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8226.0 - Electricity, Gas, Water and Waste Services, Australia, 2006-07 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 09/07/2008   
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EXPLANATORY NOTES


INTRODUCTION

1 This publication, Electricity, Gas, Water and Waste Services, Australia, 2006-07 (cat. no. 8226.0), presents estimates of the economic and financial performance of these industries.

2 These industries, as specified in Division D Electricity, gas, water and waste services of the Australian and New Zealand Standard Industrial Classification (ANZSIC) (cat.no.1292.0), 2006 edition ('ANZSIC06'), comprise:

  • Electricity supply (ANZSIC Subdivision 26), which relates to the generation, transmission or distribution of electricity, and the on selling of electricity via power distribution systems operated by others
  • Gas supply (ANZSIC Subdivision 27), which relates to the distribution of gas, such as natural gas or liquefied petroleum gas, through mains systems
  • Water supply, sewerage and drainage services (ANZSIC Subdivision 28), which relates to the bulk storage, purification or distribution of water, or the operation of sewerage or drainage systems, including sewage treatment plants
  • Waste collection, treatment and disposal services (ANZSIC Subdivision 29), which relates to the collection and haulage (except long distance) of domestic, commercial or industrial solid, liquid or other waste (except through sewerage systems).

3 This publication represents the first release of these estimates using the 2006 edition of ANZSIC. Because of the combined effect of this new classification and methodological changes, a new series has commenced with the 2006-07 data. See Technical Note 1 for further details.


SCOPE

4 The electricity, gas, water and waste services industry collection is conducted annually as a component of the ABS's Economic Activity Survey (EAS). The scope of the 2006-07 electricity, gas, water and waste services industry collection comprises all businesses (including non-employing businesses) on the ABS Business Register (ABSBR) at time of selection, whose industry is classified to ANZSIC (2006 edition) Division D Electricity, gas, water and waste services. For most industries, entities classified to the general government institutional sector are excluded. However, such entities are included in the scope of the survey of the Water supply, sewerage and drainage services subdivision. However, some categories of business are excluded. The ABSBR includes information supplied from the Australian Taxation Office (ATO) which assists in determining the scope of ABS collections. Using this, businesses in the following two categories have been excluded from the scope of this collection with effect from 2006-07 (although they were included in previous years):
  • businesses which have an Income Tax Instalment Provision (ITIP) taxation 'role' but no other taxation role;
  • long term non-remitters of Business Activity Statement (BAS) data.

5 In addition, entities classified to the general government institutional sector are included in the scope of the survey of the water supply industry only. They are excluded for all other industries.

6 Division D comprises the following subdivisions and their component groups and classes: 26 Electricity Supply 261 Electricity Generation 2611 Fossil Fuel Electricity Generation 2612 Hydro-Electricity Generation 2619 Other Electricity Generation 262 Electricity Transmission 2620 Electricity Transmission 263 Electricity Distribution 2630 Electricity Distribution 264 On Selling Electricity and Electricity Market Operations 2640 On Selling Electricity and Electricity Market Operations 27 Gas Supply 270 Gas Supply 2700 Gas Supply 28 Water Supply, Sewerage and Drainage Services 281 Water Supply, Sewerage and Drainage Services 2811 Water Supply 2812 Sewerage and Drainage Services 29 Waste Collection, Treatment and Disposal Services 291 Waste Collection Services 2911 Solid Waste Collection Services 2919 Other Waste Collection Services 292 Waste Treatment, Disposal and Remediation Services 2921 Waste Treatment and Disposal Services 2922 Waste Remediation and Materials Recovery Services

7 Statistics in this publication are presented by chapter for each of ANZSIC Subdivisions 26 Electricity supply, 27 Gas supply, 28 Water supply, sewerage and drainage services, and 29 Waste collection, treatment and disposal services.


STATISTICAL UNITS USED

8 Statistical units are those entities from which statistics are collected, or compiled. In ABS economic statistics, the statistical unit is generally the business. All businesses are recorded on the ABS Business Register (ABSBR).

9 The ABS uses an economic statistics units model on the ABSBR to describe the characteristics of businesses, and the structural relationships between related businesses. Within large and diverse business groups, the units model is used also to define reporting units that can provide data to the ABS at suitable levels of detail.

10 This units model allocates businesses to one of two sub-populations:
  • Most businesses and organisations in Australia need to obtain an Australian Business Number (ABN). The vast majority of these businesses are simple in structure and are allocated to the population which is maintained by the ATO. These are termed (by the ABS) ABN units.
  • The remaining businesses are in the ABS maintained population, and are termed type of activity units, or TAUs.

11 Together these two sub-populations (of ABN units and TAUs) make up the ABSBR population, from which the samples are taken.

12 For details about the ABSBR and how ABN units and TAUs contribute to the industry statistics in this publication, see Technical Note 1.


COVERAGE

13 The frame used for the survey of the electricity, gas, water and waste services industry, like most ABS economic surveys, was taken from the ABS Business Register. The ABS Business Register is updated monthly to take account of new businesses and businesses which have ceased operating.

14 The ANZSIC-based industry statistics presented in this publication are compiled differently from activity statistics. Each ABN unit or TAU on the ABSBR has been classified (by the ATO and the ABS respectively) to a single industry irrespective of any diversity of activities undertaken. The industry class allocated is the one which relates to those activities that provide the main source of income. For example, a business which derives most of its income from electricity generation activities would have all operations included in the aggregates and ratios for Electricity supply, even if significant secondary activities (such as water supply, coal mining, or retailing) are also undertaken. However, where a business makes a significant economic contribution to different ANZSIC industries, the ABS includes the business in the ABS maintained population, and 'splits' the TAU's reported data between the industries involved. Significance is determined using total income.

15 Some electricity is generated by businesses mainly engaged in other activities (e.g. manufacturing) solely, or in part, to provide power for those activities. Such electricity generation is not treated as part of the electricity supply industry and, therefore, does not contribute to these statistics.

16 Businesses mainly engaged in the distribution of liquefied petroleum gas in bulk or in containers are not treated as part of the gas supply industry, as they are classified to ANZSIC Division F Wholesale trade.

17 The ABS maintained population of the ABSBR includes all organisations classified to the general government sector according to the Standard Institutional Sector Classification of Australia (SISCA). Where a general government authority operates a number of business units, each coinciding with a 'division' or 'line of business' with separate and comprehensive accounts, then each of these business units is recorded as a separate TAU on the ABSBR. Each TAU is then classified by industry according to its predominant activity. Such TAUs classified to the Water supply, sewerage and drainage services subdivision are then in scope of the electricity, gas, water and waste services industry collections. For example, a local government council might be recorded on the ABSBR as comprising four separate TAUs covering its general services, electricity supply, water supply, and sewerage operations. The water and sewerage TAUs are in scope of the collection, but the other TAUs are not.

18 Prior to recent industry reforms, the electricity supply industry was largely vertically integrated, i.e. the activities of generation, transmission and distribution of electricity were conducted within a single business. After restructuring following the industry reforms, these activities are now more often conducted by separate businesses. This means, for example, that the sale of electricity may be recorded by both the generator and the distributor. The gas supply industry has undergone similar reform and restructuring.

19 Unincorporated joint ventures (UJVs) are arrangements which allow the sharing of expertise, resources and risk associated with specific projects. This occurs through the participation of a number of organisations (by investment) in a specific operation (e.g. a power station). Some of these organisations may not otherwise be involved in that industry.

20 The electricity, gas, water and waste services industry collection includes such businesses which are operators and/or participants in any UJVs. Generally, each participant supplies data of its share of income, while the operator reports all expenses and employment.

21 The ABS attempts to maintain a current understanding of the structure of the large, complex and diverse business groups that form the ABS maintained population on the ABSBR, through direct contact with those businesses. Resultant changes in their structures on the ABSBR can affect:
  • the availability of such businesses (or units within them) for inclusion in the annual economic collections
  • the delineation of the units, within those groups, for which data are to be reported.

22 The ABS attempts to obtain data for those businesses which ceased operation during the year, but it is not possible to obtain data for all of them.


IMPROVEMENTS TO COVERAGE

23 Data in this publication have been adjusted to allow for lags in processing new businesses to the ABSBR. The effects of these adjustments on Australian estimates of sales and service income are:
  • for Electricity supply, an increase of 0.2%
  • for Gas supply, an increase of 0.1%
  • for Water supply, sewerage and drainage services, an increase of 0.3%
  • for Waste collection, treatment and disposal services, an increase of 1.6%.


ANZSIC93 AND ANZSIC06

24 The estimates in this publication are based on ANZSIC06. Data in previous issues were based on the 1993 version of the ANZSIC (ANZSIC93). ANZSIC06 was adopted to provide a more contemporary industrial classification system, taking into account issues such as changes in the structure and composition of the economy, changing user demands and compatibility with international classification standards.

25 All businesses formerly coded to ANZSIC93 Division D Electricity, gas and water supply are classified to ANZSIC06 Division D, named Electricity, gas, water and waste services. In addition, Waste collection, treatment and disposal services, which was not in scope of the 2005-06 survey, is in scope of the 2006-07 survey, as these services are now classified to ANZSIC06 Division D. Activities covered by ANZSIC06 Subdivision 29 were previously classified to ANZSIC93 Classes 9634 Waste disposal services (Division Q) and 4259 Construction services (Division E), and were in scope and collected as part of the economy wide Economic Activity Survey.


HISTORICAL COMPARISONS

26 To provide comparability with the 2006-07 estimates, the historical estimates presented in Table 1.1 take into account the various changes in collection design, estimation methodology and scope, as well as the introduction of ANZSIC06. Data collected for 2004-05 and 2005-06 (under ANZSIC93) have been updated to take account of any revisions to the data since they were published in the previous issue of this publication. The data so revised have then been mapped to ANZSIC06, and further adjusted to incorporate the scope changes outlined in paragraph 4 above and the methodological changes described in Technical Note 1 (paragraphs 9-20). This process is known as 'bridging'.


SURVEY SAMPLE DETAILS

27 The electricity, gas, water and waste services industry collection is conducted annually as a component of the ABS's Economic Activity Survey:
  • A sample of 628 electricity, gas, water and waste services industry businesses were asked by the ABS to provide employment details and data obtained from their financial statements, mainly via mail out questionnaires. (The sample comprised all businesses classified to the electricity and gas supply industries and which were above certain cutoffs (see Technical Note 1); and a sample of businesses classified to the water and waste services industries.)
  • Auxiliary information about wages and salaries and turnover for 5,706 electricity, gas, water and waste services industry businesses, sourced from Australian Tax Office (ATO) Business Activity Statement (BAS) data, were used to improve the estimates produced from the survey data. Some of these businesses were among those selected in the survey. Section 16(4)(ga) of the Income Tax Assessment Act 1936 provides for the ATO to pass information to the Australian Statistician for the purposes of the Census and Statistics Act 1905.


REFERENCE PERIOD

28 The period covered by each collection is, in general, the 12 months ended 30 June. Where businesses are unable to supply information on this basis, an accounting period for which data can be provided is used for data other than that relating to employment. Such businesses make a substantial contribution to some of the estimates presented in this publication. As a result, the estimates can reflect trading conditions that prevailed in periods outside the twelve months ended June in the relevant year.

29 It should be noted that, although financial data estimates relate to the full twelve months, employment estimates relate to the last pay period ending in June of the given year. As such, estimates of wages and salaries per person employed will be affected by any fluctuations in employment during the reference period.

30 Financial data presented incorporate all units in scope of the particular electricity, gas, water and waste services industry collection that were in operation at any time during the year. They also include any temporarily inactive units, i.e. those units which were in the development stage or which were not in production, but which still existed and held assets and liabilities and/or incurred some non-operating expenses (e.g. depreciation, administration costs).


RELIABILITY OF ESTIMATES

31 Two types of error are possible in an estimate based on a sample survey: sampling error and non-sampling error.

32 Sampling error occurs because a sample, rather than the entire population, is surveyed. One measure of the likely difference resulting from not including all businesses in the survey is given by the standard error. There are about two chances in three that a sample estimate will differ by less than one standard error from the figure that would have been obtained if all businesses had been included in the survey, and about nineteen chances in twenty that the difference will be less than two standard errors. Standard errors for the current estimates of key variables are shown in Technical Note 2.

33 Non-sampling error arises from inaccuracies in collecting, recording and processing the data. The most significant of these errors are: misreporting of data items; deficiencies in coverage; non-response; and processing errors. Every effort is made to minimise reporting error by the careful design of questionnaires and efficient data processing procedures.

34 For more detailed information about this subject, see Technical Note 2.


QUALITY INDICATORS

35 In the 2006-07 survey of the electricity, gas, water and waste services industries, there was a 92.6% response rate from all businesses that were surveyed and found to be operating during the reference period. Data were imputed for the remaining 7.4% of operating businesses. This imputation contributed 1.5% to the estimate of sales and service income for the electricity, gas, water and waste services industries.


INDUSTRY PERFORMANCE MEASURES

36 This publication presents a wide range of data that can be used to analyse business and industry performance.

37 Differences in accounting policy and practices across businesses and industries can lead to some inconsistencies in the data input to the statistics. Although much of the accounting process is subject to standards, there is still a great deal of flexibility left to individual managers and accountants in the accounting policies and practices that they adopt. For example, the way profit is measured is affected by management policy about such issues as depreciation rates, bad debt provisions and write off, and goodwill write off. The varying degree to which businesses consolidate their accounts may also affect any industry performance measures calculated.

38 A range of performance measures, usually expressed as ratios, can be produced from the data available from businesses' financial statements. Others, relating to labour inputs, can be derived by expressing financial or economic variables on a per person employed basis. The performance measures presented in this publication comprise:
  • profitability ratios, which measure the rate of profit on sales
  • debt ratios, which indicate the ability of businesses to meet the cost of debt financing
  • labour measures, which relate output, labour costs and employment
  • capital expenditure ratios, which indicate the extent of business investment in capital assets.

39 A further explanation of each ratio can be found in the Glossary.

40 Those ratios compiled from a combination of flow (whole period) and level (beginning or end of period) items need to be treated with additional caution. Ratios which include both level and flow items in their derivation may be volatile due to the timing differences involved. It may, therefore, be preferable to base any analysis on a range of data presented rather than focusing on one variable.

41 The above limitations are not meant to imply that analysis based on these data should be avoided, only that they should be borne in mind when interpreting the data presented in this publication.


INTERNATIONAL FINANCIAL REPORTING STANDARDS

42 The new Australian equivalents to International Financial Reporting Standards (AIFRS) began to be progressively implemented in Australia from 1 January 2005. As a result, a number of items in the financial accounts of Australian businesses have been affected by changed definitions, which have in turn affected both Income Statements and Balance Sheets. A range of ABS economic collections source data from financial accounts of businesses, and use those data to derive economic statistics. There have been no changes in the associated economic definitions.

43 After monitoring data items since March quarter 2005 it has been concluded that most affected published data series have been affected by data breaks, but that the magnitude of such breaks cannot be determined without imposing disproportionate load upon data providers to ABS surveys and other administratively collected data.


ACKNOWLEDGMENT

44 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued co-operation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.


RELATED PUBLICATIONS

45 The ABS produces industry estimates for a range of selected industries (including Electricity, gas, water and waste services) and these results will be available in Australian Industry, 2006-07 (cat. no. 8155.0), expected to be released in September 2008. National estimates of income, output, expenditure and associated ratios will be available at the ANZSIC division level (with a greater range of data available via the ABS web site in spreadsheet form). Some data presenting greater detail are considered experimental at this stage, while the methodology used to produce them is reviewed and improved.

46 The following publications and electronic releases also contain information about the electricity, gas, water and waste services industries; for a list of those that present data about these industries using ANZSIC93, please refer to the 2005-06 edition of this publication:

Household Expenditure Survey, Australia: Summary of Results, 2003-04 Reissue, cat. no. 6530.0, released on 15 February 2006 - Quinquennial publication
Manufacturing Production, Australia
, cat. no. 8301.0.55.001 - Quarterly electronic publication
Water Use on Australian
Farms, 2005-06, cat. no. 4618.0, released on 13 March 2008 - Annual publication
Year Book Australia, 2008
, cat. no. 1301.0, released on 7 February 2008 - Annual publication.

47 Current publications and other products released by the ABS are available from the Statistics View on the ABS web site. The ABS also issues a daily Release Advice on the web site which details products to be released in the week ahead.


NON-ABS DATA

48 There are a number of external organisations that collect and present data about these industries. Users requiring further information should contact:
      Energy Supply Association of Australia Ltd., Melbourne (03) 9670 0188
      website <http://www.esaa.com.au>
      (for key data, see the ESAA's annual publication Electricity Gas Australia)
      Australian Energy Regulator, Melbourne (03) 9290 1444
          website <htpp://www.aer.gov.au>
          (for key data, see State of the Energy Market 2007)
      Water Services Association of Australia, Melbourne (03) 9606 0678
      website <http://www.wsaa.asn.au>
      (for key data, see the annual publication
          National Performance Report Urban Water Utilities)
      National Water Commission, Canberra (02) 6102 6000
          website <http://www.nwc.gov.au>
          (for key data see the annual publication
          National Performance Report Urban Water Utilities)
      Australian Water Association Ltd., Sydney 1300 361 426
      website <http://www.awa.asn.au>
      Waste Management Association of Australia, Sydney (02) 8746 5000 Productivity Commission, Melbourne (03) 9653 2100 and Canberra (02) 6240 3200
      website <http://www.pc.gov.au>
      Australian Bureau of Agricultural and Resource Economics (ABARE) Canberra, (02) 6272 2000
      website <http://www.abare.gov.au>.


ABS DATA AVAILABLE ON REQUEST

49 As well as the statistics included in this and related publications, the ABS may have other relevant data available on request and for a charge. Inquiries should be made to the National Information and Referral Service on 1300 135 070.


ROUNDING

50 Where figures have been rounded, discrepancies may occur between totals and the sums of the component items. Due to data being adjusted for lags in processing new businesses to the ABS Business Register (see paragraph 23), this 'rounding rule' also applies to employment estimates.

51 Proportions, ratios and other calculated figures shown in this publication have been calculated using unrounded estimates and may be different from, but are more accurate than, calculations based on the rounded estimates.


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