Transport margin treatment in Australia's Input-Output tables

The Australian Bureau of Statistics (ABS) is updating the valuation treatment of transport margins in the Input–Output (I-O) tables. Beginning with the next release, the 2024-25 I-O tables scheduled for March 2027, the ABS will adopt the 2008 System of National Accounts (SNA2008) treatment for transport margin allocation. This replaces the longstanding 1968 System of National Accounts (SNA1968) transport margin adjustment that has been applied in Australian I-O tables since the 1960s.

This change ensures the I-O tables are consistent with the full suite of ABS national accounts products, aligns Australia with international standards, and reduces reliance on outdated data sources, and resource intensive modelling approaches.

Australia has one of the longest running Input-Output table programs in the world, dating back to the initial 1958-59 tables, with the modern tables being produced annually from 2012-13.  

Throughout this entire period, Australia maintained the SNA1968 transport margin treatment, in which: 

• All delivery costs (whether separately invoiced or not) are excluded from the basic price of goods used to value supply.
• Non-invoiced delivery is estimated and moved into transport margins. 

This approach was originally compatible with international practice and reflected the policy needs of Australia with its vast geography and large share of goods production in the economy and the significant associated freight task.

Even after Australia adopted the SNA1993 and SNA2008 framework for the broader national accounts, including for annual Supply–Use (S-U) tables, the I-O tables continued using the SNA1968 approach due to its historical precedent and analytical convenience. ABS documentation formally noted this as a deviation from international standards.

Transport margins represent the cost of moving goods from producers to users. They are part of the explanation in the difference between basic prices (amount receivable by the producer) and purchasers’ prices (amount paid by the buyer). Under the System of National Accounts:

• Basic prices exclude taxes on products, trade margins, and transport margins.
• Purchasers' prices include taxes, trade margins, and transport margins.

Under SNA2008: 

• Transport margins are only recorded when separately invoiced.
• Embedded delivery costs remain in the basic price of the good.
• This aligns valuation with observable transactions, not assumptions about delivery behaviour.

Under SNA1968: 

• All delivery costs must be removed from basic prices—whether invoiced or not.
• These implicit delivery costs are estimated and then allocated to transport margins.
• Transport margins therefore include both observable and modelled components. 

This method was used as the international standard until the introduction of SNA1993.

ABS is now moving to the SNA2008 transport margin treatment in I-O tables for several reasons:

Australia’s S-U tables already follow SNA2008, meaning two different valuation systems currently coexist. The S-U tables are the central balancing framework in the national accounts from which symmetric I-O tables are derived. Aligning I-O with S-U removes reconciliation complexity and strengthens the coherence of the accounts.

International economic institutions such as the OECD, IMF and UN Statistical Division all use I-O and S-U frameworks that follow SNA2008 valuation principles, including the treatment of margins. Convergence with these international standards ensures greater compatibility with international databases used for economic analysis such as the OECD Trade in Value Added (TiVA) resource.  

The United Nations Statistical Commission has adopted the System of National Accounts 2025 (SNA2025) as the international statistical standard for national accounts. It is the sixth such edition and third new edition since SNA1968. The ABS has committed to advance its economic statistics in line with the SNA2025 recommendations in the coming years to ensure it reflects the contemporary Australian economy.

Data for the SNA1968 transport margin adjustment cannot be directly collected through product level surveys of industry. Businesses often cannot report the delivery components embedded in product pricing. Respondents also struggle to understand or find it onerous when asked questions to split out transport costs from product prices.  

The ABS relies on outdated data and assumptions around fixed relationships to separate out embedded delivery fees as a transport margin. Moving to the SNA2008 concept means data sources and methods are based on observable invoicing. Data collection, confrontation and statistical outputs will be easier to interpret for respondents and users alike. 

There are a wide range of data and tools on the Transport industry. Including:  

• The Australian Economic Transport Account,
• Mode split datasets are contained in the National Freight Data Hub,
• Product level data from the Bureau of Infrastructure and Transport Research Economics (BITRE) for both freight and passenger transport.

• Transport margins in I-O tables will include only separately invoiced delivery charges.
• Non-invoiced (embedded) transport will no longer be modelled into margins.
• Basic price values will increase and align with SNA2008 definitions used across all ABS national accounts releases.

• Purchasers’ prices remain unchanged because the valuation bridge (basic to purchasers’) still includes margins and taxes.
• Transport analysis and modelling remain possible using other information and microdata assets. Users can construct I-O tables on the SNA1968 basis where it suits their purposes.
• The ABS I-O tables are not revised. They provide a snapshot of the Australian economy at a point-in-time and should not be used as time series.
• The ABS will not be reissuing published I-O tables on the new SNA2008 basis. The ABS has always published the size of the SNA1968 transport margin adjustment and users can attempt to construct I-O tables without the adjustment.
• The format of the tables will not change. The reduced level of transport margins will continue to be split out by transport mode.

The move from the SNA1968 transport margin adjustment to the SNA2008 treatment represents a modernisation in Australia’s Input–Output compilation. It strengthens internal consistency, enhances international comparability, and improves statistical quality.

Figure 1 below provides a comparison between the S-U transport margin (SNA2008) time series up to 2023-24, against the I-O basis (SNA1968) through different points in times. 

Figure 2 below shows the breakdown of the I-O transport margins by different transport modes.