The Australian Defence Industry Account (ADIA) is a satellite account that measures the direct economic contribution of the defence industry to the Australian economy. The account has been compiled, as far as possible, with standard satellite accounting principles, that are aligned with the concepts and structures of the System of National Accounts (SNA). The account presents estimates on Gross Value Added (GVA) of the Australian defence industry to the Australian economy disaggregated by state and industry division.
The following section outlines the broad concepts, sources, and methods for the ADIA.
The following steps are a broad level description of how expenditure data from the Department of Defence (Defence) is used to derive the GVA associated with Defence expenditure:
- Defence expenditure is mapped to ABS product and industry classifications. This enables integration with Australian Bureau of Statistics (ABS) data assets;
Invoices not related to the Australian defence industry are removed;
- Product taxes and subsidies, and margins are removed for each invoiced expense. The residual represents the Basic Price amount, or the amount received by the supplier of the good or service;
- The Basic Price is then used to derive the GVA, and other inputs into production, at an invoice level;
- These values are aggregated based on contributing industry and state.
For a more detailed description of the methods please see the detailed methodology section.