Australian production
Australian production refers to the value at basic prices of goods and services produced in Australia.
Basic prices
The amount receivable by the producer from the purchaser for a unit of a good or service produced as output, minus any tax payable plus any subsidy receivable, on that unit as a consequence of its production or sale. The Australian supply-use tables use the 2008 SNA definition of basic prices which excludes any transport charges invoiced separately by the producer. The Australian input-output tables use the 1968 SNA definition of basic prices.
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 (or compounding) movements in volumes
- calculated using the average prices of the previous financial year
- 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.
Changes in inventories
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 according to purpose - Australian version (A-COICOP)
The classification used to breakdown household final consumption expenditure by purpose or function.
Compensation of employees
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 2 sub-components: wages & 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. It 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.
Current prices
Estimates are valued at the prices of the period to which the observation relates. For example, estimates for this financial year are valued using this financial year’s prices. This contrasts to chain volume measures where the prices used in valuation refer to the prices of the previous year.
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 summing:
- 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
- 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. GFCE 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)
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. Gross domestic product, as defined here, is at market prices. It is equivalent to gross national expenditure plus exports of goods and services less imports of goods and services.
Gross fixed capital formation (GFCF)
Expenditure on new fixed assets plus net expenditure on second-hand fixed assets, including both additions and/or replacements. Expenditure on repair and maintenance of fixed assets is excluded, being chargeable to the production account. Compensation of employees and other costs paid by corporations in connection with own-account capital formation are included.
Gross mixed income (GMI)
The operating surplus accruing to unincorporated enterprises from their operations in Australia. It includes elements of wages and salaries, as well as gross operating surplus. Gross mixed income represents the total income before deduction of the costs associated with obtaining it.
Gross operating surplus (GOS)
The operating surplus accruing to all enterprises, except unincorporated enterprises, from their operations in Australia. It is the excess of gross output over the sum of intermediate consumption, compensation of employees, and taxes less subsidies on production and imports. It is calculated before deduction of consumption of fixed capital, dividends, interest, royalties and land rent, and direct taxes payable, but after deducting the inventory valuation adjustment. Gross operating surplus is also calculated for general government and it equals general government's consumption of fixed capital.
Gross operating surplus and mixed income (GOSMI)
The operating surplus accruing to all enterprises from their operations in Australia.
Gross value added (GVA)
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. HFCE includes:
- the value of 'backyard' production (including food produced and consumed on farms)
- the payment of wages and salaries in kind (e.g. food and lodging supplied free to employees)
- personal expenditure on motor vehicles and other durable goods
- imputed rent of owner-occupied dwellings.
This item excludes:
- expenditures by unincorporated businesses and expenditures on assets by non-profit institutions (included in gross fixed capital formation)
- maintenance of dwellings (treated as intermediate expenses of private enterprises).
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. 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 consumption
Consists of the value of the goods and services used as inputs by a process of production, excluding compensation of employees and 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
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. Inventories also includes stocks of products acquired from other units that are intended to be used for intermediate consumption or for resale without further processing.
Margins
A margin transaction is facilitated when a good or service is purchased by a business and sold again at a higher price without the product being substantially transformed. 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:
- electricity
- gas
- retail
- transport
- wholesale
If the transactions are valued at basic prices, the margins are recorded as intermediate consumption of the intermediate users or final buyers. If transactions are valued at purchasers’ prices, the value of margins is included with the purchasers’ price of the good to which the margin relates, along with taxes less subsidies on products.
Other subsidies on production
Consists of all subsidies that resident enterprises may receive as a consequence of engaging in production (except for subsidies on products). They include:
- subsidies on payroll or workforce
- subsidies to reduce pollution
Other taxes on production
Consists of all taxes that enterprises incur as a result of engaging in production (except for taxes on products). They include:
- taxes on payroll or work force
- recurrent taxes on land, buildings or other structures
- business and professional licences
- taxes on the use of fixed assets or other activities
- stamp taxes
- taxes on pollution
- taxes on international transactions
These taxes do not include any taxes on the profits or other income received by the enterprise, and are payable regardless of the profitability of the production. They may be payable on the land, fixed assets or labour employed in the production process or on certain activities or transactions.
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.
Purchasers' prices
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 purchasers' 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 by a retailer and the costs involved in stocking the good (including purchasing the good and transporting the good to the point of sale). Retail margins are differentiated from wholesale margins because retailers sell products for final use by households. They are one example of a trade margin.
Subsidies on products
Subsidies 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, 2006. 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
Taxes 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 the product 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
A trade margin is defined as the difference between the actual or imputed price realised on the 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. It be split into multiple categories in the Australian supply-use tables:
- electricity
- gas
- retail
- wholesale
The food and beverage margin is another example that is combined with retail margins in the Australian tables:
Transport margin
Transport margins include any transportation charges invoiced separately. The Australian supply-use tables use the 2008 SNA definition of basic prices. They include the cost of delivery in basic prices if the producer agrees to deliver the product to the purchaser without explicit charge. A specific transportation margin is included in the purchaser’s price if the purchaser is explicitly invoiced for the delivery.
This treatment differs from the Australian input-output tables, which use the 1968 SNA definition of basic prices. They record transportation by a third party as a transport margin even without a separate invoice. Those costs are excluded from the basic price of the good being transported.
Wholesale margin
The difference between the final sale price of a good by a wholesaler and the costs involved in stocking the good (including purchasing the good and transporting the good or service to the point of sale). Wholesale margins are differentiated from retail margins because wholesalers sell products to other businesses for intermediate use. They are one example of a trade margin.
