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6261.0.55.001 - Characteristics of Wage and Salary Earners in Regions of Australia, 2000-01  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 05/03/2004   
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INTRODUCTION

1 This electronic release contains estimates of the characteristics of wage and salary earners, including age, sex, occupation and income, for the year 2000-01 for the five major regions that form the Remoteness Structure classes within the Australian Standard Geographical Classification (ASGC).

2 These data have been compiled from the Australian Taxation Office's (ATO) Individual Income Tax Return Database and are part of the Australian Bureau of Statistics' (ABS) initiative to increase the availability of regional statistics, particularly through the use of administrative information collected by other government agencies.

3 The ABS wishes to acknowledge the support the Australian Taxation Office has provided in compiling these statistics and in assisting the ABS in its aim to increase the range of regional data available to users of regional statistics. With such support the wide range of statistics published by the ABS is enhanced.


CONFIDENTIALITY

4 All individual income tax statistics provided to the ABS by the ATO have been in aggregated form only, at the Statistical Local Area (SLA) level. Information about individual taxpayers have not been released to the ABS. Data for the five Remoteness classes have been derived from the aggregated SLA data.

5 In addition, the statistics, prior to being provided to the ABS, have been subjected to a confidentiality process that randomly adjusts cells in tables with small values. This includes altering some small cells to zero. Caution should therefore be exercised in deducing that there are no people in an area with certain characteristics and, in general, no reliance should be placed on cells with small values in tables. The application of this process prevents the risk of inadvertently releasing any information that may identify an individual while, for most purposes, the overall information value of the statistics have not been impaired.


SCOPE AND COVERAGE

6 The main functions and responsibilities of the Australian Taxation Office are to administer taxation legislation and to collect a wide variety of taxes. The ATO therefore collects data from its reporting population as part of its processes to calculate income tax liability for those persons who are required to lodge an income tax return.

7 The ATO database covers all individuals who submit an individual income tax return and includes persons with income from one or more of a range of sources such as wages and salary, own business, superannuation, investments and government pensions, benefits or allowances. However, the scope of the ATO statistics presented in this electronic publication relate only to persons with wage and salary income, i.e. wage and salary earners.

8 As the ATO's income tax return is designed to obtain a person's total income from various sources over a financial year, and not the employment status of a person at a particular point in time (as is the case in ABS collections), wage and salary earners have been defined as:

persons aged 15 years and over who have submitted an individual income tax return and for whom wage and salary income was the principal (or main) source of income for the financial year.

9 Wage and salary income, as reported on the income tax return, includes gross income as shown on the 'PAYG payment summary - individual non-business' as well as allowances, commissions, bonuses, tips, gratuities, consultation fees, honoraria and other payments for services. Allowances and other earnings may include car, travel or transport allowances, allowances for tools, clothing or laundry and dirt, risk, meal or entertainment allowances. The data to define and compile counts of wage and salary earners have been sourced from questions 1 and 2 on the 2000-01 individual income tax return. (Note: PAYG (Pay as You Go) payment summaries were previously known as Group Certificates).

10 Defining wage and salary earners in this way provides an indication of the main employment status, for the financial year, of persons submitting individual income tax returns and when combined with other characteristics of wage and salary earners included on the income tax return such as age, sex, occupation and income, valuable information about employees and employment activity in regions over time can be analysed.

11 The following diagram summarises the ABS categorisation of persons reporting wage and salary income on individual income tax returns lodged with the ATO. The shaded area represents wage and salary earners based on the ABS definition as specified above.

PERSONS LODGING INDIVIDUAL INCOME TAX RETURNS, Australia, 2000-01

Chart: Persons Lodging Individual Income Tax Returns, Australia, 2000-01

(a) Persons reporting wage and salary income may also have other sources of income.


12 From the ATO database, and using data for 2000-01 as an example, the proportion of persons with wage and salary income as their principal source of income represents around 72% of all persons who lodged an income tax return with the ATO. Of those persons who reported any wage and salary income, the proportion for whom wage and salary income was the principal source was around 93%. The wage and salary income of these wage and salary earners represents over 99% of all wage and salary income reported and around 87% of the total income of all individuals reporting any wage and salary income. Similar proportions are also evident for other years.


REVISIONS TO PREVIOUS DATA

13 As part of the ongoing process of improving the overall accuracy and quality of the statistics compiled from an administrative data source, there has been a slight change in the way the definition of wage and salary earners has been specified from records on the ATO database for the years 1999-00 and 2000-01 in comparison to how it was specified for 1995-96 to 1998-99.

14 In broad terms, for 1999-00 onwards, lump sum and/or other non-regular payments have been excluded from the definition of principal source of income. These payments include eligible termination payments (ETPs), net capital gains and equalisation deposits and withdrawals, etc. This change aligns the definition more closely to international standards that define income as of a regular and recurring nature, received at annual or more frequent intervals.

15 Consequently, data for those tables which include the total number of wage and salary earners and total wage and salary income paid, for the four years 1995-96 to 1998-99, have been revised, providing a comparable time series for the whole period 1995-96 to 2000-01. The effect of this change is that the estimates of the number of wage and salary earners for the years 1995-96 to 1998-99 are slightly higher than those previously published in Experimental Estimates, Regional Wage and Salary Earner Statistics, Australia, 1995-96 to 1998-99 (cat. no. 5673.0). For example, persons receiving an ETP (i.e. question 4 on the individual income tax return in 2000-01) with a monetary value higher than that shown for wage and salary income (i.e. questions 1 and 2) would have been previously excluded from the data (i.e not a wage and salary earner). However, with this refinement, these persons may now be defined as wage and salary earners (when their wage and salary income is their main source of income over other sources). That is, the value of the lump sum and/or other non-regular payment does not override the main employment status of the individual for the financial year as defined for the purposes of these statistics.


REFERENCE PERIOD

16 The statistics compiled from the ATO database are based on individual income tax returns lodged for the financial year ended 30 June, regardless of the year in which they were processed. At the time of compiling the statistics for 2000-01 it is estimated that around 99.0% of returns had been processed.


STATISTICAL GEOGRAPHY

17 The Australian Standard Geographical Classification (ASGC) is used by the ABS for the collection and dissemination of geographically classified statistics and its use enables comparability across datasets. The ASGC is an essential reference for understanding and interpreting the geographical context of statistics published, not only by the ABS but also by other organisations.

18 This publication presents data in accordance with the Remoteness Structure contained within the Australian Standard Geographical Classification (ASGC), Volume 1, 2001 (cat. no. 1216.0).This edition of the ASGC was the first to include a geographical structure describing Australia in terms of a measurement of remoteness or distance from services. The Remoteness Structure is designed to provide for statistics which compare, on the one hand the Major Cities of Australia, to, at the other extreme, Very Remote areas. Such statistics should allow regional analysts, decision makers and service providers to quantify the differences and/or similarities across the remoteness areas of Australia.

19 The Remoteness Structure is based upon the Accessibility/Remoteness Index of Australia (ARIA) which was developed for the former Commonwealth Department of Health and Aged Care (now Department of Health and Ageing) by the National Key Centre for Social Applications of Geographical Information Systems (GISCA). ARIA measures the remoteness of a point based on the road distances to the nearest ABS defined Urban Centres (which are classified to five population class sizes). The basic premises of ARIA are that there are more services available in larger towns than small towns and that remoteness is a factor of the relative distance one must travel to access a full range of services.

20 The Remoteness Structure contains the following categories:
  • Major Cities of Australia
  • Inner Regional Australia
  • Outer Regional Australia
  • Remote Australia
  • Very Remote Australia
  • Migratory

21 As the Remoteness Structure is based on groupings of Census Collection Districts (CDs), the Migratory classification (areas composed of off-shore, shipping and migratory CDs) has been added to make the structure inclusive of all CDs in Australia. However, Migratory has been excluded from the statistics presented in this publication as people do not record these areas as their residential address when completing administrative forms such as the income tax return.

22 The Remoteness Area names used throughout this electronic publication are generally abbreviated, with 'Australia' omitted from the full title name.

23 Detailed information about the Remoteness Structure can be referenced in Information Paper: ABS Views on Remoteness, 2001 (cat. no. 1244.0) and Information Paper: Outcomes of ABS Views on Remoteness Consultation, Australia, 2001 (cat. no. 1244.0.00.001). A brief description and map is also included in the Appendix.

24 The ABS uses geographic concordances to enable the conversion of data from one type of geographic region to another. These geographic concordances are generally used to convert data for 'non-standard areas' to data for standard areas used by the ABS. Geographic concordances (or conversions) are expressed as conversion factors based on population.

25 The geographic identifier available on the ATO database is the postcode of the current home address of the individual. Consequently, postcode to SLA conversion factors have been used to concord, or convert, ATO aggregated postcode data to estimates for statistical local areas. The wage and salary earner data for SLAs was then concorded to the Remoteness Structure. The concordances are based on the estimated resident population for each particular year. Data for 2000-01 were calculated on boundaries effective at 1 July 2001 as defined in the Detailed Main Structure of the Australian Standard Geographical Classification (ASGC), Volume 1, 2001 (cat. no. 1216.0).

26 An alternative method of concording ATO wage and salary earner data would have been to concord ATO aggregated postcode data directly to the Remoteness Structure. However, the difference between applying the two methods is not significant.

27 Concording data for small geographic areas such as postcodes to larger geographic areas such as SLAs and Remoteness Areas:
  • minimises confidentiality restrictions as data are not output for postcodes with small populations;
  • enables the data to be more easily compared with standard ABS output;
  • enables the data to be output for other standard ABS geographic areas such as statistical divisions (SD), statistical subdivisions (SSD), local government areas (LGA), and in the case of the data presented here, Remoteness Structure classes; and
  • provides flexibility so that data can be provided for the different regions of interest being studied by users of regional data (which are usually groupings of SLAs and/or LGAs).

28 When analysing the statistics the following limitations of the concordance methodology need to be taken into account:
  • in applying the concordances it is assumed that the particular characteristics of any data item are uniformly distributed across a postcode and therefore concorded data may not truly reflect the distribution of the characteristics of the population.
  • some official postcodes (e.g. PO boxes, etc.) do not correspond to residential areas but have still been reported under the current home address field. Data for these and other ‘invalid’ postcodes, such as those due to incorrect reporting or processing errors, have been included in an ‘unknown’ category for each state and territory and for Australia where the state or territory was not known.
  • Data that could not be directly classified to one of the Remoteness Structure classes have been excluded from most tables. The effect of this is not significant as the population in the unknown category accounts for less than 0.6% of all persons.
  • concorded figures have been rounded so discrepancies may occur between sums of the component items and totals.

29 Further information concerning statistical geography is contained in Australian Standard Geographical Classification (ASGC), Volume 1, 2001 (cat. no. 1216.0). A map showing the remoteness areas is available in the Appendix.


CHARACTERISTICS OF WAGE AND SALARY EARNERS

30 The characteristics of wage and salary earners covered in this publication include age, sex, occupation and wage and salary income. Wage and salary income has been presented as a median as well as in income ranges. Various cross-tabulations (e.g. age by sex, occupation by age, etc.) are also referenced throughout the publication, however detailed tables, including data for each state and territory by Remoteness Area can be accessed through the data cubes. These tables are in the form of Excel spreadsheets. A complete list of the data definitions and classifications are included in the Glossary.


COMPARABILITY OF RESULTS WITH ABS COLLECTIONS

31 The following diagram summarises the basic components of the employed population in Australia, as defined in ABS collections. Wage and salary earners, or employees, comprise around 86% of all employed persons and as such make a major contribution to the labour market. The shaded area shows the component that the wage and salary earner estimates from ATO data attempt to represent.

ABS CATEGORIES OF EMPLOYED PERSONS(a), Australia, May quarter 2001

Chart: ABS Categories of Employed Persons, Australia, May quarter 2001
(a) Persons aged 15 years and over.
Source: ABS Labour Force Survey


32 Where possible the wage and salary earner estimates compiled from the ATO database have been compared with other ABS data sources such as the Census of Population and Housing, the Labour Force Survey and the Survey of Employment and Earnings. These comparisons provide a means for establishing whether counts are of an ‘expected’ magnitude and whether distributions across variables or regions are similar. Despite differences in purpose, concepts, definitions and reference periods, the statistics compiled from the ATO database have been found to be generally consistent in broad magnitude when compared with these other data sources. A summary of some of these comparisons are included in the previously published Information Paper: Use of Individual Income Tax Data for Regional Statistics, Experimental Estimates for Small Areas, 1995-96 and 1996-97 (cat. no. 5673.0) and in the accompanying appendix to Regional Wage and Salary Earner Statistics, Australia, 2000-01, Electronic Publication (cat. no. 5673.0.55.001).


INDIGENOUS COMMUNITY DEVELOPMENT EMPLOYMENT PROJECTS

33 The statistics presented in this electronic publication relate primarily to the year 2000-01. Although data are available on a similar basis for 1995-96 to 1999-2000, changes to the treatment of persons reporting Community Development Employment Project (CDEP) income in individual income tax returns have possibly produced variations in the levels of some data items, particularly for Remote and Very Remote areas. CDEP enables Indigenous persons to exchange unemployment benefits for opportunities to undertake work and training in their communities.

34 From 1998-99 onwards, specific instructions were included in the ATO TaxPack regarding the treatment of CDEP payments. These instructions indicated that amounts paid from CDEP should be included under the category 'Commonwealth of Australia Government Allowances or Payments'. Prior to 1998-99 such an instruction was not included in TaxPack and, as CDEP income was generally shown on group certificates as 'CDEP Salary or Wages', it is probable that CDEP income was included under the wages and salaries category for previous years.

35 While Indigenous persons reside and work in all regions of Australia, the number of Indigenous persons in Remote and Very Remote areas relative to the total population means that the impact of these changes to the definition of wage and salary earners adopted for these data is significant for these areas.

36 The exclusion of CDEP income from 1998-99 onwards is more than likely responsible for the observable large decrease in the number of wage and salary earners and conversely the upward movement in the average annual wage and salary income for Very Remote areas. The Independent Review of Aboriginal and Torres Strait Islander Commission's (ATSIC) CDEP Scheme, conducted in 1997, recognised that CDEP provided mostly low-paid and part-time work. ATSIC Annual Reviews in 1997-98 and 1998-99 reported that 96% of CDEP recipients were located in regional Australia (i.e. outside of metropolitan areas) with 65% being located in remote areas (which would mostly equate to Very Remote Australia in the Remoteness Structure). The annual reviews indicated that CDEP wages in remote areas were around $195 per week. The increased number of persons included as wage and salary earners combined with the low wages and salaries paid has consequently had the effect of lowering the overall average and median incomes for Very Remote areas.

37 The following graphs highlight the effect of these changes in reporting practices with the treatment of CDEP participants. It is expected that the statistics from 1998-99 onward provide a truer and more consistent reflection of the data in these regions. Any comparisons between 1997-98 and 1998-99 and 1995-96 and 2000-01 in particular need to be treated with caution.


NUMBER OF WAGE AND SALARY EARNERS,
Very Remote Areas, 1995-96 to 2000-01
AVERAGE WAGE AND SALARY INCOME, by Remoteness Area,
1995-96 to 2000-01
Graph: Number of Wage and Salary Earners, Very Remote Areas, 1995-96 to 2000-01
Graph: Average Wage and Salary Income, by Remoteness Area, 1995-96 to 2000-01

Source: ATO Income Tax Data.


OTHER CAVEATS

38 In addition to the methodological and definitional issues already mentioned (such as the number of wage and salary earners defined over a whole financial year rather than at a point in time, use of postcode concordances and the randomisation of small cells) some other limitations need to be taken into account when analysing the data. For example,
  • a number of low income earners, including wage and salary earners, are not required to submit a tax return and therefore may not be included in the statistics. For example, where income is below the annual tax free threshold and tax was not withheld, a return is not required to be submitted to the ATO. (Note: The tax free threshold was $5,400 for 1995-96 to 1999-00 and $6,000 for 2000-01);
  • the data do not take account of whether wage and salary earners worked on a full-time or part-time basis, had overtime earnings or had multiple job holdings. Consequently, these factors may account for some of the differences when comparing average or median wage and salary incomes or other characteristics of wage and salary earners across regions. It should also be noted that the wage and salary data exclude persons in their own business (e.g. farmers), so do not represent total employment in a region;
  • some persons may move address over the course of a year and consequently their wage and salary income may not all relate to the current home address or postcode area (and therefore the SLA/Remoteness area) as reported on the income tax return;
  • generally, around 95.0% of individual income tax returns for any income tax year have been processed within one year and around 99% within two years of the end the income tax year. It may be possible that a very small proportion of returns had not been processed at the time that these statistics were compiled and therefore those records would not be included in the estimates presented. No attempt has been made to estimate or revise the data for any records submitted to the ATO after these statistics have been compiled. Note: Data for 2000-01 were compiled in August 2003, around twenty four months after the end of the 2001 income tax year.

39 Overall, the limitations outlined above are considered to be relatively minor factors which do not limit the general use of the data for the broad purposes intended.


ROUNDING

40 Due to the application of both the postcode concordance and the randomisation process, totals for each variable and geographic area may differ from table to table. Concorded figures have been rounded while column and row totals have been derived after the random adjustment process has been applied. The random adjustments have been made only to very small cells, however, the more detailed a table is, the greater the likelihood of small cells being present. The randomisation of small cells has only been applied at the SLA level and for most purposes the value of the data has not been impaired. Differences in totals between tables are not significant and can be ignored.

41 Furthermore, where figures have been rounded, discrepancies may occur between the sums of the component items and totals. Proportions and rates have been calculated on rounded figures and may differ slightly if calculated on the unrounded numbers.


RELATED PUBLICATIONS

42 Users may wish to refer to the following ABS and non-ABS products which contain statistics relating to wage and salary earners and/or other statistics compiled from Australian Taxation Office data.

Australian Bureau of Statistics, Information Paper, Use of Individual Income Tax Data for Regional Statistics - Experimental Estimates for Small Areas, 1995-96 and 1996-97, cat. no. 5673.0

Australian Bureau of Statistics, Experimental Estimates, Regional Wage and Salary Earner Statistics, Australia, 1995-96 to 1998-99, cat. no. 5673.0

Australian Bureau of Statistics, Regional Wage and Salary Earner Statistics, Australia, 2000-01, Electronic Publication, cat. no. 5673.0.55.001

Australian Bureau of Statistics, Information Paper, Use of Business Income Tax Data for Regional Statistics - Experimental Estimates, Selected Regions, Australia, 1995-96 to 1997-98, cat. no. 5675.0

Australian Bureau of Statistics, Experimental Estimates, Regional Small Business Statistics, Australia, 1995-96 to 2000-01, cat. no. 5675.0

Australian Bureau of Statistics, Labour Force, Australia, cat. no. 6203.0.

Australian Bureau of Statistics, Labour Force Survey, Australia, data cubes.

Australian Bureau of Statistics, Wage and Salary Earners, Australia, cat. no. 6248.0.

Australian Bureau of Statistics, 1996 and 2001 Census of Population and Housing.

Australian Bureau of Statistics, Australia in Profile, A Regional Analysis, 2001 Census of Population and Housing, cat. no. 2032.0.

Australian Taxation Office, Taxation Statistics, a summary of taxation and superannuation statistics, annual, ATO Canberra.


FURTHER INFORMATION

43 For further information about these statistics, contact the National Information Service on 1300 135 070, or Mark Nowosilskyj on: (08) 8237 7358 or email mark.now@abs.gov.au


SYMBOLS AND OTHER USAGES

ABSAustralian Bureau of Statistics
ASGCAustralian Standard Geographical Classification
ATOAustralian Taxation Office
CDEPCommunity Development Employment Project
ETPeligible termination payment
IRInner Regional
LGAlocal government area
MCMajor Cities
OROuter Regional
PAYGpay as you go
POpost office
RRemote
SDstatistical division
SLAstatistical local area
SSDstatistical subdivision
VRVery Remote
$bbillion dollars
$mmillion dollars
-not applicable or figure not calculated


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