The ABS includes estimates of FISIM in CPI, National Accounts and Balance of Payments statistics in accordance with the relevant international standards. The CPI and national accounts estimates displayed some volatility during the period of the global financial crisis and attracted criticisms from the user community. Other countries had similar experiences with national accounts. Following extensive consultation and research work on the issue as part of the 16th Series Review of the CPI, the ABS has announced the exclusion of the FISIM component from the headline measure of the CPI until data and methodological improvements can be made. This paper details the research work undertaken that led to the ABS decision, examines some of the conceptual, methodological and data issues being researched by ABS and by international task forces, and provides some suggestions for the way forward.

Keywords: Financial intermediation; Financial services; Indirectly measured; CPI

Biography: Mr Jason Russo is currently the head of the Economic Analysis and Reporting Branch of the Australian Bureau of Statistics (ABS), which leads the field of macroeconomic research in the ABS. Prior to working with the ABS, Mr Russo worked with the Department of the Prime Minister and Cabinet and The Commonwealth Treasury in a range of macroeconomic policy roles.