Basic, producers' and purchasers' prices

8.11    There is more than one set of prices that can be used to value outputs and inputs depending on how taxes and subsidies on products and transport charges are recorded. ASNA uses basic prices for the valuation of industry outputs, and purchasers' prices for valuation of intermediate inputs and of final demand. This is in line with the recommendations in 2008 SNA.

8.12    It is important to note the distinction between taxes (and subsidies) on products and other taxes (and subsidies) on production when discussing alternate price measures. Taxes on products are payable per unit of the product (i.e. a flat amount dependent on the physical quantity of the product, or a percentage of the value at which the product is sold). Other taxes on production are imposed on the producer regardless of the production of any product (e.g. land taxes).

8.13    The basic price is the amount receivable by the producer from the purchaser for a unit of a good or service, minus any tax payable (including deductible value added taxes) plus any subsidy receivable, as a result of production or sale of the unit. Subsidies artificially reduce the sale price, so they are included in the basic price to obtain a measure of the true value of the goods or services produced. Taxes on products, if included, would artificially increase the price and so are excluded. The basic price also excludes any transport charges invoiced separately by the producer as recommended by 2008 SNA. The basic price therefore measures the amount retained by the producer in respect of the good or service that is produced as output.

8.14    Analysts who use Input-Output tables (I-O tables) have expressed a strong preference for the definition of basic prices in the 1968 version of the SNA, which excludes the transport component whether separately invoiced or not. This treatment has been implemented in the I-O tables. This results in changes to estimates of output and intermediate use by industry for series at basic prices, with no impact on gross value added, GDP or series at purchasers' prices.

8.15    2008 SNA states output can also be measured using producers' prices. These are defined as the amount receivable by the producer, from the purchaser, for a unit of a good or service produced as output, minus any non-deductible GST invoiced to the purchaser and excluding any transport charges separately invoiced by the producer. This measure of output is not included within the ASNA.

8.16    The purchaser's price is the amount paid by the purchaser in order to take delivery of goods or services. Purchasers' prices include any taxes payable (less any subsidies receivable) on production and imports, and any transport charges paid separately by the purchaser to take delivery. Value added taxes such as GST are included in purchasers' prices unless they are allowable as deductions from the purchaser's value-added tax liability. Purchasers' prices are also referred to as market prices.

8.17    In the derivation of industry value added, outputs are valued at basic prices and intermediate consumption is valued at purchasers' prices. By convention, the resulting estimates of industry value added are described as being 'at basic prices'.