National Income Estimates

The first recorded estimates for New Zealand were those made at the turn of the century by T. A. Loghlan, the Government Statistician of New South Wales. His estimates were based mainly on income-tax data and were restricted to a measure of private, rather than national, income. In the world history of national accounting, Loghlan's estimates for the Australian States stand as the first official estimates of a nation's income. Loghlan's estimate for New Zealand in 1901–02 was £364 million. Official estimating began in New Zealand with an estimate for the 1925–26 March year of an aggregate private income of £136 million. This estimate was published in the 1932 Official Yearbook. About this time and in the following years several attempts of measurement of national income were made by private economists, including an exhaustive series of estimates by F. B. Stephens.

Official publication of national income estimates on the present pattern began in 1948 and has continued annually since then, and covers the period from 1938–39 up to the present day. From a total of £2149 million in 1938–39, national income has increased at a fairly steady rate of growth to £1,466 million in 1963–64. This growth is at an average annual rate during the period of over 8 per cent in money terms.

In New Zealand national income is measured in the prices obtaining in the year of measurement. During periods of inflation national income will thus tend to rise even if there is no change in the real value or quantity of goods and services produced.

The period covered by the national income estimates has been one of fairly general inflation, with an average rate of increase of 4 per cent per annum in retail prices and of nearly 5 per cent per annum in wholesale prices. Consequently, not all of the 8 per cent per annum growth in national income can be regarded as real, for a substantial part is an inflationary illusion. There are no official estimates of increases in real national income, but studies made suggest that the rate of increase in real national income in the decade 1950–59 lies somewhere between 3 and 4 per cent per annum. A further assessment which can be made is to adjust the total for population change and derive a figure for real national income per head. The steady increase in population over the period means that growth in real national income per head will be lower than that in the range above.

The main totals of the national income estimates for 1963–64 are given in the following table:

As well as measuring total production in terms of the incomes of the factors which generated it, or in terms of how it was used, it can be classified according to the various sectors of the economy in which the income was generated.

In 1954–55 various sector contributions to net national output were: