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8139.0 - Norfolk Island Business Statistics, 2004-05  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 27/06/2006   
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TECHNICAL NOTE DATA QUALITY


RELIABILITY OF THE ESTIMATES

1 The estimates in this publication are based on a census of all known private sector businesses operating on Norfolk Island during 2004-05. As such, the estimates are not subject to sampling error, but non-sampling errors may occur.


2 Non-sampling errors may arise as a result of errors in the reporting, recording or processing of the data. These errors can be introduced through inadequacies in the questionnaire, the treatment of non-response, inaccurate reporting by respondents, and errors in data entry and processing. It is difficult to measure the size of non-sampling errors. However, every effort was made in the design, development and operation of this survey to minimise their effects.


3 Scope and coverage issues have been mentioned in paragraphs 2 to 5 of the Explanatory Notes above. While it is believed that a very high level of coverage of Norfolk Island private sector businesses was achieved, it is possible that some businesses were not contacted by ABS officers. This could have been due to one of two factors, viz
(a) the business did not have an entry in the 2005-06 Norfolk Island yellow pages telephone directory and did not have a registered business name, or
(b) because of the limited timeframe of the collection (2 weeks from 1 May 2006), ABS officers may not have been able to make contact with business representatives e.g because the principals of the business may have been "off island" for the period or it was genuinely not possible to have made contact in the period.


4 For category (a) businesses, no data have been recorded in the survey estimates. Where ABS officers were satisfied that category (b) businesses operated during the year ended June 2005, estimated data were included for them in the statistics.


5 Data items collected
(i) for the year ended June 2005

Income items
Income from sales of goods and services
Other income
Total income


Expense items
Wages and salaries paid to employees (including provisions for employee entitlements)
Employer contributions into superannuation
Workers' compensation premiums/costs
Purchases
Insurance premiums
Rent and leasing expenses for land and buildings
Interest expenses
Depreciation
All other operating expenses (including levies and charges)
Total expenses

Net operating profit or loss

Employment during the last pay period in June 2005
Working proprietors and working partners of unincorporated businesses
Full time employees
Part time employees
Total employment


(ii) for the year ended December 2005
Total income
Wages and salaries paid to employees
Employment during the last pay period in December 2005 (using the same dissection as for June 2005)


(iii) Supplementary questions
Do you or your accountant maintain electronic accounting records for your business?
An attitudinal question asking whether the business' turnover had increased or decreased in the March quarter 2006 compared to March quarter 2005 and by how much (within specified ranges)
Employment during the survey fortnight (i.e May 2006).


QUALITY OF REPORTING

6 As there had been no legal requirement for the majority of Norfolk Island businesses to maintain detailed accounting records, it had been anticipated that a significant amount of estimation would have been needed for the ABS forms to be completed. While this turned out to be the case for a high proportion of businesses in some industries (such as Construction), many businesses maintained detailed profit and loss accounts for the 2004-05 accounting period and were able to complete the ABS form with little difficulty. A relatively small number of businesses prepared their accounts on an other than June year basis - generally, the "off-June" year reporting was accepted and was thought to have a minimal effect on statistical aggregates.


7 53% of businesses reported that they did maintain electronic accounting records. Of these, 62% of businesses in "tourism-related" industries (i.e Retail, Accommodation and Food Services, and Travel Agency and Tourism Arrangement Services) and 42% in other industries had electronic accounting records.


8 There were few individual data items in respect of the year ended June 2005 data that caused concern for the information providers. Some comments on specific items are:

    Wages and salaries - some respondents initially included the drawings of working proprietors and working partners in this item. In the vast majority of cases, ABS staff were able to identify that reporting and amend reported data.
    Purchases - many businesses that maintained electronic accounting records had reported cost of goods sold i.e. purchases plus change in inventories and not purchases. This was accepted as a reasonable proxy for purchases by these businesses.
    Depreciation - many businesses did not report a value for Depreciation. Accordingly, the data for Depreciation shown in Table 2 would not be reflective of the true value of depreciation of assets.
    Rent and leasing expenses - in this survey, the use of the "business unit" (akin to a physical location) as distinct from a legal entity basis, introduced some complexities and confusion for reporting of this item. Also, there were a significant number of instances where rent and leasing expenses could not be dissected between business and home activity. Reported Rent and leasing expenses are not published separately but are included in Other expenses.

9 Table 1 shows 1,267 persons (including working proprietors and partners) employed at the end of June 2005. It needs to be recognised that there is a significant degree of multiple-job holding, as well as multiple-"business" ownership on the Island; i.e a person will be counted for each job held and as such the employment estimate does not represent the number of employed persons.


10 There was a special treatment in this survey for businesses operating as cost centres (e.g banks). In such cases all income is not generally recorded. For the purposes of this survey, the income of these businesses has been made to equal their total expenses i.e a nil profit/loss has been recorded.



QUALITY OF INDUSTRY ESTIMATES

11 The quality of the industry data will vary from industry to industry depending on the response obtained for each industry and the availability of accounting records. It does need to be recognised that the overall response rates for a voluntary survey of this type are very high.


12 A "response" was recorded where at least key data (i.e income, total expenses, wages and employment) were provided directly or could be derived. Under that definition the response rates achieved by published industry and the contribution of reported data to final estimates were:

Response (no. of units)
Reported income (% of total)
Industry
%
%

Agriculture, forestry & fishing
84
68
Mining, manufacturing & construction
81
90
Retail trade
83
94
Accommodation
98
97
Cafes, restaurants & takeaway food services
83
95
Clubs (Hospitality), pubs, taverns & bars
100
100
Total, Accommodation & food services
93
96
Travel agency & tourist arrangement services
64
96
All other industries
82
95
Total all industries
85
94



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