EXPLANATORY NOTES


INTRODUCTION

1 This publication presents an integrated framework of the total supply of goods and services from domestic and foreign producers that are available for use across the Australian economy. Annual estimates, on an original basis, are provided for the supply-use time series from 1994-95 to the current reference period. All data are available to download from the ABS.Stat website <http://stat.data.abs.gov.au/>


CONCEPTS, SOURCES AND METHODS

2 The supply-use tables are compiled in accordance with international standards contained in the System of National Accounts. These standards are presented in the System of National Accounts, 2008 (SNA08). Australia's application of these SNA standards is described in chapter 7 of the Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0). It is available on the ABS website <https://www.abs.gov.au>. This publication outlines major concepts and definitions, describes sources of data and methods used to derive the supply-use tables, as well as annual and quarterly estimates for major aggregates at current prices and in chain volume terms, and discusses the accuracy and reliability of the national accounts. In addition, it includes documentation on national accounts aggregates such as Gross Domestic Product (GDP), input-output tables, financial accounts, capital stock, productivity measures, balance sheets, and state accounts.


SUPPLY-USE FRAMEWORK

3 The supply-use framework comprises two tables as shown in Figure 1. The supply table shows the total supply of products from domestic and foreign producers that are available for use in the domestic economy. The use table presents the use of this supply by industries as intermediate inputs and by final users. Once both sides are equal (i.e. supply = use) for all products, the supply-use tables are said to be balanced. Balanced supply-use tables provide the benchmarks for the current price and chain volume measures of annual GDP.

SUPPLY TABLE

4 The left side of Figure 1 is a supply table. The domestic output matrix forms the main body of the supply table. In this matrix, industries appear across columns and products across rows, and each cell indicates the amount of each product that is produced domestically by each industry at basic prices. Total domestic supply by commodity (valued at basic prices) presents the sum of the domestic output and imports. Imports are valued at domestic port value, that is, free on board, which is equivalent to the importer’s customs frontier price.

5 The valuation adjustments bridge the difference between total domestic supply at basic prices and domestic supply at purchasers’ prices. This adjustment includes the margin component and the tax and subsidy component. The purpose of the margin component is to show the allocation of wholesale and retail trade margins and transportation costs to the products on which these charges are levied.

6 The tax and subsidy component adds taxes on products and subtracts subsidies, thereby completing the transformation from basic prices to purchasers’ prices. Taxes on products include general government sales and excise taxes. Subsidies are monetary grants paid by government agencies to private business and to government enterprises to keep prices of products low/competitive.


USE TABLE

7 The structure of the use table shows the use of products by industries and by final users as well as the value added by industry at purchasers’ prices. Valuation in purchasers’ prices shows inputs to industries and final uses at values that reflect the actual cost to the user of the product. These costs includes the costs of transporting the product to the user in addition to any wholesale and retail mark-ups incurred while bringing the product to market.

8 The right side of Figure 1 is an industry-level use table in the supply-use framework. This table comprises the intermediate inputs, final demand, and value added matrix. The intermediate inputs matrix forms the central part of the use table. Industries appear across columns and products across rows. In the use table, each cell indicates the amount of a product purchased by each industry as an intermediate input into the industry’s production process. These products are valued at purchasers’ prices, meaning that taxes, transportation costs, and wholesale and retail trade margins are embedded in the total along with the underlying value of the product purchased. No distinction is made in the use table between imports and domestically produced output.

9 The final demand matrix presents expenditure-side components of GDP, including household and government final consumption expenditures, gross final capital formation, change in inventories and exports. Products appear in the rows, and final demand categories (rather than industries) valued at purchasers' prices appear across the columns.

10 Value added by industry at basic prices appears in a row under total intermediate inputs. The values in this row equal total output by industry (row A) in the supply table minus the value of intermediate inputs at purchasers’ prices (row B) in the use table. This equivalency - gross output minus intermediate purchases equal value added generated by production - is an accounting identity that must hold true.

11 The primary income components of value added are also shown. These components are compensation of employees (return to labour), gross operating surplus (return to capital), and other net taxes on production (return to government).


APPLICATION OF SUPPLY-USE TABLES IN THE NATIONAL ACCOUNTS

12 The supply-use tables were introduced in the annual national accounts in 1998, as an integral part of the annual compilation of GDP. They are building blocks for ABS national accounts as they are used to ensure GDP is balanced for all three approaches (production, expenditure and income) and provide the annual benchmarks (levels) from which the quarterly estimates are compiled. These tables have been compiled from 1994-95, up to the year preceding the latest complete financial year.

13 GDP is derived by three approaches: the income approach (I), the expenditure approach (E) and the production approach (P). A description of each approach is provided in the following paragraphs. While each measure should, conceptually, produce the same estimate of GDP, if the three measures are compiled independently using different data sources, then different estimates of GDP result. The ABS aligns the estimates of GDP annually by balancing them in supply-use tables.

14 Income approach (I): GDP using the income approach is derived as the sum of compensation of employees, gross operating surplus, gross mixed income and taxes less subsidies on production and imports. Volume estimates are derived at the total GDP level by deflating current price estimates by the implicit price deflator from the expenditure approach.

15 Expenditure approach (E): GDP using the expenditure approach is derived as the sum of all final expenditures, changes in inventories and exports of goods and services less imports of goods and services. Final expenditures include household final consumption, government final consumption, and gross fixed capital formation for the private sector, public enterprises and general government. Volume estimates are derived for each of the components as well as for their sum.

16 Production approach (P): GDP using the production approach is derived as the sum of gross value added for each industry, at basic prices, plus taxes less subsidies on products. Basic values represent the amounts received by producers, including the value of any subsidies on products, but before any taxes on products. The difference between the sum over all industries of gross value added at basic prices, and GDP at market (or purchasers') prices, is the value of taxes less subsidies on products.

17 Annual estimates using the I, E and P approaches are identical for the years for which supply-use tables are compiled. For years balanced using supply-use tables, quarterly GDP is benchmarked to annual GDP. However, the three estimates of GDP can be different for any given quarter. The annual GDP estimate produced by balancing using supply-use tables forms the benchmark for the production of quarterly GDP going forward. Quarterly GDP is compiled in chain volume terms using all three approaches. The headline measure of GDP is a simple average of the three separate measures. It is labelled GDP(A), with "A" denoting "average".

18 Prior to 1994-95 quarterly and annual estimates using each approach are based on independent sources, and there are usually differences between the I, E and P estimates. For these periods, a single estimate of GDP has been compiled. In chain volume terms, GDP is derived by averaging the chain volume estimates obtained from each of the three independent approaches. The current price estimate of GDP is obtained by reflating the average chain volume estimate by the implicit price deflator derived from the expenditure-based estimates.

19 As a result of the above methods, there is no statistical discrepancy for annual estimates from 1994-95 up to the year prior to the latest complete financial year, in either current price or volume terms, except for estimates released in the June quarter where discrepancies will exist for the latest two complete financial years. For years prior to 1994-95, and for all quarters, statistical discrepancies exist between estimates based on the I, E and P approaches and the single estimate of GDP, in both current prices and volume terms. These discrepancies are shown in the relevant tables.

20 The supply-use tables in current prices provide benchmarks to the Australian System of National Accounts (ASNA) (cat. no. 5206.0) at the levels outlined below.

• Gross operating surplus and mixed income, compensation of employees, and other taxes less subsidies on production are benchmarked at Australian and New Zealand standard industry classification (ANZSIC) division.
• Household final consumption expenditure is benchmarked at the Classification of Individual Consumption by Purpose (COICOP).
• Gross fixed capital formation is benchmarked by institutional sector and type of capital asset.
• Change in inventories for selected industries is benchmarked at the Australian total non-farm level.
• Imports, exports, taxes less subsidies on products and government final consumption expenditure are benchmarked at the Australian total.

21 The supply-use tables products are compiled at a lower level than the published Supply-Use Product Group (SUPG). As a result, for several expenditure categories, there are many SUPGs that concord to several expenditure categories. For example SUPG 2301 Motor Vehicles and Parts; Other Transport Equipment manufacturing concords to several COICOPs including Purchase of Vehicles (cars and trucks), Operation of Vehicles (car parts and accessories), Goods for Recreation & Culture (recreational caravans, boats and aircraft), and Other Goods & Services (recreational boat and aircraft repair and maintenance). A concordance between supply-use classifications and the classifications used in the ASNA can be found in Table 4 of this publication.


OUTPUT TABLES

22 The supply-use tables have been divided into four sections.


TABLE 1. SUPPLY BY PRODUCT GROUP BY INDUSTRY

23 This table shows total supply of product groups (SUPG) for the reference year, by Supply-Use Industry Classification (SUIC) at basic prices, imports and the reconciliation of basic prices to purchasers' prices. Margins and taxes less subsidies on products are added to output at basic prices to derive total supply at purchasers' prices. A row in this table represents a product group and a column represents either an industry group, a margin type, taxes less subsidies on products or a total supply category.


TABLE 2. USE BY PRODUCT GROUP BY INDUSTRY

24 This table shows total use of product group (SUPG) for the reference year by intermediate use of using industries (SUIC) and final use by final demand categories, at purchasers' prices. A row in this table represents a product group and a column represents either an industry group, a final demand or total use category.


TABLE 3. PRIMARY INPUTS BY INDUSTRY

25 This table shows primary inputs by industry (SUIC). A row in this table represents a primary input and a column represents either an industry group or a total primary inputs category.

26 The full time series of the above tables are available via the ABS.Stat website <http://stat.data.abs.gov.au/>

TABLE 4. INDUSTRY AND PRODUCT CONCORDANCES

SUIC(2018)

27 The SUIC(2018) table shows the 2018 SUIC code in column A with the 2018 SUIC descriptor shown in column B.

IOIG(2015) to SUIC(2018)

28 In the IOIG(2015) to SUIC(2018) table, the 2015 IOIG codes are shown in column A with the 2015 IOIG descriptors in column B. The 2018 SUIC codes are in column C with the 2018 SUIC descriptors shown in column D.

SUPG(2018)

29 The SUPG(2018) table shows the 2018 SUPG code in column A with the 2018 SUPG descriptor shown in column B.

SUPG(2018) to COICOP

30 In the SUPG(2018) to COICOP table, the 2018 SUPG codes are show in column A with the SUPG(2018) descriptors in column B. The COICOP codes are in column C with the COICOP descriptors shown in column E. Column F indicates whether a 2018 SUPG is mapped partially to a COICOP and is indicated by a 'p' in the column.

SUPG(2018) to Capital asset types

31 In the SUPG(2018) to Capital assets types table, the 2018 SUPG codes are show in column A with the SUPG(2018) descriptors in column B. The Capital asset types are in column C. Column D indicates whether a 2018 SUPG is mapped partially to a Capital Asset Type and is indicated by a 'p' in the column.


PRODUCTS COMBINED FOR CONFIDENTIALITY PURPOSES

32 The information contained in these product details has been confidentialised. This confidentiality has been applied through the suppression of some values (shown as 'n.p.').


RELIABILITY AND REVISIONS

33 The supply-use tables progressively incorporate a large number of data sources such as business activity surveys, household expenditure surveys, investment surveys, international trade statistics, government finance statistics and taxation data. A balancing process is undertaken to achieve consistency between the supply and use of products in the economy, in both current price and volume terms. Data inconsistencies are reviewed and resolved by altering some of the underlying data. The supply-use tables for each year are essentially compiled three times because more comprehensive data only become available with a considerable time lag.

34 The sequence of supply-use tables compilation is according to the following timetable:

• 1st preliminary - end of year t + 12 months;
• 2nd preliminary - end of year t + 24 months; and
• Final - end of year t + 36 months.

35 Annual and quarterly national accounts estimates are benchmarked to successive vintages of the supply-use tables to maintain consistency within the national accounts system. Periodically, the ABS will open up the supply-use tables beyond the normal three years to take on revisions that impact the whole time series, for example, from conceptual changes, methodological changes and new or updated data sources.


RELATED PUBLICATIONS

36 Current publications and other products released by the ABS are listed on the ABS website <https://www.abs.gov.au>. The ABS also issues a daily Release Advice on the website which details products to be released in the week ahead.

37 Users may also wish to refer to the following publications and other data products that are available free of charge from the ABS website:

• Annual Australian System of National Accounts (cat. no. 5204.0);
• Annual Australian National Accounts: State Accounts (cat. no. 5220.0);
• Quarterly Australian National Accounts: Finance and Wealth (cat. no. 5232.0); and
• Annual Australian National Accounts: Input-Output Tables (cat. No. 5209.0.55.001).

38 The United Nations provides information on supply-use tables with its Handbook on Supply, Use and Input-Output Tables
(https://unstats.un.org/unsd/nationalaccount/docs/SUT_IOT_HB_wc.pdf)