Appendix 2: List of classifications

The Australian Bureau of Statistics (ABS) uses many international and local classification systems. The availability and nature of the data will also affect the design of a classification system. In the price index context, the availability of value data will dictate the lowest level of detail that might be possible. Although a classification may be conceived according to economic theory or user requirements using a top-down approach, in application the ABS collects data about individual products and then aggregates them according to the classification structure (i.e. a bottom-up approach).

In application, products used in the compilation of the Australian Producer Price Indexes (PPIs) and International Trade Price Indexes (ITPIs) can be classified according to more than one classification structure.

The Australian and New Zealand Standard Industrial Classification (ANZSIC) was been developed for use in the compilation and analysis of industry statistics in Australia and New Zealand. The Australian Bureau of Statistics and Statistics New Zealand jointly developed this classification to improve the comparability of industry statistics between the two countries and with the rest of the world.

This 2006 edition of the ANZSIC replaces the 1993 edition, which was the first version produced. Prior to then, Australia and New Zealand developed separate standard industry classifications. ANZSIC 2006 reflects the outcomes of a substantial review of the classification, which included extensive consultation with users of the classification, such as government agencies responsible for policy formulation and administration, and non-government analysts of industry structure and performance. The purpose of the review was to ensure that the classification remained current and relevant, reflecting the changes that have occurred in the structure and composition of industry since the previous edition and recognising changing user requirements for data classified to industry. The conceptual framework underpinning the ANZSIC has been more rigorously and consistently applied in this edition. The publication includes detailed explanations of the classification principles and the treatments of certain types of activities. International comparability has been enhanced by aligning the classification, as far as possible, with the International Standard Industrial Classification of All Economic Activities (ISIC) (Revision 4).

ANZSIC 2006 (Revision 2.0) is used for three purposes in the production of Australian PPIs and ITPIs. First, in both the output and stage of production price indexes it is used to classify the industry of a producer of a given product (in an industry-of-origin role). Second, for input price indexes, ANZSIC 2006 is used to classify the industry of a purchaser of a given product (in an industry-of-consumption role). Third, for imports, in both the Import Price Index and the Stage of Production PPIs, ANZSIC 2006 is used to identify a domestic competing industry of origin.

The main purpose of the Australian Statistical Geography Standard (ASGS) is for collecting and disseminating geographically classified statistics, which are statistics with a 'where' dimension. This classification system provides six hierarchies of geographical areas, with each structure designed to suit different statistical purposes. Several Australian PPIs use the top levels of the main structures of the ASGS, in particular the State and Territory level and the Greater Capital City Statistical Area (GCCSA) level. The price index of Input to the House construction industry in particular is restricted in scope to the six state capital cities, as defined within ASGS. This price index measures prices in the capital city in which the products are purchased. The Australian Statistical Geography Standard (ASGS) replaced the previously used Australian Standard Geographical Classification (ASGC) and became the Australian Bureau of Statistics' sole geographical framework effective from July 2011.

Standard International Trade Classification (SITC) is the United Nations recommended trade classification for international statistical purposes. The SITC groups products according to the level of manufacturing that the products have undergone; that is SITC is a degree of transformation classification. The ABS uses the SITC as its primary classification for the publication and dissemination of both broad level international trade statistics and the international trade price indexes. The design (structure) of the import price index is based on SITC.

The HS is a broad classification system used to classify internationally traded products as they enter or leave a country. Product codes can be determined according to their form and function. It was developed by, and is maintained by, the World Customs Organisation (WCO). It has been adopted by most trading nations including Australia, as it enables information on traded products to be compared internationally.

All goods imported into Australia since 1 January 1988 have been classified according to the ten-digit HTISC. The first six digits of the code are taken from the Harmonized System (HS), with the seventh and eighth digits added by Customs to allow for different rates of duty applied to particular goods. The ninth and tenth digits (statistical codes) are added by the ABS to satisfy Australian statistical requirements, and, in some instances, the information needs of regulatory or supervisory agencies which are able to access the records from Customs.

HTISCs provide the most detailed breakdown of imported goods and are used to analyse imports of particular commodities. Customs has responsibility for maintaining the HTISC documentation, and distributes replacement pages containing any recent classification amendments to users.

The detailed classification can be found in the Combined Australian Customs Tariff Nomenclature and Statistical Classification (1996) (Customs Tariff).

The Australian Harmonized Export Commodity Classification (AHECC) is designed for use by exporters, customs brokers and freight forwarders in the classification of goods when providing export declarations to the Australian Customs Service, and to assist users interpret export statistics published by the Australian Bureau of Statistics (ABS).

The classification is based on the six digit international Harmonized Commodity Description and Coding System (HS) developed by the World Customs Organization (WCO) for describing internationally traded goods. The ABS extends the six digit international HS by two digits to provide a finer level of detail to meet Australian statistical requirements (Statistical codes).

As the input-output system describes the production and subsequent use of all products, the Input-Output Product Classification (IOPC) needs to be defined in terms of characteristic products of industry sectors. The structure of the IOPC therefore arises from its industry-of-origin basis. In an industry-of-origin classification, each product is shown according to the industry in which it is primarily produced. Thus, the structure of the IOPC consists of industry-of-origin headings with detailed products shown under each heading. The overall principles for the preparation of such an industry-of-origin product classification are: 

• Homogeneity of inputs - each product or product group should consist of products that have similar input structures or technology of production. This principle is generally applied through the definition of each IOPC item in terms of the ANZSIC industry sector in which it is mainly produced
• Homogeneity of disposition - each product or product group, having satisfied the first criterion, should consist of products that have similar patterns of disposition or usage. This principle is applied by reference to the description of source data and information about the transport, distribution, and product taxation margins applying to particular products.

The IOPC plays an important role in both the input and output PPI’s as the basis of classification of all individual products. The IOPC are consistent with ANZSIC 2006 and are identified by an 8 digit code. The first four digits typically refer to the primary ANZSIC class and the last 4 digits to the product number.

This classification system groups products according to their main end use, namely capital goods, intermediate goods, and consumption goods. The Classification by Broad Economic Categories (BEC) was designed as a means for converting data compiled in terms of SITC, into end-use categories. These categories are aligned as far as practicable with the System of National Accounts (SNA) framework. The BEC classification is used for economic analysis of international merchandise trade statistics, and the ITPI, and it facilitates the use of these data in conjunction with other national and international economic statistics.