Concepts for the ICT satellite account

23.108    The concepts for the ICT satellite account were consistent with the ASNA and are outlined below.

23.109    The value of ICT output was the market value of ICT goods and services produced within Australia. ICT output may be produced by units in any industry, though in practice the great majority of ICT output was produced by a small number of industries.

23.110    Capital goods produced on own account for own use were valued according to their estimated market value, or, if this was not possible, on the basis of production costs; that is, the value of labour and non-labour costs, and consumption of fixed capital used to produce the capital good. There are two significant ICT-related items of capital work produced on own account - own account computer software and own account production of telecommunication assets. The latter item relates wholly to telecommunication service providers and comprises the physical infrastructure required to put various telecommunication equipment in place (e.g. construction of mobile phone towers). All industries engage in producing computer software on own account.

23.111    ICT gross value added at basic prices was measured as the value of output of ICT goods and services less the value of intermediate consumption inputs used in producing these ICT products. ICT gross value added is comparable with estimates of the gross value added of conventional industries such as mining and manufacturing as presented in the ASNA.

23.112    ICT GDP, on the other hand, measured the gross value added of the ICT industry at purchasers' prices. It therefore included taxes (less subsidies) on ICT related products. ICT GDP has a higher value than ICT gross value added.

23.113    ICT GDP was a construct to allow comparison with the most widely recognised national accounting aggregate, GDP. While it is useful in this context, the ICT gross value added measure should be used in comparisons with other industries and between countries. There is no generally accepted way to allocate deductible taxes such as GST to industry, and substantially different results can be obtained for industry GDP depending on the method chosen. This is a further reason for gross value added to be the preferred measure for industry comparisons.

23.114    ICT investment was gross fixed capital formation plus changes in inventories relating to ICT products. 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 from processes of production, and that are themselves used repeatedly or continuously in other processes of production over periods of time exceeding one year

23.115    Government final consumption expenditure is current expenditure by general government bodies on services to the community such as defence, public order and safety. Because these are provided free of charge or at prices 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 is valued in the national accounts at its cost of production. In 2002-03, general government bodies in Australia did not produce any market output that could be considered ICT in nature and therefore government final consumption expenditure on ICT products was estimated as zero.

23.116    Current expenditure by general government bodies on such things as telecommunication services and computer services was treated as intermediate consumption by these units.