Download OECD National Accounts Experts` Meeting, 8 October 2003 Session

OECD National Accounts
Experts’ Meeting
Session on General
government accounts
8 October 2003
The Italian General government
sector: size, boundaries,
methods of classification and
recent issues
ISTAT
Daniela Collesi
Deborah Guerrucci
Federico Nusperli
[email protected]
 THE SIZE OF GENERAL GOVERNMENT IN ITALY
 GENERAL GOVERNMENT AND ITS SUBSECTORS AS REFERENCE FOR
PUBLIC POLICIES
 THE S.13 ARCHIVE AND STANDARD ISSUES
 THE ORGANISATION OF GG
 INTRODUCTION OF ESA95 AND THE REDEFINITION OF THE GENERAL
GOVERNMENT SECTOR S.13
 THE MAIN SOURCES AND THE DATABASE OF GENERAL
GOVERNMENT SECTOR S.13
 RECENT MEASURES CONCERNING GENERAL GOVERNMENT
SECTOR: CLASSIFICATION ISSUES
NA offer a common basis of reference for international
comparisons, a set of technical means of classification
standards, identification on the statistical units and
transactions
GG not widely accepted in a juridical contest also if it is
used as a reference
GG sector is comparable only in the
economic meaning
THE SIZE OF GENERAL GOVERNMENT IN ITALY
 General government accounts in Italy for more than 12.5 % of GDP (as
GG value added) from 1995
Figure 1 - General government Value added (ratio to GDP)
THE SIZE OF GENERAL GOVERNMENT IN ITALY
 Net lending/Net borrowing
Figure 2 – General government Net borrowing (ratio to GDP)
-14,00
-12,00
-10,00
-8,00
-6,00
-4,00
-2,00
1980
-
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
THE SIZE OF GENERAL GOVERNMENT IN ITALY
 The two components, and their further analysis:
1. total expenditures
Figure 3 – Public expenditure by its main components (ratio to GDP)
THE SIZE OF GENERAL GOVERNMENT IN ITALY
 The two components, and their further analysis:
2. total revenues
Figure 4 – Public revenue by its main components (ratio to GDP)
THE SIZE OF GENERAL GOVERNMENT IN ITALY

ESA95 Questionnaire

Table 2 Main aggregates of GG

Table 9 Detailed Tax and Social Contribution Receipts by Type
of Tax or Social Contribution and Receiving Subsector

Table 11 Expenditure of General government by functions
GENERAL GOVERNMENT AND ITS SUBSECTORS AS
REFERENCE FOR PUBLIC POLICIES
The Italian General government sector, according to NA,
is a broadly accepted concept. Public finance
documents assume GG as the reference sector to
measure public finance objectives
The list S.13 is shared between Istat and the Ministry of
Economy
Also if ESA95 has been introduced in Italy, it still remain
hard to apply because of some differences with the public
law
GENERAL GOVERNMENT AND ITS SUBSECTORS AS
REFERENCE FOR PUBLIC POLICIES
The direction followed by Government to pursue its functions:

directly engaging them

delegating to other institutional sectors simply
maintaining the regulation activity
GENERAL GOVERNMENT AND ITS SUBSECTORS AS
REFERENCE FOR PUBLIC POLICIES
 The transition in the provision of public services between the central level of
government and the local one
Figure 5 – GG Final consumption expenditure by subsector (millions
euros)
250.000
200.000
150.000
Social Security f unds
Local Government
Central Government
100.000
50.000
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
GENERAL GOVERNMENT AND ITS SUBSECTORS AS
REFERENCE FOR PUBLIC POLICIES
 Total expenditure between the three subsectors. The relative size of Central
government is decreasing in favour of Local governments and Social security funds
Figure 6 – GG Total expenditure by subsector (millions euros)
700.000
600.000
500.000
400.000
Social securit y f unds
Local government
Cent ral government
300.000
200.000
100.000
-
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
GENERAL GOVERNMENT AND ITS SUBSECTORS AS
REFERENCE FOR PUBLIC POLICIES

The increasing share of revenues for local government
Figure 7 – GG Total revenues by subsector (millions euros)
600.000
500.000
400.000
300.000
Social
securit y
f unds
Local
government
200.000
Cent ral
government
100.000
19 8 0
19 8 1 19 8 2
19 8 3 19 8 4 19 8 5 19 8 6
19 8 7 19 8 8 19 8 9 19 9 0
19 9 1 19 9 2 19 9 3 19 9 4 19 9 5
19 9 6 19 9 7 19 9 8 19 9 9
2000 2001 2002
THE S.13 ARCHIVE AND STANDARD ISSUES
GG sector according to ESA95 used for the Yearbook of GG sectors
S.13 list represents an important tool for uses such as:
 the customers classification
into institutional sectors for the
banking system (functional for
the classification of financial
accounts)
 the classification of transfers
performed by government units
by beneficiary sector that
should
be
used
when
analysing flows to build the
economic accounts
THE S.13 ARCHIVE AND STANDARD ISSUES
One of the major effort in compiling the accounts is
standardisation of sources
A special effort towards standardisation regards the compilation of data
for the State
According to the most recent law, the economic and functional
classifications should be in virtually complete conformity with the NA
criteria for the GG accounts:
» Functional classification from 1999
» Economic classification from 2000
The new functional classification is integrated with the COFOG with a
fourth level for more detailed analysis
Also for the Regions the classifications used should be in conformity with
the NA criteria
THE ORGANISATION OF GG
General government has a three level subsector structure
defined by using ESA 95:
S.1311 Central government
S.1313 Local government
S.1314 Social security funds
THE ORGANISATION OF GG
Table 1 - GENERAL GOVERNMENT SECTOR (S.13)
Code
Type of institutional unit
A
B
C
D
E
F
G
H
I
L
M
N
O
P
Q
R
S
T
U
V
Z
X
Y
W
J
K
MINISTERIES
COSTITUTIONAL BODIES
ECONOMIC ACTIVITIES REGULATION BODIES
ECONOMIC SERVICES PRODUCERS
INDIPENDENT ADMINISTRATIVE BODIES
ASSOCIATIVE STRUCTURE BODIES
CULTURAL SERVICES PRODUCERS
OTHER BODIES
RESEARCH BODIES
EXPERIMENTAL RESEARCH BODIES
REGIONS AND AUTHONOMOUS PROVINCES
PROVINCES
MUNICIPALITIES
LOCAL HEALTH UNITS
HOSPITAL BODIES
CHAMBERS OF COMMERCE
TOURISM BODIES
HARBOURS BODIES
MOUNTAINS DEVELOPMENT BODIES
REGIONAL DEVELOPMENT BODIES
UNIVERSITIES
UNIVERSITIES STUDIES AIDING BODIES
CONCERT AND SIMILAR BODIES
PARK BODIES
REGIONAL BODIES FOR RESEARCH AND ENVIROMENT
SOCIAL SECURITY FUNDS
Subsector
Central government
Central government
Central government
Central government
Central government
Central government
Central government
Central government
Central government
Central government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Social security funds
THE ORGANISATION OF GG
Table 2 - General government by number of institutional units and employees
Type of institutional units by subsector
Central Government
Ministeries
Costitutional bodies
Economic activities regulation bodies
Economic services producers
Indipendent administrative bodies
Associative structure bodies
Cultural services producers
Other bodies
Research bodies
Experimental research bodies
Local government
Regions and authonomous provinces
Provinces
Municipalities
Local health units
Hospital bodies
Chambers of commerce
Tourism bodies
Harbours bodies
Mountains development bodies
Regional development bodies
Universities
Universities studies aiding bodies
Concert and similar bodies
Park bodies
Regional bodies for research and enviroment
Social security funds
Social security funds
Total
Institutional units Percentage distribution of
employees
196
19
7
6
13
6
5
60
2
36
42
9.352
22
100
8.103
197
123
102
120
20
355
15
19
58
13
73
32
25
25
9.573
%
%
2
0,2
0,1
0,1
0,1
0,1
0,1
0,6
…
0,4
0,4
97,7
0,2
1
84,6
2,1
1,3
1,1
1,3
0,2
3,7
0,2
0,2
0,6
0,1
0,8
0,3
0,3
0,3
100
53,7
52,1
0,2
…
0,3
…
…
0,1
0,1
0,6
0,1
44,6
2,9
1,9
15,4
13,1
7
0,3
0,1
…
0,2
0,1
…
0,1
0,1
3,3
0,1
1,7
1,7
100
INTRODUCTION OF ESA95 AND THE REDEFINITION OF THE
GENERAL GOVERNMENT SECTOR S.13
Check of the ESA79 list to move to ESA95
Exclusion of some bodies:
 the 50% criterion
 the control by GG sector
 the financing by GG sector
 for social security funds: control on management of
the institution and compulsory participation for certain
group of population
INTRODUCTION OF ESA95 AND THE REDEFINITION OF THE
GENERAL GOVERNMENT SECTOR S.13
The institutions included in the sector S.13 are characterised by:
 the nature of “institutional unit”
 the institutional classification:
a. according to a juridical approach, an institution is public if the
Italian legislation defines the unit “public” because it has a public
purpose
b. according to an economic approach, an institution is included in the
GG sector if it satisfies the ESA95 rules
Two groups:
1. the public institution sector;
2. the GG sector (S.13)
Some units which are public for the public law aren’t included in S.13
Some units which are private for the public law are included in S.13
THE MAIN SOURCES AND THE DATABASE OF
GENERAL GOVERNMENT SECTOR S.13
Sources used may be statistical surveys or administrative sources
Table 3 - General government: sources used for the compilation of the accounts
STATISTICAL SURVEYS
Source
Body observed
ADMINISTRATIVE SOURCES
Source
Body observed
ASL and AO
Ministry of health
Social security funds
Ministry of Economy
Social security funds
Regions
Municipalities
Municipalities
Provinces
Chambers of commerce
ISTAT
ISTAT
ISTAT
ISTAT
State
State sector
State receipts
Regions
Regions' receipts
Municipalities
Ministry of Economy
Ministry of Economy
Ministry of Economy
Ministry of Economy
Ministry of Economy
Ministry of Economy
APT
ISTAT
Municipalities' receipts
Ministry of Economy
EDISU
Universities
Other bodies
ISTAT
ISTAT
ISTAT
Ministry of Economy
Provinces
Ministry of Economy
Provinces' receipts
Chambers of commerce Ministry of Economy
Ministry of Interior
Ministry of Interior
Mountain communities
Ministry of Economy
Universities
Other bodies
Ministry of Economy
Ministry of Economy
THE MAIN SOURCES AND THE DATABASE OF
GENERAL GOVERNMENT SECTOR S.13
The micro-database provides basic information on the various
institutions, some quantitative and some relating to other features of
the units:
 value of NA economic transactions according to COFOG classification
 non-monetary variables such as geographical area, number of local
units and legal form
 information on employment, such as the number of employees by
economic activity according to ATECO classification
THE MAIN SOURCES AND
THE DATABASE OF
GENERAL GOVERNMENT
SECTOR S.13
Institutional unit
NO
S14 Households
(consumers)
Is it productive?
YES
NO
S14 Households (producers) or S11
Non financial corporations or
S12 Financial corporations or
S15 Non profit institutions or
serving households
Is it controlled by GG units?
Figure 8 - Classification
of the instituional units:
decisional tree
YES
NO
S11 Non financial corporations or
S12 Financial corporations
Is it a non market unit?
(50% criterion)
YES
Is it a non profit institutions
serving households?
NO
S13 General Government
YES
YES
Is it mainly financed
by GG units?
NO
S15 Non profit institutions
serving households
MEASURES CONCERNING THE GENERAL GOVERNMENT
SECTOR: CLASSIFICATION ISSUES
The different kinds of measures :
a. creation of new units with specific tasks, classified inside
General government sector (S.13)
b. restructuring of existing General government units
c. creation of new public units to be classified outside
sector S.13
d. restructuring of existing General government units
e. transfer of competencies from General government
institutions to private units
MEASURES CONCERNING THE GENERAL GOVERNMENT
SECTOR: CLASSIFICATION ISSUES
The main elements that must be taken into account :
a. the degree of public control over the new or
restructured institutions
b. the characteristics of their activity and of the
transactions in which they are involved
c. the possible assumption by General government of
some risks borne by the new or restructured institutions
The creation of Patrimonio Spa and Infrastrutture SpA
On June 2002 a State law established the creation of two
joint-stock companies. Both were 100% public owned:
Patrimonio SpA directly by the State, Infrastrutture SpA by
the Cassa Depositi e Prestiti
The objective of Patrimonio SpA would have been the
increase of value, the management and, in some cases,
the sale of the assets included in the State balance sheet
The creation of Patrimonio Spa and Infrastrutture SpA
The first task of Infrastrutture Spa will be the financing of
TAV SpA, Italian High-Speed Railway lines
The receipts of the issuance will be transferred to TAV that
will repay its debt with the income deriving from the tolls,
possibly supplemented by a State additional contribution
This kind of operations does not provide for any, even
theoretical, State intervention
The creation of Patrimonio Spa and Infrastrutture SpA
According to the available information ISTAT has decided to classify
Infrastrutture SpA in the S.12 sector, as a Financial Intermediary,
Patrimonio SpA in the S.13 sector, as a Central Government Institution
The rationale of this decision is the following:
a. The two companies are public producers as they are fully
controlled by General government units
b. The main activity of Infrastrutture SpA is financial intermediation, so
the sector is Financial Corporation sector irrespective of its costs
and revenues (ESA95 Manual on government deficit and debt,
§I.1.3)
c. Patrimonio Spa has to be classified according the result of ESA95
50% rule. At present, considering that production costs include the
Consumption of fixed capital that is very relevant, because of the
relevant value of the assets that have been transferred to the
company, the classification into General government sector is the
most suitable
The transformation of ANAS into a joint-stock company
The Italian Financial Act for 2003 established that ANAS had to be
transformed into a joint-stock company
The main changes in ANAS activity will be:
a. a different risk exposure as the State guarantee on ANAS liabilities
will be removed
b. the tranfer of the roads’ ownership from the State to ANAS
c. the necessity to operate in a competition market
d. the need to increase the return of the activity both improving the
efficiency of the core business and diversifying the sources of
income
The transformation of ANAS into a joint-stock company
It has been announced that:
 tolls will be introduced in some of the roads managed by ANAS, that
are currently free of charge
 any income deriving from the use of the roads will be fixed according
to market criteria
 services will be furnished to companies operating in the
transportation and infrastructure sector
Compared to the expected revenues, the production costs borne by ANAS
currently calculated in NA are significant mostly due to Consumption of
fixed capital