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Coverage of transactions

Australian System of National Accounts: Concepts, Sources and Methods
Reference period
2020-21 financial year

22.60    Input-Output tables record only those flows of goods and services that have been domestically produced, imported or drawn from domestic inventories during the reference period. Therefore, some transactions are outside the scope of the Input-Output tables and so are not recorded in them. The most important exclusions are financial transactions, such as loans, interest and the purchases of securities, which are not products in an SNA sense.

22.61    Other transactions have to be modified before they can be included in the tables. For instance, flows of products are commonly reported as sales and purchases, but the Input-Output tables should record output and usage. Output will differ from sales, and input (or usage) will differ from purchases, by the amount of inventory change (positive or negative) in both cases. Output is calculated as sales plus changes in inventories of finished goods plus changes in inventories of work-in-progress, and input is calculated as purchases less changes in inventories of materials. Changes in inventories are recorded in a separate final demand column in the row of the industry of origin. Entries in this column refer to changes in inventories of both domestically produced and imported products, regardless of whether they are held by producers, dealers or intermediate users.

22.62    Input-Output tables include some elements which are not market transactions, such as the imputed rentals of owner-occupied dwellings and some home-produced food, as output for own-final consumption.

22.63    For analytical purposes, they also include own intermediate use of some energy products such as gas or electricity.

22.64    Estimates for own-account computer software and research and development are also included to estimate output, as output for own final use as fixed capital formation.

Valuation of transactions

22.65    The flows in Input-Output tables can be valued in several ways. The choice depends partly on the intended use of the tables and partly on availability of data (including the assumptions that can reasonably be made where data are lacking). The valuation conventions most commonly used are basic prices, producers' prices and purchasers’ prices. These are defined as follows:

  • basic price – 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 transport charges invoiced separately by the producer, and an adjustment is made to exclude delivery charges that are not separately invoiced, organised by the producer and delivered by a third party.
  • producers’ price – the amount receivable by the producer from the purchaser for a unit of a good or service produced as output, including any tax that is incorporated within the sales price, and excluding any subsidy that reduces the sales price, on that unit as a consequence of its production or sale. It excludes any transport charges invoiced separately by the producer, and an adjustment would be made to exclude delivery charges that are not separately invoiced, however, producer's price is not used in the Australian I-O tables.
  • purchasers’ price – the amount paid by the purchaser in order to take delivery of a unit of a good or service at the time and place required by the purchaser. It includes any transport charges paid separately by the purchaser to take delivery at the required time and place. GST paid by producers for which input credits are granted is excluded from purchasers' prices.

22.66    The difference between the cost of a product to the purchaser and the basic price receivable by the producer is composed of taxes less subsidies on products and margins such as transport and storage services, marine insurance, and wholesale and retail margins. Regardless of whether the producer or the purchaser initially pays for the margins, the concept of producer's price excludes the margins and the concept of purchaser's price includes them.

Special valuation issues

Basic margins

22.67    If the transactions are valued at basic prices, the margins are recorded as inputs from the appropriate industry (e.g. transport, wholesale trade) to the intermediate users or final buyers. If transactions are valued at purchasers' prices, the value of the margins is added, along with taxes less subsidies on products, to the basic price of the good to which the margins relate. The input into the intermediate or final use category of the transport or wholesale trade industry is reduced by a corresponding amount.

22.68    Whichever method is used, a complicated estimation process will be necessary before the transactions can be valued in one of these ways. First, input and output statistics from economic statistics collections are not available on the same valuation basis. Most output statistics are on an ex-plant or similar basis, but input statistics are normally available at the price paid by the user. Second, margins apply only to those flows of products which have actually passed through the 'margin' industries. Any products delivered directly from producer to user, without intervention of 'margin' industries, are obviously unaffected by margins.

22.69    The incidence of margins can vary considerably between users, depending on the channels through which they obtain their supplies. For instance, most producers would not buy supplies to meet their requirements through retailers, while practically all households do so.

22.70    The supply of product groups containing margin products consists of two parts: that which involves the movement of goods and that which represents other (non-margin) products. Only the first of these parts (e.g. freight of goods by rail or road) is treated as margin, and this part is allocated differently depending on whether the flows are at basic prices or at purchasers' prices. The second part (e.g. railway fares) is treated as non-margin and is always shown as paid by purchasers.

Taxes and subsidies on products

22.71    The treatment of taxes on products in Input-Output tables creates special problems which can only be solved by conventions.

22.72    The concept of producers' price includes taxes on products. If transactions are valued at producers' prices, taxes on products are recorded as being paid by producers. However, taxes on products do not accrue to producers, are not levied on all products, and can vary significantly between different uses and over time, for reasons which have nothing to do with production. For instance, GST may not be payable on exports or on government purchases of some products, but it may be quite high on the same products bought for personal consumption. Therefore, if taxes on products were included in the value of products on which they are levied, the flows would not be valued uniformly, and the subsequent manipulation of the tables could give quite erroneous results.

22.73    This problem can be avoided by recording the product flows at the value at which they leave the producers before product taxes are charged and showing these taxes separately from the product flows where they arise. When this method is adopted, the flows are valued at basic prices and this is the basis of valuation adopted in most tables in the I-O publication. In these tables, all flows of products exclude taxes on products. These taxes are shown in separate rows. Taxes on products are shown as being paid by the users of the products on which the taxes are levied, except for GST paid by producers and for which input credits are granted. Other non-deductible GST is allocated to final consumers.

22.74    Other taxes on production are shown as being paid by the industry that incurred them. In tables at purchasers' prices, taxes on products are shown as paid by the producer of products subject to tax. As with margin elements, this treatment of taxes on products can result in lack of uniform valuation of product flows and in the distortion of input-output relationships.

22.75    Product specific subsidies are treated as negative taxes on products, and the amounts shown in a separate row representing the difference between the two.

22.76    In tables at basic prices, taxes on products are recorded as paid by purchasers. If the purchasers also bought some products which attract a subsidy, the amount of subsidy is deducted from taxes on products paid by them.