In this way the activities of the resources sector are, to some extent, “grossing up” the figures in the capital account and the NID (Graph 5 shows this relationship for the economy as a whole). That is, the reinvested earnings are recorded as a capital inflow, even though the money remains in Australia.
As a result, the recorded current account deficit and corresponding net capital inflow are larger than the actual cross-border flows of funds associated with this investment.