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8567.0 - Hire Services, Australia, 2002-03  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 18/06/2004   
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INTRODUCTION

1 This publication presents results from a survey of selected hire services businesses for the reference year 2002-03. This is the second time the ABS has conducted this survey. Previous statistics were released for 1999-2000 for plant hire and household goods hire and for 1991-92 for motor vehicle hire.



SCOPE

2 The scope of the survey was all employing units on the ABS Business Register, classified to the following classes of the Australian and New Zealand Standard Industrial Classification (ANZSIC) for selected hire services:

  • 7743 - PLANT AND EQUIPMENT HIRING OR LEASING: This class consisted of employing businesses mainly engaged in the leasing of machinery, plant or equipment (except transport equipment) without operators, from stock physically held for that purpose. The scope was also extended to include businesses that generated income from the hiring/leasing of cranes with operators not classified to this ANZSIC class.
  • 9519 - PERSONAL AND HOUSEHOLD GOODS HIRING N.E.C.: This class consisted of employing businesses primarily engaged in the hiring of personal or household goods. These services included the hiring of goods such as televisions, furniture, white goods, clothing and footwear, recreational equipment, computers or party hire/event/function/exhibition goods and equipment, etc. The scope excluded video hire rentals.
  • 7741 - MOTOR VEHICLE HIRING: This class consisted of employing businesses mainly engaged in the leasing, hiring or renting motor vehicles from own stocks, without drivers (except licensed taxi cabs or hire cars).


STATISTICAL UNITS DEFINED ON THE ABS REGISTER

3 The ABS uses an economic statistics model on the ABS Business Register to describe the characteristics of businesses, and the structural relationships between related businesses. The units model is also used to break groups of related businesses into relatively homogeneous components that can provide data to the ABS.


4 In mid-2002, to better use the information available as a result of The New Tax System (TNTS), the ABS changed its economic statistics units model. The new units model allocates businesses to one of two sub-populations. The vast majority of businesses are in what is called the Australian Taxation Office (ATO) Maintained Population, while the remaining businesses are in the ABS Maintained Population. Together, these two sub-populations make up the ABS Business Register population.


ATO Maintained Population

5 Most businesses and organisations in Australia need to obtain an Australian Business Number (ABN), and are then included on the ATO Australian Business Register. Most of these businesses have simple structures; therefore the unit registered for an ABN will satisfy ABS statistical requirements. For these businesses, the ABS is aligning its statistical units structure with the ABN unit. The businesses with simple structures constitute the ATO Maintained Population, and the ABN unit will be used as the economic statistics unit for all economic collections.


ABS Maintained Population

6 For the population of businesses where the ABN unit is not suitable for ABS statistical requirements, the ABS will maintain its own units structure through direct contact with the business. These businesses constitute the ABS Maintained Population. This population consists mainly of large, complex and diverse businesses. The new statistical units model described below has been introduced to cover such businesses:

  • Enterprise Group: This is a unit covering all the operations in Australia of one or more legal entities under common ownership and/or control. It covers all the operations in Australia of legal entities which are related in terms of the current Corporations Law (as amended by the Corporations Legislation Amendment Act 1991), including legal entities such as companies, trusts, and partnerships. Majority ownership is not required for control to be exercised.
  • Enterprise: The enterprise is an institutional unit comprising (i) a single legal entity or business entity, or (ii) more than one legal entity or business entity within the same Enterprise Group and in the same institutional sub-sector (i.e. they are all classified to a single Standard Institutional Sector Classification of Australia sub-sector).
  • Type of Activity Unit (TAU): The TAU is comprised of one or more business entities, sub-entities or branches of a business entity within an Enterprise Group that can report production and employment data for similar activities. When a minimum set of data items are available, a TAU will be created which covers all the operations within an industry subdivision (and the TAU will be classified to the relevant subdivision of the ANZSIC). Where a business cannot supply adequate data for each industry, a TAU will be formed which contains activity in more than one industry subdivision.

7 For more information on the impacts of the introduction of the new economic statistics units model, refer to Information Paper: Improvements in ABS Economic Statistics [Arising from The New Tax System] (cat. no. 1372.0).


8 Prior to the 2002-03 cycle, the Hire Services Survey used the management unit as the statistical unit. For issues of this publication relating to 2002-03 onwards, the statistical unit in the Hire Services Survey is the ABN unit for businesses with simple structures, and the TAU for businesses with complex structures. In most cases, ABN/TAU units concord with the management units used in the 1999-2000 cycle for plant hire and household goods hire and the 1991-92 cycle for motor vehicle hire.



COVERAGE

9 The frame used for the Hire Services Survey, like most ABS economic surveys, was taken from the ABS Business Register. The ABS Business Register is primarily based on registrations to the Australian Taxation Office's Pay As You Go Withholding (PAYGW) scheme (and prior to 1 July 2000, the Group Employer (GE) scheme). The frame is updated quarterly to take account of new businesses and businesses which have ceased employing.


10 Businesses which have ceased employing are identified when the Australian Taxation Office cancels their PAYGW registration (or previously their GE registration). In addition, from July 1999 to the end of June 2000, businesses which did not remit under the GE scheme for the previous five quarters were removed from the frame. A similar process has recently been adopted to remove businesses which do not remit under the PAYGW scheme.


11 The introduction of The New Tax System has a number of significant implications for ABS business statistics, and these are discussed in: Information Paper: ABS Statistics and The New Tax System (cat. no. 1358.0) and Information Paper: Improvements in ABS Economic Statistics [Arising from The New Tax System] (cat. no. 1372.0).



IMPROVEMENTS TO COVERAGE

12 Data in this publication have been adjusted to allow for lags in processing new businesses to the ABS Business Register, and the omission of some businesses from the register. The majority of businesses affected, and to which the adjustments apply, are small in size.


13 Adjustments have been made to include new businesses in the estimates in the periods in which they commenced operations, rather than when they were processed to the ABS Business Register. Adjustments of this type will continue to be applied in future periods.


14 For more information on these adjustments, please refer to the ABS publication Information Paper: Improvements to ABS Economic Statistics, 1997 (cat. no. 1357.0).



COMPARISON WITH OTHER ABS STATISTICS

15 Annual industry data for plant hiring or leasing services, personal and household goods hiring services n.e.c. and motor vehicle hire services is published in Australian Industry (cat. no. 8155.0). There are important differences between the statistics published in the Australian Industry and Hire Services publications and users should exercise caution when making comparisons between the two sets of estimates.


16 The Australian Industry publication presents annual summary statistics at the ANZSIC class level. It shows the relative performance of each industry class, and allows patterns of change or growth to be analysed across particular segments of the Australian economy. The industry estimates presented in Australian Industry are used in the compilation of the National Accounts, and in the derivation of economy-wide indicators such as gross domestic product (GDP).


17 The Hire Services publication supplements the annual industry summary statistics with a detailed examination of the structure and performance of businesses involved in selected hire services for the reference year of the survey.


18 One reason the two sets of estimates vary relates to the use of different industry coding practices. For the Australian Industry publication, businesses are coded to ANZSIC industry classes on the basis of the activity reported to the ATO when they registered for an ABN, or for more complex businesses, information reported directly to the ABS (see paragraphs 3-8). On the other hand, Hire Services presents estimates for industry classes based on detailed financial data reported in the survey. Approximately 32% of motor vehicle hire businesses, originally coded to ANZSIC Class 7741, were found to have predominant activity outside the scope of the collection (see paragraph 2), and have consequently been excluded from the results presented in this publication. Similarly, 41% of plant hire and leasing businesses and 52% of personal and household goods hiring businesses originally coded to ANZSIC classes 7743 and 9519, respectively, were out of scope and have consequently been removed from the results.


19 Other differences in results relate to further scope and coverage variations between the two surveys. Non-employing units were included in the scope of Australian Industry, but generally excluded from all three Hire Services surveys. An additional fourteen crane units classified to other ANZSIC classes were included in the plant hire services survey scope. These businesses contributed approximately 3% to the total plant hire income.



HISTORICAL COMPARISONS

20 While comparisons are made between 2002-03 survey results and the earlier iteration of the Hire Services Survey relating to plant hire and household goods hire, the reader should bear in mind that the survey was not designed to support accurate estimates of change, and should exercise caution when comparing 2002-03 results to 1999-2000 results.


21 Historical comparisons are not made for the motor vehicle hire survey due to significant change to the industry classification since the conduct of the last motor vehicle hire survey in 1991-92. A major change for the 2002-03 survey was the inclusion of motor vehicle leasing businesses that predominantly generated income from leases greater than twelve months.


22 During 2002-03 businesses predominantly engaged in the hire of pallets were determined to be outside the scope of ANZSIC 7743 PLANT HIRING AND LEASING and are part of ANZSIC class 7742 OTHER TRANSPORT EQUIPMENT LEASING. The 1999-2000 survey results included these pallet units.



RELIABILITY OF THE DATA

23 When interpreting the results of a survey it is important to take into account factors that may affect the reliability of estimates. Such factors can be classified as either sampling or non-sampling error.


24 The estimates are based on information obtained from a randomly selected stratified sample of selected hire services businesses in the Australian business population. Consequently, the estimates in this publication are subject to sampling variability, that is, they may differ from the figures that would have been obtained if all units had been included in the survey (that is if a census was conducted). One measure of the likely difference is given by the standard error (SE), which indicates the extent to which an estimate might have varied by chance because only a sample of units was included.


25 There are about two chances in three that a sample estimate will differ by less than one SE from the figure that would have been obtained if a census was conducted and approximately 19 chances in 20 that the difference will be less than two SEs.


26 Sampling variability can also be measured by the relative standard error (RSE), which is obtained by expressing the SE as a percentage of the estimate to which it refers. The RSE is a useful measure in that it provides an immediate indication of the sampling error in percentage terms, and this avoids the need to refer also to the size of the estimate. The following table contains estimates of RSEs for a selection of the statistics presented in this publication.

RELATIVE STANDARD ERRORS FOR TABLE 1.1 SUMMARY OF OPERATIONS

Plant hire
Household goods hire
Motor vehicle hire
%
%
%

Businesses at end June
8.3
8.9
4.7
Premises at end June
Capital city
8.0
12.0
5.3
Other
11.6
14.9
7.5
Total
6.1
8.9
4.4
Employment at end June
3.6
5.4
2.3
Income
Hire/lease/rental
3.3
3.1
2.2
Other
4.5
6.3
1.0
Total
3.1
3.1
1.4
Expenses
Labour costs
2.6
2.8
1.7
Depreciation and amortisation
5.8
3.2
1.2
Other
3.7
4.1
1.8
Total
3.2
3.1
1.5
Operating profit before tax
5.6
10.4
2.9
Operating profit margin
4.8
10.0
2.9
Industry value added
3.3
2.7
1.2
Hire service income from
Household clients
6.5
3.4
1.7
Commercial businesses
0.8
2.8
2.0
Government organisations
6.2
4.7
3.6
Other clients
21.1
13.4
7.6
Total
-
-
-

- nil or rounded to zero (including null cells)


27 As an example of the above, an estimate of total income for plant hire businesses in 2002-03 was $2,619.5m and the RSE was estimated to be 3.1%, giving a SE of approximately $81.2m. Therefore, there would be two chances in three that, if all units had been included in the survey, a figure in the range of $2,538.3m to $2,700.7m would have been obtained, and 19 chances in 20 (i.e. a confidence interval of 95%) that the figure would have been within the range of $2,457.1m to $2,781.9m.


28 The sampling variability for estimates at the state/territory level was higher than for Australian level aggregates. Within states/territories, the sampling variability, and therefore the RSEs of estimates for smaller states and territories are higher than for the larger states. Survey estimates for the smaller states and territories should therefore be viewed with more caution than those for other states. RSEs for New South Wales, Victoria and Queensland are typically 1 to 3 times greater than the corresponding national figure for employment and financial estimates, and 1.4 to 2.1 times higher for estimates of numbers of businesses. RSEs in the other states and territories are typically up to 6 times greater than the corresponding national figure for employment and financial estimates, and up to 3.6 times higher for estimates of numbers of businesses (the wide range of values is a result of the different market shares of small and large businesses in each state/territory.


29 Errors other than those due to sampling may occur in any type of collection and are referred to as non-sampling error. For this survey, non-sampling error may result from such things as deficiencies in the register of businesses from which the sample was drawn, non-response, imperfections in reporting and/or errors made in compiling results. The extent to which non-sampling error affects the results of the survey is not precisely quantifiable. Every effort was made to minimise non-sampling error by careful design and testing of the questionnaire, efficient operating procedures and systems and the use of appropriate methodology. Survey estimates subject to a high level of non-sampling error have been suppressed or provided with relevant cautions.


30 Estimates that have an estimated relative standard error between 10% and 25% are annotated with the symbol '^' . These estimates should be used with caution as they are subject to sampling variability too high for some purposes. Estimates with an RSE between 25% and 50% are annotated with the symbol '*', indicating that the estimate should be used with caution as it is subject to sampling variability too high for most practical purposes. Estimates with an RSE greater than 50% are annotated with the symbol '**' indicating that the sampling variability causes the estimates to be considered too unreliable for general use.



ROUNDING

31 Where figures have been rounded, discrepancies may occur between the sum of the components and the total. Similar discrepancies may occur between a proportion or ratio, and the ratio of the separate components.



REFERENCE PERIOD

32 Data contained in the tables in this publication related to all selected hire services businesses in Australia during the year ended June 2003. Financial estimates included the activity of any business that ceased or commenced operations during the year. Counts of businesses and locations included only those that were operating at 30 June 2003. Employment included only those persons working for a hire services business during the last pay period ending in June 2003.



ACKNOWLEDGMENT

33 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation 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.



DATA AVAILABLE ON REQUEST

34 Inquiries about these statistics and more detailed statistics than those presented in this publication should be made by telephoning the contact shown on the front page.


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