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Appendix 4

Comparing the New Zealand Standard Institutional Sector Classification 1996 (NZISC96) and the Statistical Classification for Institutional Sectors (SCIS)

This appendix illustrates the changes from the previous institutional classification, NZISC96, to SCIS.

The previous classification had four levels. SCIS has three levels because control, which was previously embedded in NZISC96, is included in a related, yet separate, control classification.

Sector 1 – Non-financial business enterprises

The sector title, ‘producer enterprises’, is replaced by ‘non-financial business enterprises’.

NZISC96 subsector SCIS subsector Rationale for change
11 Private producer enterprises 11 Corporate business enterprises

The term ‘private producer enterprises’ in NZISC96 captured all units selling their output in the market at economically significant prices. This included both corporate and non-corporate business enterprises. The new subsector 11 includes only corporate business enterprises; non-corporate enterprises are split into subsector 12. These changes have not affected the overall concepts, rather the level at which the corporate/non-corporate split is shown.

The new subsector’s name better reflects the role these units play in the economy. Other terms considered included ‘non-financial corporations’ (used by 2008 SNA), but this term was not appropriate as it is not commonly used in New Zealand.

12 Producer boards   Following legislation changes the largest producer boards ceased to exist, or changed their structure and operations so significantly that they now align very closely with other corporate business enterprises. The few remaining producer boards are economically insignificant. Therefore this subsector is removed.
  12 Non-corporate business enterprises Under NZISC96, these institutional units were called ‘private non-corporate producer enterprises’ and classified to group 112. They are renamed ‘non-corporate business enterprises’ under SCIS and classified to subsector 12. Because the term ‘quasi-corporations’, used in 2008 SNA, is not commonly used in New Zealand ‘non-corporate business enterprises’ was adopted.
13 Government enterprises   In NZISC96, any government-owned/controlled market-oriented businesses were classified to this subsector. Since the control criterion is no longer embedded in the institutional sector classification, government-owned/controlled enterprises or quasi-corporations are now classified to either subsector 11 or 12.
  13 Non-profit business enterprises A new subsector is created for NPIs that serve business enterprises, to help identify NPIs easily. Although these units cannot distribute profits, they support the activities of market units. In NZISC96, these institutional units were usually spread across subsectors 11 to 13, depending on the unit’s role and ownership status.

Sector 2 – Financial business enterprises

The sector title ‘financial intermediaries’ is replaced by ‘financial business enterprises’.

NZISC96 subsector SCIS subsector Rationale for change
22 Depositary organisations 22 Deposit-taking corporations except the central bank

The subsector name is changed to align with 2008 SNA. Separate identification of M3 institutions is removed and the subsector is now split into registered banks – group 221, and other depository institutions – group 222.

23 Investment funds

This new subsector aligns with 2008 SNA. Investment funds are collective investment schemes that raise funds by issuing shares or units. The subsector includes both MMF and non-MMF.

In NZSISC96, these institutional units were combined with other depository organisations and were classified to subsector 22 – depository organisations.

24 Other financial intermediaries excluding insurance and pension funds

Under NZISC96 this was ‘other financial organisations’ (subsector 23). Incorporating 2008 SNA led to considerable changes to this subsector. A number of unit types have moved to other subsectors of sector 2. The SCIS ‘other financial intermediaries excluding insurance and pension funds’ subsector consists of non-depository financial corporations engaged in providing financial services. This subsector was established to align with 2008 SNA.

This subsector includes various types of financial intermediaries, especially those engaged mainly in long-term financing, including:

  • securitisers
  • units that raise funds on behalf of others who may be engaged in providing consumer credit, commercial finance, or finance leasing (ie finance companies)
  • units providing merchant banking services
  • venture and development capital businesses.
24 Insurance and pension funds 25 Insurance corporations Incorporated, mutual, and other entities whose principal function is to provide life, health, or other forms of insurance to individual institutional units or groups are included here. Insurance corporations are a separate subsector under SCIS, consistent with 2008 SNA recommendations.
26 Pension funds Pension funds are split from insurance corporations, consistent with 2008 SNA recommendations.
27 Financial auxiliaries NZISC96 diverged from 2008 SNA because financial auxiliaries were not included in sector 2, as it had a narrower definition of financial intermediaries which did not include financial auxiliaries. This change brings the SCIS in line with the broader concept of the 2008 SNA. Most units in this subsector were classified to sector 1 under NZISC96.
28 Captive financial institutions This subsector consists of institutional units providing financial services, where most assets or liabilities are not transacted on open financial markets. The subsector aligns with 2008 SNA.

Sector 3 – General government institutions

The sector title ‘general government’ is replaced by ‘general government institutions’.

NZISC96 subsector SCIS subsector Rationale for change
31 Central government 31 Central government institutions

The descriptor of this subsector changes.

The funded social security schemes group is renamed funded social insurance schemes. Its expanded definition allows it to include units providing social insurance.

32 Local government 32 Local government institutions The descriptor of this subsector changes. Regional councils and other local authorities were split under NZISC96; under SCIS they are combined.
33 Runanga iwi The Runanga Iwi Act 1990 set out the essential characteristics of iwi and the procedures for establishing runanga (incorporated organisations representing and servicing the iwi). A subsector was added to NZISC96 to reflect this. However, since the Act has been repealed, these governance organisations are now classified to sector 4 as part of subsector 42 – tangata whenua governance organisations.

Sector 4 – Non-profit institutions serving households

The sector title has remained, but it now has two subsectors.

NZISC96 subsector SCIS subsector Rationale for change
41 Private non-profit organisations serving households 41 Non-profit institutions serving households excluding tangata whenua governance organisations This subsector’s title now aligns with 2008 SNA and separates out tangata whenua governance organisations.

42 Tangata whenua governance organisations

The term Runanga iwi is no longer used within the institutional sector classification (after repeal of the Runanga Iwi Act 1990). Instead, SCIS uses the broader term ‘tangata whenua governance organisations’. This change recognises the governance activity of these organisations alongside, but separate from, the crown.
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