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1504.0 - Methodological News, Dec 2003  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/02/2004   
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Maintaining Optimal Frame Coverage using Administrative Data

The ABS Business Register is essentially a list of all employing and non-employing businesses operating in Australia. The Business Register provides the statistical framework from which representative samples are drawn for most ABS economic censuses and sample surveys. Therefore, it is important that the Business Register is a comprehensive, accurate and regularly updated source of businesses.

However, financial constraints as well as practical limits on the source data available for updating the Business Register mean that the Business Register can never be perfect and completely up-to-date. The ABS has strategies in place to deal with imperfections on the Business Register. These strategies must be operationally practical, as well as theoretically sound.

Errors caused by imperfect registers fall into two types:

  • content errors refer to inaccuracies in the information recorded about units on the register. Usually their effect can readily be estimated from the sample, provided that there are procedures in place which can consistently and reliably identify these register imperfections in the sample;
  • coverage errors relate to the presence or absence of units on the register. Typically they contribute mostly to the fixed error or bias in the estimate and usually additional investigations are needed to estimate their effect. New business provisions are used to deal with undercoverage for businesses not yet added to the register. A technique to reduce overcoverage on an ongoing basis is to remove businesses from the frame that are defined as 'long term non-remitters'.

Having businesses that are no longer operating or businesses that are out of scope of our surveys on our frames reduces sampling efficiency. The ABS uses administrative taxation data to identify and remove from frames such businesses. The main criterion in determining long term non-remitters is that businesses have not remitted taxation data for the last five consecutive quarters. One reason why five consecutive quarters was chosen was because some businesses only need to provide the Australian Taxation Office with taxation data on an annual basis.

As the ABS uses a technique that reduces overcoverage, there is actually a chance that in scope operating businesses are removed in error. The main reason for this error is that some businesses are late in providing taxation data to the Australian Taxation Office.

An investigation conducted by the Victorian Methodology Unit looked into whether having a five quarter non-remittance period was sufficient to determine long term non-remitters. It was concluded that extending the non-remittance period beyond five quarters would result in fewer businesses being incorrectly identified as non-remitters. However, it would also lead to a reduction in the number of ‘true’ long term non-remitters identified, resulting in increased sample error. As the increase in sample error outweighed the benefits from reducing the error due to undercoverage, a decision was made to stay with the five quarter non-remittance period.

For more information, please contact: Rosslyn Starick on 03 9615 7689.

Email: rosslyn.starick@abs.gov.au

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