INTRODUCTION

The purpose of this paper is to provide information about changes to the Input-Output Product Classification (IOPC), referred to as IOPC17. This information paper also makes available the structure of the IOPC17 to the public in advance of its implementation in the 2014-15 Australian National Accounts: Input-Output Tables (Product details) (cat. no. 5215.0.55.001), scheduled for late 2017.

The IOPC is an industry of origin product classification that has been specifically developed by the Australian Bureau of Statistics (ABS) for the compilation and application of the Australian Input-Output (I-O) Tables.

Based on the Central Product Classification Version 2 (CPC Ver. 2), the structure of the IOPC arises from its industry-of-origin basis where each product is organised according to the industry in which it is primarily produced. This structure is implemented based on the Australian and New Zealand Standard Industry Classification, 2006 (cat. no. 1292.0) (ANZSIC06), in which the first four digits of the IOPC (which form the I-O product group) typically refer to the ANZSIC06 class to which the product is primary.



SCOPE OF THE CHANGES

The Australian economy is continually evolving and changes to I-O product classification are necessary to reflect this. Other National Statistical Organisation’s I-O product classifications are far more condensed than Australia, particularly for the number of manufactured products (footnote 1). This highlights that there are unnecessary complexities in components of the IOPC structure.

Although minor updates to the IOPC occur every one to two years, the last major revision of the IOPC was in 2009. This was part of the ABS implementation of the 2006 edition of the ANZSIC and the 2008 edition of the System of National Accounts (2008 SNA).

The changes to the IOPC focused on collapsing products that are now redundant or insignificant based initially on economic significance. This was done by calculating how much each product in the classification contributed to the total supply of products in Australia. The ABS found that 367 products out of 1267 account for 90% of supply.

The ABS also considered possible flow on effects for other products and whether the product was of particular interest to users for economic or environmental analysis.

Some of the major aims of this change are:

• to enable focus on expanding detail in areas of greater economic and environmental significance to meet the contemporary needs of users;
• to simplify the classification and thus improving its quality; and
• to reduce the impact of confidentiality on the tables.

To minimise disruption to the aggregated I-O tables published in Australian National Accounts: Input-Output Tables (cat. no. 5209.0.55.001) and to the current relationship that exists between the IOPC and ANZSIC06, the changes to the IOPC only affected the lowest (8-digit) level of the classification.


STRUCTURAL CHANGES IN THIS REVISION

The following table provides information about categories in the current IOPC that have changed in IOPC17.

ANZSIC DIVISION	Number of IOPC15	Number of IOPC17	Difference
A Agriculture, Forestry and Fishing	106	101	-5
B Mining	42	39	-3
C Manufacturing	805	471	-334
D Electricity, Gas, Water and Waste Services	11	11	0
E Construction	15	15	0
F Whole Trade	6	6	0
G Retail Trade	4	4	0
H Accommodation and Food Services	7	7	0
I Transport, Postal and Warehousing	46	43	-3
J Information Media and Telecommunications	45	43	-2
K Financial and Insurance Services	25	25	0
L Rental, Hiring and Real Estate Services	16	16	0
M Professional, Scientific and Technical Services	26	26	0
N Administrative and Support Services	18	18	0
O Public Administration and Safety	12	12	0
P Education and Training	13	13	0
Q Health Care and Social Assistance	19	19	0
R Arts and Recreation Services	24	23	-1
S Other Services	27	25	-2
Grand Total	1 267	917	-350

These changes result in the number of IOPCs being reduced by 350 (from 1267 products to 917). The majority of the aggregation affects manufacturing products (which range from IOPC 11110010 to 25991700) resulting in the number of manufacturing IOPCs being collapsed from 805 to 471.

The new classification provides a range of benefits, including:

• Aggregation of IOPCs that are redundant or insignificant (e.g. IOPC 25990020 Typewriter ribbons and ink pads and IOPC 25990060 Umbrellas).
• Aggregation of IOPCs with confidentiality concerns.
• Align IOPC with international standards.
• Allow for research, analysis and compilation of products of growing importance to the Australian economy and/or importance to provide meaningful environmental and resource analysis.

Where the scope and/or content of an IOPC has changed, the original numeric identifier assigned to that product has been retired and a new identifier assigned in IOPC17. For example, IOPC 11610080 Malt (excl malt extract) and IOPC 11610090 Malt extract have been collapsed into one new product: 11610150 Malt and malt extracts. As neither of these two products equates to the new product Malt and malt extracts, the codes have been retired and a new code 11610150 has been assigned.

The full concordance between the IOPC15 and IOPC17 is provided the datacube.


IMPLEMENTATION OF IOPC17

The IOPC17 will be implemented in the 2014-15 release of Australian National Accounts: Input-Output Tables (Product details) (cat. no. 5215.0.55.001) in late 2017. The current 2013-14 release of these tables is not affected, that is, the full 1267 product detail is published.

The proposed changes to the IOPC do not affect the I-O product group (4-digit level). Therefore, there will be no change to the detail or classification in the release of Australian National Accounts: Input-Output Tables (cat. no. 5209.0.55.001).


CONSULTATION ON IOPC17

In July this year, there was a round of consultation with key ABS stakeholders and with the members of the ABS established Input-Output User Group (IOUG). This information paper is a product of these consultations. Several changes to the original proposal have been made as a result of feedback and discussions with the IOUG.

Several IOUG members expressed views on categories that should be expanded, for example, electricity split by different electricity generation technologies and separating water supply and sewerage and drainage services. Further work will be undertaken by the ABS to assess the feasibility of expanding these categories and others identified by users of I-O tables as important for economic analysis.


PRIVACY

The ABS Privacy Policy outlines how the ABS will handle any personal information that you provide to the ABS.


INQUIRIES

The ABS would be interested in any comments you may have on the changes to the classification. If you have any inquires or comments on aspects of the review please contact National Accounts by email <national.accounts@abs.gov.au>. The deadline for feedback will be Friday 20 January 2017.


FOOTNOTE
1. The IOPC contains 805 manufactured products compared to the average of 170 products based on four leading national statistical organisations (NSOs): Statistics Canada, Statistics New Zealand, the Office of National Statistics (UK) and the Bureau of Economic Analysis (US). <back