consumption, Households, HHIO, non-profit, producer, financial, Imports, Exports, ROW, op-surp, GNI, GNDI, GNE, GFCF, Entrepreneurial
1987 -

National Accounts - Income and Expenditure

National Accounts - Income and Expenditure en-NZ
National Accounts - Income and Expenditure en-NZ



General information

Information about the tables

In New Zealand's national accounting system, data is presented as a set of self-balancing and interrelated accounts. These are: production, income and outlay, capital, financial, reconciliation accounts, and balance sheets. We have not yet developed financial accounts, reconciliation accounts, or balance sheets, but have started a project to progressively fill these gaps in the system of accounts by 2021.

For each sector, or the economy as a whole, the following accounts are compiled.

Production account

The production account records the current value of goods and services produced and the costs associated with their production. Value added is the sum of all production (output) less the consumption of intermediate goods and services in the production process. The production of all resident institutional sectors sums to national production (or gross domestic product).

Gross domestic product and expenditure on gross domestic product

Gross domestic product (GDP) is a measure of the value added from all economic activity in New Zealand. This account shows the main forms of income generated by the economy and the categories of final expenditure on GDP.

Income and outlay account

This account shows the income received from the various factors of production and how this income is either redistributed or used for final consumption expenditure across the sectors. The balancing item is national saving, which is a major source of finance for investment in assets or for reducing financial liabilities.

Capital account

The capital account records net capital transfers, consumption of fixed capital (depreciation), and net purchases of non-financial assets, inventories, and fixed assets. It also shows whether capital expenditure is financed from saving generated within the current period or from borrowing. The balancing item is net lending.

External account

This account brings together all transactions with the rest of the world and is in two parts: current and capital. The current account records receipts and disbursements for merchandise trade, services, international investment income, and transfers, while the capital account introduces net capital transfers. The residual records New Zealand’s net lending/borrowing with the rest of the world. The items in this account are derived from the overseas balance of payments statistics.

Within any sector, these three accounts share variables. The production account is linked to the income and outlay account through value added, which represents the income available to distribute. The income and outlay account is linked to the capital account through saving, which is the total amount available to invest or retain for future use. The capital account is linked to the production account through consumption of fixed capital in the production process.

Institutional sectors

The institutional sectors are consistent with the Statistical Classification for Institutional Sectors (SCIS) and control classification. The institutional sector tables are combined as follows:

2.1 Non-financial business enterprises 111, 121, and 131 1,2,3, and 4
2.2 Corporate business enterprises 111 1 and 2
2.3 Non-corporate business enterprises 121 1 and 2
2.4 Corporate business enterprises, central government control 111 3
2.5 Corporate business enterprises, local government control 111 4
2.6 Non-profit business enterprises 131 1,2,3, and 4
2.7 Financial business enterprises 211, 221, 222, 231, 241, 251, 261, 271, and 281 1,2,3, and 4
2.8 General government institutions 311, 312, and 321 3 and 4
2.9 Central government institutions 311 and 312 3
2.10 Local government institutions 321 4
2.11 Non-profit institutions serving households 411 and 421 1,2,3, and 4
2.12 Household sector accounts 511 1
2.13 Household final consumption expenditure 511 1
2.14 Rest of world 611 2

Summary analysis tables by institutional sector

The summary analysis tables are a re-expression of the sector tables. They bring together the aggregated flows for each sector and highlight the links between the sector accounts and the consolidated national accounts.

The tables include the ‘rest of the world’ sector, presented from the viewpoint of an overseas resident. Interest paid, for example, is shown as a positive amount representing interest earned by overseas enterprises from investment in New Zealand. Similarly, in most years net lending with the rest of the world is shown as a positive total. This reflects that the rest of the world is a net lender to New Zealand.

Factor income

The production account section of the tables distinguishes current transactions beginning with factor incomes generated from the production of goods and services. GDP equals the sum of factor incomes plus consumption of fixed capital (which is recorded in the capital account).

Income and outlay

This section of the tables summarises transactions related to the redistribution of the factor incomes.

All expenditure transactions in the table (subsidies paid by government, inter-sector transfer payments, consumption, balance on external goods and services, and capital accumulation) are presented as negative entries. Therefore, saving or net lending can be computed simply by adding all the component transactions that appear in the ‘factor income’ and ‘income and outlay’ sections. For some variables, the receipts and payments have been presented in the same row, usually for variables where the inter-sector flows are in one direction. For example, the ‘income tax’ row has government receiving income tax (positive entry), while the other domestic sectors are paying income tax to the government sector (negative entries).

Expenditure and saving

Current transactions relate to final demand (consumption and balance on external goods and services). The balance on external goods and services is exports of goods and services less imports of goods and services. Gross domestic expenditure equals consumption and the balance on external goods and services plus net investment on fixed assets and inventories, recorded in the capital account. Saving is the residual item.

Capital account

The capital account summarises capital transactions, presenting the sources of funding followed by the various types of capital accumulation. Net lending is the residual item.

The concepts of saving and net worth

Saving is estimated as the residual between total income and outlay components. Income and expenditure estimates (including interest and dividend flows) are reconciled within the institutional sector framework.

If we produced the full set of institutional accounts, including balance sheets, we would be able to derive an estimate of net worth. Net worth is, for example, the market value of a sector’s stock of assets less the market value of its stock of liabilities (capital gains). Wealth estimates are outside the current scope of the institutional sector accounts.

Saving excludes the following items that affect net worth: -capital gains (or holding gains), which reflect changes in the prices of existing assets and therefore do not represent additions to real stock of produced assets -capital transfers, which reflect changes in ownership of existing assets -events such as the Canterbury earthquakes, which result in changes in the real stock of existing assets but do not reflect an economic transaction.

An example of how household sector saving (as measured in this release) differs from the change in net worth is illustrated as follows. An increase in the value of the owner-occupied housing stock is included in measures of household net worth but not included in household saving. However, increases in mortgage interest payments related to increases in housing values do affect (reduce) household saving.

This means that measuring saving as a flow measure (income not spent) or net worth as a stock measure (change in net worth) are not competing methodologies. Instead, the key objective should be to reconcile them in a full set of accounts.

Methodology for compiling the accounts

The income and expenditure accounts are compiled by transaction (flows). Each transaction is allocated to sectors separately, and then full-sector accounts are compiled.

Business surveys and administrative data are the principal data sources for most transactions in the national accounts statistics. Business surveys, such as the Annual Enterprise Survey, collect information on financial flows and productive activity. We supplement our surveys and administrative data with data from other sources (eg Reserve Bank data is used to estimate household interest flows).

Large financial flows are reconciled as far as possible at the enterprise level. For example, large dividends paid by New Zealand-resident enterprises in the balance of payments statistics are checked against dividends paid recorded in business surveys. Large inter-company flows are also cross-checked. Where the data sources are inconsistent, other sources (including annual reports) are consulted, and the source data is then adjusted. By this reconciliation process the gap between national totals for transactions (such as interest paid and interest received) are brought close together. A final adjustment is made to match the flows exactly.

In general, gross data is recorded. Even between institutional units within the same sub-sector, receipts are not netted off payments, and vice versa. Where inter-company financial flows are recorded in unconsolidated form, level shifts in some series can occur that are entirely due to the inter-company flows. An example of this would be a company receiving a dividend from a subsidiary, then passing on the same dividend to an overseas parent company. In the accounts such a dividend is effectively recorded several times: paid by the subsidiary and the company, and received by the company and the rest of world, respectively. For large dividends, payments have been matched against receipts, and the accounts are correct on a grossed up basis.

Interpretation of Household Economic Survey (HES) data and the national accounts

The HES and annual national accounts releases provide insights into the New Zealand household sector. HES is a specific survey designed to measure household income and spending. It is not designed to measure saving. It also provides information on how income and expenditure is distributed within the household sector.

The national accounts statistics present a broader measure of household income and expenditure, which is consistent with other macro-economic statistics. The household sector in the national accounts is consistent with government and business sector information and is the official measure of New Zealand's household saving.

HES is one of many statistics used to compile the national accounts statistics. There are differences in coverage, timing, and measures between these two statistics. For example, imputed rent (to account for people living in the dwellings they own) is included in the national accounts household sector but is outside the scope of the HES.

Standard treatments concepts

Capital gains and losses

Capital gains and losses associated with holding or trading capital and financial assets are recorded in reconciliation accounts. Therefore, these gains/losses are excluded from the concept of saving.

Owner-occupied dwellings

Ownership of owner-occupied dwellings is a market activity undertaken by households. Both gross fixed capital formation and intermediate consumption are excluded from final consumption expenditure. This is because expenditure associated with purchasing of owner-occupied dwellings is classified as gross fixed capital formation, and expenditure on ordinary repairs and maintenance is classified as intermediate consumption. Payment of imputed rent by owner-occupiers is included in final consumption expenditure. This measures an income flow back to households, valued at market rates.

Consumption of fixed capital (depreciation) is recorded separately in the household capital account. Consequently, the saving residual in the household income and outlay account is net of depreciation on owner-occupied dwellings.

Pension and social security schemes

According to the New Zealand System of National Accounts, income for life insurance, superannuation, and pension schemes are imputed. Employer contributions to these schemes are part of an individual’s income. Since the accumulated pension and superannuation funds are regarded as household assets, interest earned by the funds is included in household income. To avoid double-counting this income, actual pension payments are treated as a rundown in assets. Internationally, there may be differences in where the line is drawn between funded social security schemes (not classified as part of private saving) and funded pension schemes (usually for state employees). The estimates do not include income earned by New Zealand residents’ investment in overseas pension funds, due to the difficulty of measurement.

Insurance premiums and pension-fund contributions

Only the service or administration charge component of insurance premiums and pension-fund contributions paid by households is treated as final consumption expenditure. The balance is treated as a transfer payment and classified as secondary income payable.

Special features of New Zealand data and methods

Keep in mind the following features of New Zealand's business, tax, and historical context when viewing these accounts.

Relationship between non-corporate businesses and households

The relationship between households and businesses, especially small, owner-operated businesses, may be blurred in many ways. Household owners of businesses may hold property through years of losses, expecting capital gains at sale. Business debts may be held within the household sector rather than the business sector. Some final consumption of households that operate farms may be reported as business (farm) expenses.

Statistics NZ classifies non-corporate enterprises to the producer (business) sector. Only the net entrepreneurial income from the business is included as a profit transfer in the household account – no retained earnings (saving) of non-corporate businesses are included in the producer sector. The total net earnings are recorded as being transferred to the household owners, where they mix with other sources of household income before income tax is assessed. While every effort is made to ensure that business-related expenses are excluded from household consumption expenditure, any that remain will overstate household outlays.

Since household owners withdraw all net current income from non-corporate businesses, any actual retained earnings of these businesses has to be shown as a capital contribution from householders. Consequently, household saving is also a source of finance for capital accumulation in the non-corporate producers sector. Net lending for the household sector therefore reflects the lending to the non-corporate businesses they own.

The exception to this occurs where households with rental property businesses hold property through years of losses, expecting capital gains when they sell. This is the reason negative saving is recorded in the non-corporate producers sector.

Dividend imputation credits

As dividend imputation credits are essentially a tax credit, dividends are estimated net of these credits.

Future development of methodology

Future methodological changes may cause revisions to the institutional sector accounts. The following areas warrant further investigation. While investigation is underway we expect to address these and potentially other issues in the future.

Trust income

Family trusts are a popular means of holding productive real and financial assets. In the national accounts, family trusts, as the owners of ‘household’ assets, are classified to the household sector. Income earned by the trust is included in household income. However, the different forms of asset ownership possible are quite complex, as are the ways in which the relevant trust flows might be captured in the source data used to compile the accounts. Trust income (especially beneficiary income) is recorded in household income. In principle, some may be recorded in the producer sector. Inland Revenue statistics suggest that this component of trustee income has increased significantly in recent years.

Retained earnings

Under New Zealand law, qualifying companies (by treating the company and its shareholders as one entity as much as possible for income tax purposes) allow a number of tax benefits. Analysis suggests that after changes to the top personal income tax rate in 2000, a greater proportion of earnings were retained within these companies rather than paid out to the working proprietors (as entrepreneurial withdrawals). This is reflected in the institutional sector accounts, where the retained earnings of corporations are not reported as household income. Given that the working proprietor has ready access to the retained earnings of the company, saving recorded in the household income and outlay account was lower than it might be without this particular tax law.


Additional analysis of transfers may include a further review of government internal transfers, as these do not always net out.

More information

Statistics in this release have been produced in accordance with the TitleOfficial Statistics System principles and protocols for producers of Tier 1 statistics for quality. They conform to the Statistics NZ Methodological Standard for Reporting of Data Quality.


While all care and diligence has been used in processing, analysing, and extracting data and information in this publication, Statistics NZ gives no warranty it is error-free and will not be liable for any loss or damage suffered by the use directly, or indirectly, of the information in this publication.


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