Transcript General government (and other non-market producers)

General government (and other nonmarket producers) assets: cost of
capital services
Anne Harrison
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Precision
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Excludes government asset used in market
production
Includes assets used in other non-market production
Measuring the contribution of non-financial
assets to non-market production
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1993 SNA
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Zero net operating surplus for non-market producers
Implies no return to capital used in non-market
production
Implies inconsistency in capital services rendered by
similar asset used in market and non-market
production
Implies different values for similar assets after initial
purchase or different values of consumption of fixed
capital
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Proposal
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Treat similar assets as providing similar services
regardless of the nature of production
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(Note this was nearly accepted in 1993 SNA looked
as opportunity cost of capital)
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Consider four types of assets
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First type of asset
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Assets used by civil servants in course of their work
eg computer, vehicle, building
Determining capital service/ return to capital/
consumption of fixed capital straightforward
First priority
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Second type of asset
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Assets bringing benefits to the economy at large eg
roads and other infrastructure
May be unique products so valuation may be more
difficult that first type but valuation is needed for
calculation of consumption of fixed capital
Second priority
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Third type of asset
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Used by the community at large eg recreational areas
such as city parks, monuments
May be difficult to place a value on these
Lower priority to estimate
May be infeasible (but then where do consumption of
fixed capital estimates come from?)
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Fourth type of asset
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Land
– Produced
– Non-produced
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Do we have separate information on this?
General considerations as for third type of asset
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Implications
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Changes GDP
Approximately 1 to 2 per cent of GDP in Australia and
US
May not change growth rates
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Feasibility – discussed above
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