GLOSSARY
Australian production
Australian production refers to the value at basic prices of goods and services produced in Australia.
Basic price
The basic price is the amount receivable by the producer from the purchaser for a unit of a good or service produced as output minus any tax payable, and plus any subsidy receivable, on that unit as a consequence of its production or sale. It excludes any trade margins or transport charges invoiced separately by the producer. Output sold at prices that are not economically significant (see also Economically significant prices) is not valued at these prices. Rather, such output is valued at its cost of production.
Chain volume measures
Annually-reweighted chain Laspeyres volume indexes referenced to the current price values in a chosen reference year (i.e. the year when the quarterly chain volume measures sum to the current price annual values). Chain Laspeyres volume measures are compiled by linking together (compounding) movements in volumes, calculated using the average prices of the previous financial year, and applying the compounded movements to the current price estimates of the reference year. Quarterly chain volume estimates are benchmarked to annual chain volume estimates, so that the quarterly estimates for a financial year sum to the corresponding annual estimate.
Generally, chain volume measures are not additive. In other words, component chain volume measures do not sum to a total in the way original current price components do. In order to minimize the impact of this property, the ABS uses the latest base year as the reference year. By adopting this approach, additivity exists for the quarters following the reference year and non-additivity is relatively small for the quarters in the reference year and the quarters immediately preceding it. The latest base year and the reference year will be advanced one year with the release of the June quarter issue of this publication. A change in reference year changes levels but not growth rates, although some revision to recent growth rates can be expected because of the introduction of a more recent base year (and revisions to the current price estimates underlying the chain volume measures).
Changes in inventories
Changes in inventories represent the difference in value between inventories held at the beginning and end of the reference period by enterprises and general government. For national accounting purposes, physical changes in inventories should be valued at the prices current at the times when the changes occur. For these purposes, changes in inventories are obtained after adjusting the increase in book value of inventories by the inventory valuation adjustment. The need for the latter arises because the changes in the value of inventories as calculated from existing business accounting records do not meet national accounting requirements. The inventory valuation adjustment is the difference between the change in (book) value of inventories and the physical changes valued at current prices. The physical changes at average current quarter prices are calculated by applying average quarterly price indexes to the changes in various categories of inventories in volume terms.
Classification of Individual Consumption by Purpose (COICOP)
The classification used to breakdown Household Final Consumption Expenditure by purpose or function.
Compensation of employees (CoE)
Compensation of employees is the total remuneration, in cash or in kind, payable by an enterprise to an employee in return for work done by the employee during the accounting period. It is further classified into two sub-components: wages and salaries; and employers’ social contributions. Compensation of employees is not payable in respect of unpaid work undertaken voluntarily, including the work done by members of a household within an unincorporated enterprise owned by the same household. Compensation of employees excludes any taxes payable by the employer on the wage and salary bill (e.g. payroll tax).
Cost insurance and freight (c.i.f) value
The value of goods being imported/exported at the border of the importing country. This is equal to the f.o.b. value plus the cost of freight and shipping between the border of the exporting country and the border of the importing country. In the supply-use tables imports are valued on a c.i.f basis.
Coverage ratio (for a product)
A product may be produced by more than one industry. The coverage ratio shows what proportion of the total domestic supply of a product is produced by the industry to which the product is primary.
Current prices
Estimates are valued at the prices of the period to which the observation relates. For example, estimates for 2002–03 are valued using 2002–03 prices. This contrasts to chain volume measures where the prices used in valuation refer to the prices of a previous period and to previous years' prices measures where the prices used in valuation refer to the prices of the previous period.
Economically significant prices
Prices which have a significant influence on both the amounts producers are willing to supply and the amount purchasers wish to buy.
Exports of goods and services
The value of goods exported and amounts receivable from non-residents for the provision of services by residents.
Final demand
Final demand is the total of all expenditure on goods and services that are not intermediate use. It is derived by aggregating Household Final Consumption Expenditure, Government Final Consumption Expenditure, Private Gross Fixed Capital Formation, Public Gross Fixed Capital Formation, General Government Gross Fixed Capital Formation, Change in inventories, Exports and Re-exports.
Free-on-board (f.o.b.) value
The value of goods being imported/exported at the border of the exporting country. This includes the value of the goods, the value of outside packaging for the goods and the costs involved in transporting goods up to the border of the exporting country. It does not involve the cost involved in shipping between the border of the exporting country and the border of the importing country. in the supply-use tables exports are valued on a f.o.b. basis.
Government final consumption expenditure (GFCE)
Net expenditure on goods and services by public authorities, other than those classified as public corporations, which does not result in the creation of fixed assets or inventories or in the acquisition of land and existing buildings or second-hand assets. It comprises expenditure on compensation of employees (other than those charged to capital works, etc.), goods and services (other than fixed assets and inventories) and consumption of fixed capital. Expenditure on repair and maintenance of roads is included. Fees, etc., charged by general government bodies for goods sold and services rendered are offset against purchases. Net expenditure overseas by general government bodies and purchases from public corporations are included. Expenditure on defence assets is classified as gross fixed capital formation.
Gross domestic product (GDP)
Gross domestic product is the total market value of goods and services produced in Australia within a given period after deducting the cost of goods and services used up in the process of production, but before deducting allowances for the consumption of fixed capital. Thus gross domestic product, as here defined, is 'at market prices'. It is equivalent to gross national expenditure plus exports of goods and services less imports of goods and services.
General Government Gross fixed capital formation (GG GFCF)
Expenditure on new fixed assets plus net expenditure on second-hand fixed assets by the general government sector. This includes both additions and replacements.
Gross operating surplus (GOS)
Gross operating surplus is a measure of the surplus accruing to owners from processes of production before deducting any explicit or implicit interest charges, rents or other property incomes payable on the financial assets, non-produced non-financial natural resource assets (such as land) required to carry on the production and before deducting consumption of fixed capital. However, GOS is measured after the deduction of financial intermediation services indirectly measured and the insurance service charge. It excludes gross mixed income which is the surplus accruing to owners of unincorporated enterprises. Gross operating surplus is also calculated for general government, where it equals general government's consumption of fixed capital.
Gross value added (GVA)
Gross value added is defined as the value of output at basic prices minus the value of intermediate consumption at purchasers' prices. The term is used to describe gross product by industry and by sector. Basic prices valuation of output removes the distortion caused by variations in the incidence of commodity taxes and subsidies across the output of individual industries.
Household final consumption expenditure (HFCE)
Net expenditure on goods and services by persons and expenditure of a current nature by private non-profit institutions serving households. This item excludes expenditures by unincorporated businesses and expenditures on assets by non-profit institutions (included in gross fixed capital formation). Also excluded are maintenance of dwellings (treated as intermediate expenses of private enterprises), but personal expenditure on motor vehicles and other durable goods and the imputed rent of owner-occupied dwellings are included. The value of 'backyard' production (including food produced and consumed on farms) is included in household final consumption expenditure and the payment of wages and salaries in kind (e.g. food and lodging supplied free to employees) is counted in both household income and household final consumption expenditure.
Imports of goods and services
The value of goods imported and amounts payable to non-residents for the provision of services to residents.
Input-output industry group (IOIG)
IOIGs are based on the Australian and New Zealand Standard Industrial Classification (ANZSIC) and the input-output tables are published at this level of industry.
Input-output product classification (IOPC)
The IOPC is the detailed level product classification, organised according to the industry to which each product is primary. Input-output tables are compiled at this level of product classification.
Input-output product group (IOPG)
IOPGs are groups of IOPCs aggregated to the IOIGs to which they are primary. Input-output tables are published at this level of product classification.
Intermediate use (or intermediate consumption)
Intermediate use consists of the value of the goods and services consumed as inputs by a process of production, excluding the consumption of fixed capital.
Intra–industry flows
Intra-industry flows refer to the production by units in an industry and use of that production by other units within the same industry. Australian input-output tables include the values of these flows.
Inventories
Inventories consist of stocks of outputs that are held at the end of a period by the units that produced them prior to their being further processed, sold, delivered to other units or used in other ways, and stocks of products acquired from other units that are intended to be used for intermediate consumption or for resale without further processing.
Margins
When a good or service is purchased by a business and sold again at a higher price, without the the product being substantially transformed, it is considered to be a margin transaction. The value of the margin is derived as the difference between the purchase price and the sale price of the product. This margin can be split into multiple categories (e.g. retail margin and transport margin). If the transactions are valued at basic prices, the margins are recorded as intermediate consumption (e.g. transport, wholesale trade) of the intermediate users or final buyers. If transactions are valued at purchasers’ prices the value of margins in included, along with taxes less subsidies on products with the purchasers’ price of the good to which the margin relates.
Other subsidies on production
Other subsidies on production consist of all subsidies, except subsidies on products, which resident enterprises may receive as a consequence of engaging in production. Other subsidies on production include: subsidies related to the payroll or workforce numbers (including subsidies payable on the total wage or salary bill), on numbers employed, or on the employment of particular types of persons, e.g. persons with disabilities or persons who have been unemployed for a long period.
Other taxes on production
Other taxes on production consist of all taxes that enterprises incur as a result of engaging in production, except taxes on products. Other taxes on production include: taxes related to the payroll or workforce numbers excluding compulsory social security contributions paid by employers and any taxes paid by the employees themselves out of their wages or salaries; recurrent taxes on land, buildings or other structures; some business and professional licences where no service is provided by the Government in return; taxes on the use of fixed assets or other activities; stamp duties; taxes on pollution; and taxes on international transactions.
Previous Years' Prices
Estimates are valued at the prices of the period prior to the period to which the observation relates. For example, estimates for 2002–03 are valued using 2001–02 prices. This contrasts to current price measures where the prices used in valuation refer to the prices of the current period. Previous Years' Price measures are used in the compilation of chain volume measures.
Primary inputs
Primary inputs include compensation of employees, gross operating surplus and gross mixed income, taxes less subsidies on products, other taxes less subsidies on production and imports.
Private Gross fixed capital formation (Private GFCF)
Expenditure on new fixed assets plus net expenditure on second-hand fixed assets by private corporations. This includes both additions and replacements.
Public Gross fixed capital formation (Public GFCF)
Expenditure on new fixed assets plus net expenditure on second-hand fixed assets by public corporations. This includes both additions and replacements.
Purchasers' price
The purchasers' price is the amount paid by the purchaser, excluding any deductible tax, in order to take delivery of a unit of a good or service at the time and place required by the purchaser. The purchaser’s price of a good includes any transport charges paid separately by the purchaser to take delivery at the required time and place.
Re–exports
Re-exports are goods imported into Australia and then exported without having been used or transformed in any way.
Retail margin
The difference between the final sale price of a good or service by a retailer and the costs involved in stocking the good or service (including purchasing the good or service and transporting the good or service to the point of sale). Retail margins are differentiated from wholesale margins as retailers sell products for final use.
Specialisation ratio (for an industry)
An industry may produce a number of products, some of which may be primary to that industry and some of which may be primary to other industries. The specialisation ratio shows the proportion of an industry’s output that is primary to that industry.
Subsidies on products
A subsidy on a product is a subsidy payable per unit of a good or service. The subsidy may be a specific amount of money per unit of quantity of a good or service, or it may be calculated ad valorem as a specified percentage of the price per unit. A subsidy may also be calculated as the difference between a specified target price and the market price actually paid by a purchaser. A subsidy on a product usually becomes payable when the product is produced, sold or imported, but it may also become payable in other circumstances, such as when a product is exported, leased, transferred, delivered or used for own consumption or own capital formation.
Supply-use industry classification (SUIC)
SUICs are based on the Australian and New Zealand Standard Industrial Classification (ANZSIC) and the supply-use tables are published at this level of industry.
Supply-use product classification (SUPC)
The SUPC is the detailed level product classification, organised according to the industry to which each product is primary. Supply-use tables are compiled at this level of product classification.
Supply-use product group (SUPG)
SUPGs are groups of SUPCs aggregated to the SUICs to which they are primary. Supply-use tables are published at this level of product classification.
Taxes on products
A tax on a product is a tax that is payable per unit of some good or service. The tax may be a specific amount of money per unit of quantity of a good or service (quantity being measured either in terms of discrete units or continuous physical variables such as volume, weight, strength, distance, time, etc.), or it may be calculated ad valorem as a specified percentage of the price per unit or value of the goods or services transacted. A tax on a product usually becomes payable when it is produced, sold or imported, but it may also become payable in other circumstances, such as when a good is exported, leased, transferred, delivered, or used for own consumption or own capital formation.
Trade margin
Trade margin is defined as the difference between the actual or imputed price realised on a good purchased for resale and the price that would have to be paid by the distributor to replace the good at the time it is sold or otherwise disposed of.
Transport margin
Transport margins include any transport charges invoiced separately. In the supply-use tables, if the producer agrees to deliver the product to the purchaser without explicit charge the cost of delivery is included in the basic price, and only if the purchaser is explicitly invoiced for thedelivery is there a specific transportation margin that is part of the purchaser’s price. This differs from the treatment in the input-output tables, where the costs arising through the transport of goods from a producer to a purchaser by a third party even without a separate invoice is recorded as a transport margin and excluded from the basic price of the good being transported.
Wholesale margin
The difference between the final sale price of a good or service by a wholesaler and the costs involved in stocking the good or service (including purchasing the good or service and transporting the good or service to the point of sale). Wholesale margins are differentiated from retail margins as wholesalers sell products for intermediate use by other businesses.
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