GLOSSARY OF FREQUENTLY USED TERMS IN THE INPUT OUTPUT TABLES
Australian production
Australian production refers to the value at basic prices of goods and services produced in Australia.
Basic price
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 transport charges invoiced separately. It also excludes charges related to the transport arranged by the producer and delivered by a third party without separate invoice. The latter is a deviation from the international standard.
Changes in inventories
Changes in inventories represent the difference in value, after adjusting for holding gains, between inventories held at the beginning and end of the reference period by enterprises and general government. In the input-output tables, changes in inventories can take positive or negative values.
Compensation of employees (CoE)
The value of entitlements earned by employees from their employers for services rendered, includes wages and salaries received by employees in cash and in kind (e.g. provision of food, accommodation or motor vehicles), and employers' social contributions such as superannuation contributions and workers' compensation premiums.
Competing imports
Competing imports are those products which are both produced domestically and imported, so that substitution between the two sources of supply is possible.
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.
Direct allocation of imports
The direct allocation method of recording imports involves allocating imports to the industries which use them and including them with the primary inputs to these industries in deriving the total production. With this method the intermediate consumption and final demand matrices contain only the use of domestic production, and so the intermediate use matrix does not reflect the full input structure of industries.
Direct requirements coefficients
Direct requirements coefficients refer to the proportions of inputs directly required from industries by industries to produce $100 of output. In calculating the direct requirements coefficients, the flow on effects on industries are not taken into account. For details, refer to 'Indirect Requirements' below.
Goods and services tax (GST)
The GST is a tax of 10 per cent on the price of most goods and services in Australia, including those that are imported. It does not apply to sales of goods or services that are either exempt (GST-free) or input-taxed.
Government final consumption expenditure (GFCE)
Government final consumption expenditure is current expenditure by general government bodies on services to the community such as defence (excluding defence weapons platforms) , education, and public order and safety. If these are provided free of charge or at charges which cover only a small proportion of costs, the government is considered to be the consumer of its own output. This output has no directly observable market value, and so it is valued in the national accounts at its cost of production. It also includes the value of the portion of market output purchased by the General Government sector on behalf of beneficiaries.
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'.
Gross fixed capital formation (GFCF)
Gross fixed capital formation is the value of acquisitions less disposals of new or existing fixed assets. Assets consist of tangible or intangible assets that have come into existence as outputs from processes of production, and that are themselves used repeatedly or continuously in other processes of production over periods of time longer than one year.
Gross operating surplus (GOS) and gross mixed income (GMI)
The primary income of corporations is gross operating surplus, which is the excess of gross output over the sum of intermediate consumption, compensation of employees, and taxes less subsidies on production and imports. Gross operating surplus is also calculated for general government, where it equals consumption of fixed capital, and for dwellings owned by persons. Gross mixed income is the surplus on production of unincorporated enterprises. It includes a return to the owners' labour and capital inputs hence—the term 'mixed income'.
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. Basic price valuation of output removes the distortion caused by variations in the incidence of taxes and subsidies on products across the output of individual industries.
Household final consumption expenditure (HFCE)
Household final consumption expenditure includes expenditure by resident households on goods and services, whether the expenditure is made within the domestic territory or by Australian residents abroad, and expenditure by non-profit institutions serving households. Separate estimates of final consumption expenditure of NPISHs are not currently compiled by the ABS. Their expenditure is included instead with that of households.
Indirect allocation of imports
The indirect allocation method of recording imports includes these imports in the intermediate use of industries and in the final use categories without distinguishing the imports from the products with which they compete. This allows the intermediate use matrix to fully reflect the input structures of industries. With this method the imports are also listed under the industries' use of primary inputs, but after deriving total production.
Indirect requirement
The chain of calculations of output requirements can be continued beyond the direct requirements of an industry. For example, in order to produce output from the chemicals industry, inputs are required directly from the mining industry. However, to supply this direct requirement, the mining industry itself requires inputs from the chemicals industry. To produce this indirect requirement of the mining industry, the chemicals industry needs, in turn, additional output from the mining industry, and so on in a convergent infinite series. This example has been confined to two industries directly dependent on each other, but indirect requirements can arise even in the absence of direct dependence. For example, the mining industry may not directly require any inputs from agriculture, but it requires inputs from chemicals which cannot be satisfied without input from agriculture. Therefore, there is an indirect requirement by mining for agricultural input.
Input output industry group (IOIG)
Input Output Industry Groups (IOIGs) are based on the Australian and New Zealand Standard Industrial Classification (ANZSIC). Input output tables are published at this level of industry classification.
Input Output Product Classification (IOPC)
The Input Output Product Classification (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)
Input Output Product Groups (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
Intermediate consumption 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. Level of inventories are not available from input output tables, as only the change in inventories during the reference year are recorded.
Margins
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 the margins is included , along with taxes less subsidies on products with the purchasers' price of the good to which the margins relate.
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. The subsidies may also be intended to cover some or all of the costs of training schemes organised or financed by enterprises. Subsidies aimed at reducing pollution are also included.
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.
Primary inputs
Primary inputs are Compensation of Employees, Gross Operating Surplus and Gross Mixed Income, Taxes less Subsidies on Products, Other Taxes less Subsidies on Production and Imports.
Primary input content
The primary input content per $100 of final use by an industry shows the ultimate content (resulting from direct and indirect requirements) of each primary input in $100 of that industry's final use.
Purchasers' price
The purchaser's price is 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. 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. According to the international statistical standards, purchaser's prices are recorded exclusive of any deductible value added taxes, such as the Australian goods and services tax (GST) where these taxes are deductible for producers.
Quadrants in an Input-Output Table
The following link Input output table diagram contains a simplified input-output table for illustration purposes. In this illustration, Quadrant 1 represents the industry (row) by industry (column) dimension, quadrant 2 represents the industry by final demand dimension, quadrant 3 represents primary input by industry dimension and quadrant 4 represents the primary input by final demand dimension.
Quadrant 1
Flows between domestic industries are shown in Quadrant 1. This is usually referred to as the inter-industry quadrant. Each column in this quadrant shows the intermediate inputs into an industry in the form of goods and services produced by other industries, and each row shows those parts of an industry's output which have been absorbed by other industries. For example, the cell at the intersection of row i and column j shows how much output of industry i has been absorbed by industry j for current production.
Quadrant 2
Disposition of output to categories of final demand is shown in Quadrant 2. Quadrants 1 and 2 together show the total usage of the goods and services supplied by each industry.
Quadrant 3
Quadrant 3 shows entries usually referred to as primary inputs: compensation of employees; gross operating surplus and gross mixed income; imports; and various types of taxes on production.
Quadrant 4
Quadrant 4 shows primary inputs to final demand. In the Australian Input Output Tables, only the primary input 'Taxes less subsidies on products' has values in this quadrant.
Re-exports
Re-exports are goods imported into Australia and then exported without having been used or transformed in any way.
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.
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.
Total requirements coefficients
A total requirement coefficient at the intersection of row i and column j of a table represents the value of output of industry i required directly and indirectly to produce 100 units of output absorbed by final demand (i.e. final output) of industry j.
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. The added value arising through the transport of goods from a producer to a purchaser by a third party even without separate invoice is excluded from the basic price of the good being transported and is recorded as a transport margin. The latter is a deviation from the international standard.
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