APPENDIX 1: DETAILS OF PROPOSED ABS TrSA METHODOLOGY

Step 1: Selection of modal industries for deriving own-account transport

This step involves determining the level of disaggregation of for-hire modal industries for which the associated input requirements are broadly representative of the corresponding own-account production for each transport mode.

The most significant assumption made in this methodological approach is that a particular product has the same input requirements in whichever industry it is produced (known as the product technology assumption). This means that for any given transportation mode, the shares of all intermediate and primary inputs used in the production of transport activity relative to total output are generally identical regardless of whether produced in a transport or non-transport industry. Note that this assumption is relaxed slightly in cases where there are known differences between the input requirements of for-hire and own-account transport activities (e.g. advertising expenses would not be a required input for own-account production).

This assumption is likely to be more valid for transport modes (and associated modal industries) where product output is relatively homogenous. The following factors need to be taken into account in defining each for-hire modal industry:

• Each modal industry should be broadly representative of the productive process, and associated input structure, of the corresponding own-account transport activity.
• The level of for-hire modal industry detail in the supply-use and input-output tables (road, rail, air and water), and the limited data available (or able to be collected) to expand the level of this detail.

 
Table 2 presents the types of own-account modal activity which may be linked with for-hire activity and therefore measured in an Australian TrSA.

Table 2: Own account activity which can be met by for hire counterparts

ANZSIC Sub-division	Descriptor	Maximum ANZSIC detail	Own-account activity which can be represented by for-hire activity	Own account activity with no for-hire counterpart
46	Road transport	4610 Road freight transport	Trucks (articulated and rigid) Light commercial vehicles
		4621 Interurban and Rural Bus Transport	Buses and coaches
		4622 Urban Bus Transport (Including Tramway)
		4623 Taxi and Other Road Transport		Passenger vehicles (corporate cars) Motor cycles Non-freight carrying trucks (waste collection services, police and emergency services)
47	Rail transport	4710 Rail freight transport	Rail freight (locomotives and rolling stock)
		4720 Rail passenger transport
48, 50	Water, pipeline and other transport	4810 Water freight transport	Water freight (vessels/watercraft)
		4820 Water passenger transport		Water passenger (water police, fisheries)
		5010 Scenic and Sightseeing Transport
		5021 Pipeline Transport
		5029 Other Transport n.e.c.
49	Air and space transport	4900 Air and space transport	Air transport (aircraft)

Step 2: Selection of Transportation Related Inputs (TRIS) expenditure items

For each transport mode by non-transport industry, we need to estimate a measurable component of the inputs used in the production of own-account transport activity.

In the United States approach, this involved the estimation of transport related inputs (TRIs) which are intermediate consumption products unique to transportation activities (e.g. fuel, tyres, repair and maintenance, parts) and therefore an indicator of transport activity. In the Canadian approach, wages by industry and transport mode were derived from their Population Census and used to derive own account inputs.

In the Australian context, TRI information on own-account activity will be collected in the 2010-11 Economic Activity Survey (EAS), while Census 2011 information may allow the derivation of wages by occupation if required.
The transport related data items to be collected across all industries in 2010-11 are shown below. Note that some data, e.g. breakdown of type of fuels, will only be directly collected for the transport industry.

Table 3: Own account activity which can be met by for hire counterparts

Mode	Transport Related Inputs	Type of vehicle and transport equipment operated	For-hire industry
Road transport	Types of fuel used to power registered transport and motor vehicles Diesel Petrol Liquefied petroleum gas Other Repair, maintenance, parts and accessories Toll fees Registration fees and compulsory third party premiums Other road transport expenses	Rigid trucks Articulated trucks Light commercial vehicles Buses and coaches Passenger vehicles Motor cycles Non-freight carrying trucks	461 Road freight transport 462 Road passenger transport No applicable for-hire counterpart
Rail transport	Electricity used to power train or tram networks Fuel used for rail transport Above and below rail parts, repair and maintenance Rail network access fees Other rail transport running expenses	Locomotives Rail rolling stock	471 Rail freight transport
Water transport	Expenditure on fuels and gas used for vessels/watercraft Port access fees Parts, repair and maintenance of watercraft Other water transport running expenses	Vessels/watercraft	481 Water freight transport
Air transport	Types of fuel used for air transport Aircraft parts, repair and maintenance of aircraft Airport access fees Other air transport running expenses	Aircraft	49 Air and space transport

Step 3: Estimation other inputs for own-account transport by non-transport industries

Transport activities require certain inputs that are not uniquely or mainly used for transport. For example, office supplies and accounting services are shared by transport and all other production activities. The transport use of these products could be estimated for each industry using the relationships from for-hire transport industries (as in the United States TrSA).

Adjustments would be made when there are known differences between for-hire and own-account transport activities for a particular mode (e.g. removal of expenses not incurred by own-account activities or difference in types of trucks used by for-hire and own-account industries).

Wages could be estimated based on the ratio of value added to non-value added from the for-hire transport industry. Options to derive gross operating surplus are discussed in section 7.31.

Step 4: Calculation of own-account transport output

In this step, own-account transport output (equivalent to total own-account transport operating expenses) is estimated for the non-transport industries for each transport mode. Total operating expenses is the sum of intermediate inputs, primary inputs (e.g. wages and salaries, supplementary labour income, mixed income and depreciation expenses) and net indirect taxes.

Intermediate and primary inputs to the own-account production of transport services are redefined to a newly defined transport industry, "Own-account transport". Although total value added for the total economy remains unchanged, the value added estimate for transport activity would include the amount of value added for the own-account transport activities that is redefined and therefore subtracted from other industries’ value added.

In terms of the supply-use framework, a TrSA would show both the output of transport services (supplied by the "own-account transport industry") and the intermediate consumption of transport services (by the industries currently “using” own-account transport) increasing by the same amount, resulting in the economy wide measures of value added and GDP remaining unchanged.