8165.0 - Counts of Australian Businesses, including Entries and Exits, Jun 2011 to Jun 2015 
Quality Declaration
Quality Declaration ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 26/02/2016
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EXPLANATORY NOTES
12 Limiting the scope to only businesses with a GST role means that only entities which are actively trading in goods or services are included. Businesses which have not submitted a Business Activity Statement (BAS) and/or have reported zero dollar amounts over five consecutive quarters (or three consecutive years for annual remitters) are treated as 'long-term non-remitters' (LTNRs). These businesses are not considered to be actively trading and are excluded from the counts as they are not remitting GST. 13 Units contained on the ABSBR have been allocated within the following classifications:
14 Entities which are not considered to be actively trading in the market sector are not considered to be businesses and, as such, are excluded from the business counts. 15 Entities classified to the following categories of SISCA are excluded:
16 Entities classified to the following TOLO categories are excluded:
17 Entities classified to the following 4 digit ANZSIC classes are excluded:
18 The exclusion of the General Government institutional sector particularly impacts on counts for the Public Administration and Safety, Education and Training, and Health Care and Social Assistance ANZSIC divisions (O, P and Q respectively). This focuses the business counts in these divisions on private sector and public corporations activity only. 19 Most unincorporated entities (known as sole proprietors/traders) are included in the households sector. An unincorporated entity is an entity which has not become a corporation under the Corporation Act 2001. Unincorporated entities can choose to remain unincorporated, whereby the business does not possess a separate legal identity to that of its owner(s), or it can choose the limited liability status of a company where the business assets are legally separate to those of the owner(s). Some unincorporated businesses are excluded from CABEE because these are operated/controlled by other SISCA categories such as the General Government or Non-Profit Institutions Serving Households (NPISH) sectors which are out of scope of CABEE. 20 In addition, the scope for business counts includes those businesses that are yet to be coded by the ATO to an industry, sector and/or main state of operation through the Australian Business Register (ABR) new business registration process. Analysis conducted on these businesses indicates that, despite not having a complete set of characteristics data, these businesses were actively trading and also met the other scoping criteria of the collection (refer to the Conceptual and Practical Basis for Counts section for further details). It was therefore considered appropriate that they be included within scope of CABEE. 21 These actively trading businesses have been grouped together into Currently Unknown codes in the data cubes. The inclusion of these businesses in CABEE provides a more accurate annual snapshot of businesses that are actively trading in the Australian economy. 22 In June 2010, the ABS implemented a new methodology for identifying annual long-term non-remitters (LTNRs). For annual remitters, the LTNR period was increased from 5 consecutive quarters to 3 consecutive years. This change in LTNR methodology resulted in a more accurate count of active businesses, particularly in the small business sector. However, the change resulted in a noticeable and identifiable increase in business counts in June 2010. It also led to an increase in business entries, because some businesses that would have previously been excluded were brought back into scope, and therefore appeared as business entries. An estimated 20,909 of the 342,753 business entries in 2009-10 can be attributed to the new LTNR methodology, and the majority are clustered in the Non-employing size category. They are also clustered in the Households category of SISCA and the Sole Proprietors and Partnerships categories of TOLO. As such, users should exercise care when comparing June 2010 business counts and 2009-10 business entries with business counts and entries from earlier or later periods. COVERAGE 23 There are actively trading businesses which have not registered for an ABN, either because they do not have any obligations under the Goods and Services Tax (GST) legislation or are under the threshold for registration and have chosen not to register. These businesses have not been identified or quantified and are not included in counts presented in this release. COMPARABILITY WITH FRAMES FOR ABS BUSINESS SURVEYS 24 The basis for business counts in this release is broadly consistent with that used for frames in most ABS business surveys. There are two exceptions to this:
REFERENCE PERIOD 25 Counts of businesses provided in the CABEE suite of products are based on annual snapshots of the ABSBR from 30 June 2011 to 30 June 2015 (inclusive) and also reflect changes and continuity between those periods. TIME SERIES 26 While data presented in this release were produced on a broadly similar conceptual basis to data presented in previous releases, users seeking to analyse change over time should be aware that there have been methodological, classificatory, definitional, administrative and content changes across the eight releases of CABEE. Depending on the analysis being undertaken, these changes could adversely affect the comparability of CABEE data over time, and users are advised to consult the webpages of relevant releases to understand the nature and impact of such changes. 27 Users should exercise caution when comparing geographical data in this release with geographical data in releases prior to the June 2007 to June 2011 release. In 2011, the ABS implemented a new geographical framework, namely the Australian Statistical Geography Standard (ASGS) (cat. no. 1270.0.55.003). With the move to the ASGS, both national data and state based data remained unchanged. Refer to section entitled 'ASGS AUSTRALIAN STATISTICAL GEOGRAPHY STANDARD (ASGS)' for further information. 28 Users should also exercise caution when making data comparisons between this release and previous releases containing ANZSIC 1993 industry detail and annual turnover size ranges which will not be directly comparable with the data included in this release. BUSINESS EVENTS 29 This release contains snapshots of counts of active businesses at regular points in time. These data also assist in providing a point in time snapshot of those businesses that are entering and exiting the Australian economy, as well as those businesses that continue to survive. For further information, refer to Measures of Business Growth (Technical Note). 30 Business entry and exit counts are restricted to new or ceasing businesses. The movement of businesses between the profiled and non-profiled populations can also have an impact, though this is usually minor. In 2013-14, the ABS undertook some maintenance activity to improve the recording of businesses with agriculture related activity. The net impact of these movements was to increase the number of businesses operating in June 2014 by 383. This represented less than 2% of the 20,496 increase in businesses operating in June 2014 compared with June 2013. These movements inflated the 2013-14 business entry rate from 13.5% to 13.7% and the 2013-14 business exit rate from 12.5% to 12.7% because they were counted as business exits and entries. The effects of the movements were more pronounced for the Agriculture, Forestry and Fishing industry, the household sector, and partnerships, because the movements were fairly concentrated in these business subpopulations. For example, the movements reduced the decrease in Agriculture, Forestry and Fishing industry businesses during 2013-14 from 2.1% to 2.0%, increased this industry's 2013-14 business entry rate from 6.4% to 8.4%, and increased its 2013-14 business exit rate from 8.5% to 10.4%. ENTRIES 31 A business entry event is the registration of a new business for an ABN and the allocation of a GST role, or the allocation of a GST role to an existing ABN which previously did not have this role. 32 This also includes businesses which had either:
33 Thus, a business entry is defined as a business which is actively trading on the business register at 30 June in the reference year but was not actively trading at 30 June the previous year. EXITS 34 A business exit event is the cancellation of a business's ABN or GST role and/or when a business ceases to remit GST for at least five consecutive quarters in respect of that ABN (or 3 consecutive years for annual remitters). 35 Thus, a business exit is defined as a business which was actively trading on the business register at 30 June in the previous year but was not actively trading at 30 June in the reference year. 36 It is important to note that a business exit event does not necessarily equate to a business failure. There may be a number of other reasons why a business exit event has occurred, including events relating to selling a business (e.g. due to an owner/operator retiring), and events relating to changes in a business's structure (e.g. due to merger or takeover activities), etc. Such events may result in one or more business exit events occurring, and in some cases, no net loss of businesses. SURVIVALS 37 A surviving business is defined as a business which is active on the ABSBR at 30 June of the current year and was also active in the previous year. In this release, two types of survivors are recorded:
38 One of the enhancements to the business counts data in recent releases involves the provision of data which indicate the growth of business survivals (in terms of employment and annual turnover classifications) over time. For further information, refer to Measures of Business Growth (Technical Note). INTRA-YEAR ENTRIES AND EXITS 39 It is possible that a business can enter after 30 June in a given year and exit before 30 June in the following year. A small number of these instances occur in any given year. This release excludes those instances in order to assist interpretation of results. DATA QUALITY 40 The counts in this release are subject to non-sampling error and the cyclical administrative workflows of the ATO may impact on data interpretability. The counts are not subject to sampling error as they represent a complete enumeration of economically active businesses on the ABSBR. For further information on this and other likely sources of error in this release, refer to Quality Declaration - Summary. A COMPREHENSIVE COUNT OF ALL ECONOMICALLY ACTIVE ENTITIES 41 Ideally, the ABS would capture all economically active entities in Australia. These would then be split by actively trading businesses and other entities. However, it is not possible to capture all such entities accurately at this stage as there are a number of options open to these entities with regard to registration or participation in the tax system using existing data sources. Only partial coverage of these entities is possible using existing data sources and it is not possible to quantify the extent of this partial coverage. INDUSTRY 42 Each business (either an ABN unit or TAU on the ABSBR) has been classified to a single ANZSIC 2006 industry class, irrespective of any diversity of activities undertaken. The industry class allocated is the activity which provides the main source of industry value added (sales of goods and services, wages and salaries or number of employees as a proxy), which is generally based on a description provided by the business. 43 For further information on ANZSIC 2006, users may wish to consult the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (cat. no. 1292.0) on the ABS website. ASGS AUSTRALIAN STATISTICAL GEOGRAPHY STANDARD (ASGS) 44 The ASGS is the geographical framework used by the ABS. It brings together all regions for which the ABS publishes statistics within the one framework and has been used for the collection and dissemination of geographically classified statistics since 1 July 2011. 45 The ASGS replaced the Australian Standard Geographical Classification (ASGC), which is no longer produced. While there are superficial similarities between the ASGS and the ASGC, it is important to recognise that the two are fundamentally different and there are significant differences between their respective regions, both in their geographical extent and their conceptual foundation. As a whole, the ASGS represents a more comprehensive, flexible and consistent way of defining Australia's statistical geography than the ASGC. For further information to assist users move from the ASGC to the ASGS refer to the ABS website <www.abs.gov.au/geography>. 46 Since the move to the ASGS in the June 2007 to June 2011 edition of CABEE, state and territory level data have remained unchanged. However small area data have been produced using the ASGS. In terms of business counts data, the base unit of the ASGS is the Statistical Area Level 2 (SA2). This SA2 data replaced the previously published Statistical Local Area (SLA) business counts data. Refer to the section entitled 'STATISTICAL AREA LEVEL 2' for further information. MAIN STATE 47 Businesses can operate in more than one state or territory. For businesses in the non-profiled population, main state is derived from the main business address. For businesses in the profiled population, main state is the state or territory with the highest employment. Therefore, for some businesses in the profiled population, main state is not necessarily the state or territory of the main business address. 48 The Australian taxation system provides flexibility during the new business registration process, as it allows businesses operating in single or multiple states or territories to register on the ABR and report taxation obligations in a variety of ways. For instance, it is possible for a business entity to register for a single ABN regardless of the number of commercial activities it undertakes (sometimes visible in the number of physical shopfronts it may operate from). Alternatively, multiple commercial activities of a single business enterprise may be registered for separate ABNs, depending on the legal structure adopted by the enterprise. Hence, where commercial activities are carried out by a number of different but related entities, each entity may register for a separate ABN. As CABEE defines a business on the basis of an ABN (or TAU in the profiled population), the counts may be regarded as providing partial coverage of businesses in a given state. For further information, refer to Quality Declaration - Summary. STATISTICAL AREA LEVEL 2 49 SA2s are general-purpose, medium-sized areas built from whole SA1s. Their aim is to represent a community that interacts together socially and economically. SA2s are the base spatial units used to disseminate ABS business counts data and replace the previously used SLAs. In aggregate, 2,214 SA2s cover the whole of Australia without gaps or overlaps. Further, SA2 data can be aggregated to larger geographical areas, including SA3, SA4 and states and territories, as part of the ASGS. 50 Small area level data cubes will be released using SA2 as the base spatial unit. For further information to assist users with the transition from the ASGC to the ASGS refer to the ABS website <www.abs.gov.au/geography>. 51 The issues of geocoding multi location business locations are more pronounced for count data at the SA2 level, as multi location businesses (i.e. in respect of businesses registered under a single ABN/TAU) will only be attributed to a single SA2. As such, care should be taken not to assume that business counts at the SA2 level reflect all business operations within that SA2. For further information, refer to Quality Declaration - Summary. BUSINESS SIZE 52 The sizing classifications presented in this release are based on employment and turnover reported by businesses, as defined below. Measures of Business Growth (Technical Note) contains additional information on business size and how business growth is represented. EMPLOYMENT SIZE 53 The methodology used to derive the non-profiled population business counts for employment size changed in the June 2009 to June 2013 edition of CABEE to provide a more accurate representation of the size of businesses. A more detailed description of the new methodology and its effects are described in Improved Employment Range (Technical Note) in the June 2009 to June 2013 and June 2010 to June 2014 editions of CABEE. 54 Prior to the June 2009 to June 2013 release, the method used to quantify employment varied depending on where (i.e. in which population) a business resided in the ABSBR. 55 The technical definition of employing units depends upon whether the unit resides in the profiled or non-profiled population. Employing units are defined as:
56 In the profiled population, businesses report employment as defined by the number of persons who are employed by a public or private employer and receive remuneration in wages or salaries (including working proprietors and working partners), or are paid a retainer fee by their employer. Employment excludes non-salaried directors, volunteers, persons paid by commission only, and self employed persons such as consultants and contractors. These data are collected through direct contact with businesses in the profiled population and reflect a point in time headcount of current employees. 57 In the non-profiled population, payees estimates are updated monthly for those ITWs whose reported payees and/or ANZSIC has changed, and yearly for those ITWs that haven't changed throughout the past two years. The new process uses Business Activity Statement wages and salaries information and ABS survey information to bring the counts into closer alignment with the target variable (i.e. number of employees at the end of the financial year). Adjustment factors are calculated, based upon unit record differences between reported employment in ABS business surveys and information from the ATO, including payment summaries. These factors, along with payment summary information, form the inputs into the derived employment variable and, in turn, the employment size range. 58 The employment data extracted from the ABSBR are generally suitable for the purposes of attributing an employment size classification to each in-scope business. ANNUAL TURNOVER SIZE 59 Annual turnover values are based on data reported to the ATO through Business Activity Statements (BASs) and include imputation for missing periods for all businesses in the non-profiled population. For businesses in the profiled population, turnover reported in BAS for ABNs is apportioned to the relevant TAUs. 60 Where businesses report zero values on their BAS or have failed to report at all, these data are compared with auxiliary BAS data, which are then used for the purposes of assigning annual turnover values for each in-scope business. In cases where auxiliary BAS data are not available, an imputation based on auxiliary ABSBR data (including wages and salaries and employment data) is used. 61 The imputation technique described therefore classifies all in-scope businesses to a single annual turnover size range in CABEE. REVISIONS 62 The ABS Business Register receives updated information when a business entity reports changes to either the ABR or the ATO, such as a new registration, revised payee information, or when the business entity reports changes in its business structure or activity. These reporting changes can impact upon the business entity's industry classification (ANZSIC), institutional classification (SISCA), legal classification (TOLO), geographic classification (state/territory) or business size (employment or turnover categories). These changes to the register generate revisions to data previously published in earlier editions of CABEE. 63 Some of the revisions to Currently Unknown categories are attributable to updated classificatory information, such as ANZSIC, SISCA or TOLO, where this information did not previously exist for the business entity. Revisions to the Currently Unknown category can be more substantial as new information comes to hand from the ABR and the ATO. CONFIDENTIALITY 64 The confidentialising process applied is expected to maximise the availability of data without introducing any bias to the estimates. 65 The confidentiality process perturbs data in such a way that the data presented at these detailed levels will not always be additive. That is, opening stock from the beginning of the financial year, plus entries, minus exits, may not be equal to the closing stock for the end of the financial year. This is due to the fact that each of those components is individually perturbed. COMPARISON WITH OTHER BUSINESS COUNTS DATA 66 Estimates of the number of businesses operating in the Australian economy may be derived from a number of sources within the ABS or from non-ABS sources. They may relate to a point in time, or may be average annual data. These estimates will not always show the same results. Variations occur because of the differing data sources, differing definitions of a business, differing scope and coverage as well as variations due to sampling and non-sampling errors. 67 The definition of employing/non-employing in the ABS can also vary according to collection methodology, data sources, and user requirements. 68 Users comparing data from this release with other ABS data should do so with care, as some other ABS data may exclude non-employing businesses or particular industries or sectors. 69 For further details see the Explanatory Notes for the relevant data sources. PREVIOUS RELEASES 70 Information regarding previous releases of CABEE may be accessed on the ABS website. NEXT RELEASE 71 The next release of CABEE is currently scheduled for February 2017. Document Selection These documents will be presented in a new window.
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