5260.0.55.001 - Information paper: Experimental Estimates of Industry Multifactor Productivity, 2007  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 07/09/2007  First Issue
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Contents >> Methodology and interpretation >> Taxes and basic prices

TAXES AND BASIC PRICES

Taxes and subsidies on products are usually payable on goods and services when they are produced, delivered, sold, transferred or otherwise disposed of by their producers. They include taxes and duties on imports that become payable when goods enter the economic territory or when services are delivered by non-resident units. For more information on taxes and subsides on products and their treatment in the national accounts refer to Chapters 4 and 21 of the Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0).


In the Australian System of National Accounts, Gross Domestic Product (GDP) is obtained by summing the value added of all industries and then adding taxes less subsidies on products. The difference between gross value added at basic prices, and GDP at market (or purchaser's) prices, is the value of taxes less subsidies on products.


Published market sector MFP estimates currently include all taxes and subsidies on products. The industry estimates in this paper do not include these taxes. That is, industry output is valued at basic prices. One reason for this is essentially practical, as there is no industry detail available to accurately allocate the amount of taxes paid. Besides the practical aspect, another reason is that in some sense taxes at the industry level are arbitrary and distort gross output and value added relativities. Further, it is only volumes that are of interest in productivity measurement, and, conceptually at least, taxes should affect only prices.



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