The new current account is very similar to the old current account except that it now excludes capital transfers.The largest items in the current account are exports and imports of goods-the difference between these is the The net result of all transactions recorded in the current account is the The balance on current account is equal to the imbalance between a country's level of national investment and its level of national saving.If a country's balance on current account is in surplus in a period, then national saving exceeds national investment and the country is a net provider of investment funds to the rest of the world. The financial account is the same as the old capital account. If, on the other hand, a country's balance on current account is in deficit in a period, then national investment exceeds national saving and the country is a net recipient of investment funds from the rest of the world.A current account deficit contributes to the level of foreign debt but the size of the deficit does not necessarily equate with a corresponding increase in debt. Each quarter the Australian Bureau of Statistics produces a record of economic transactions by Australian residents with the rest of the world. The new capital account has been created for the recording of capital transfers, such as the assets migrants bring with them into a country, previously included within the current account but more reasonably regarded as capital in nature. In practice however, some transactions are not measured accurately or not measured at all and balance between the accounts has to be achieved with the help of a balancing item. The main reason for this change was to improve the international comparability of Australia's statistics.Prior to September 1997, the balance of payments consisted of just two accounts-current account and capital account.
A common concern has been the rise in the current account deficit from between 2 and 3 per cent of GDP in the 1960s and 1970s to between 4 and 6 per cent of GDP in the 1980s and 1990s.Monthly Economic and Social Indicators Table 6.1 shows monthly data on the value of exports and imports.Table 6.2 shows quarterly data on the size of the balance on current account in both original and seasonally adjusted terms.Further information can be obtained by contacting a member of the Statistics Group, Information and Research Services, Department of the Parliamentary Library. The balancing item is shown outside the three accounts.In the September quarter 1997 the ABS began publishing Australia's balance of payments and international investment statistics on a new basis, consistent with the most recent international standards for these statistics. The new system comprises three accounts-current account, capital account and financial account. This means in theory that a deficit (or surplus) on the current account will always be offset by a surplus (or deficit) on the combined capital and financial accounts. For example, a current account deficit that was entirely financed by foreign equity investments would have no impact at all on the level of debt.The balance on current account is often shown as a percentage of gross domestic product (GDP) to show its significance relative to the whole economy and to allow for more appropriate comparisons to be made over time.Since 1959-60 Australia has had only one surplus on its current account and that was in 1972-73. Each quarter the Australian Bureau of Statistics produces a record of economic transactions by Australian residents with the rest of the world. The new capital account thus bears no relationship to the old capital account. This record is known as the Australian balance of payments.Under the double-entry system for recording all balance of payments transactions, the balance of payments always balances.