QUALITY DECLARATION - SUMMARY
Statistics presented in this release have been derived using a combination of data collected directly by the Australian Bureau of Statistics (ABS) under the authority of the Census and Statistics Act 1905, tax data supplied by the Australian Taxation Office (ATO) under the Taxation Administration Act 1953 and Australian Business Register (ABR) data supplied by the Registrar under A New Tax System (Australian Business Number) Act 1999 to the Australian Statistician. The Taxation Administration Act 1953 requires that such data are only used for the purpose of administering the Census and Statistics Act 1905 and the A New Tax System (Australian Business Number) Act 1999 requires that such data are only used for the purpose of carrying out functions of the ABS.
For information on the institutional environment of the ABS, including the legislative obligations of the ABS, financing and governance arrangements, and mechanisms for scrutiny of ABS operations, please see ABS Institutional Environment.
This statistical release presents counts of Australian businesses, sourcing data from the Australian Bureau of Statistics Business Register (ABSBR). It includes information on the entry, exit, growth and survival rates of businesses.
The scope includes all actively trading businesses which were operating in the Australian economy as at June 2011, June 2012, June 2013, June 2014 and June 2015. It is important to note that 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 counts. Please refer to the Explanatory Notes for further information.
Actively trading businesses are:
- type of activity units (TAUs) from the profiled population (where activity is monitored by direct contact by ABS)
- Australian Business Numbers (ABNs) from the non-profiled population, which are actively remitting in respect of a Goods and Services Tax (GST) tax role.
Limiting the scope only to 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 years in the case of annual remitters) are treated as long-term non–remitters (LTNRs). As these businesses are not actively remitting GST, they are considered not to be actively trading and are therefore excluded from counts.
This release includes businesses classified by:
Data were extracted from the ABSBR to provide a snapshot of actively trading businesses in June 2011, June 2012, June 2013, June 2014 and June 2015, and were released on 26 February 2016, approximately eight months after the end of the reference period. The next release of Counts of Australian Businesses, including Entries and Exits
(cat. no. 8165.0) is currently scheduled for February 2017.
The counts in this release are intended to provide an accurate measure of actively trading businesses, that is, businesses that are producing or distributing goods or providing services (defined by a GST role) and are active (defined as having remitted GST within the past five quarters or three years in the case of annual remitters).
For non-profiled businesses, most classificatory data items reflect information provided to the ATO at the time of ABN registration. The exception is the payees information which is updated quarterly by the ATO, and employment and turnover, which is based on BAS reporting. In the profiled population, classificatory data items for the most significant businesses are updated annually. Businesses on the next level of significance are updated biennially. Other businesses in the profiled population are not routinely updated, but may be updated as a result of ABS survey feedback or other maintenance activity.
Counts in this release are subject to non–sampling error, and the cyclical administrative workflows of the ATO may impact on data interpretability. Non–sampling error arises from inaccuracies in collecting, editing and processing the data. Every effort was made to minimise non–sampling error by reviewing editing strategies and efficient data processing procedures. The counts are not subject to sampling error as they represent a complete enumeration of economically active businesses on the ABSBR.
There are six known sources of error in these counts which are likely to impact on the number of actively trading businesses reported. However, the ABS believes that these sources of error (identified below) are likely to have a relatively small impact on the accuracy of the business counts contained in this release.
- Businesses with low turnover
From 1 July 2007, businesses with turnover of at least $75,000 per annum ($150,000 in the case of non–profit organisations) were required to register for an ABN and remit GST. Businesses with turnover under $75,000 were able to voluntarily register and these voluntarily registered businesses are also included in the counts in this release. There are certainly, however, businesses that are actively trading with turnover of less than $75,000 which chose not to register for an ABN or remit GST. The number of businesses in this category is currently unknown to the ABS. Similarly, the same applied prior to 2007 for businesses with turnover of at least $50,000 per annum ($100,000 for non–profit organisations).
- Businesses which have recently ceased trading
A business may have remitted GST within five quarters of the end of the reference period (or within two years for annual remitters) but not be operating at the end of the reference period. Such a business would still be counted as actively trading at the end of the reference period because it would not yet have qualified to become an LTNR (a long-term non-remitter of GST). When a business has been classified as an LTNR it is considered to have ceased operating.
- Businesses which appeared to have ceased trading but are likely to be active
A business may be classified as an LTNR (and thereby excluded from the count of actively trading businesses) then resume remitting GST. Such a business may have been operating but not remitting GST during the period it was classified as an LTNR.
There are reasons why a business may not respond to the ATO for a period of time and then recommence remitting GST. For example, a business may be in a start-up phase with minimal or no activity, could be tax exempt or recalcitrant in reporting over a period of time, or could become dormant while undertaking a change in activity. It would be difficult however to categorise LTNR units which later remit into these groupings without a detailed investigation of each unit.
- Main business address
Businesses can operate in more than one state or territory, and in these cases are classified to their main 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 businesses in the profiled population, main state is not necessarily the state or territory of the main business address.
- Multi-location businesses
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 operates). 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.
This release therefore may be regarded as providing partial coverage of businesses in a given state. For example, if a business registers for a single ABN, but then operates from many physical locations or shopfronts, coverage will be restricted to the state of the main or head office location only. This is particularly relevant for larger businesses, which commonly establish outlets in numerous states and territories across Australia and also operate from a head office location.
The issues of multi–location businesses are more pronounced for counts at the Statistical Area Level 2 (SA2) level, as multi–location businesses may 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. Users should be aware of this limitation when using counts of businesses included in this release and should be particularly cautious in equating the number of businesses, represented by ABNs (and TAUs), with the number of business operations.
- Business size classifications
In terms of annual turnover values, 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 on BAS for ABNs is aggregated and apportioned to the relevant TAUs. 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.
In terms of employment range values, an improved methodology was included in the Jun 2009 to Jun 2013 release to provide the ABS's best estimate of the number of employees at the end of the financial year. This statistical adjustment is based on the most recent and consistent information from surveys, the Australian Business Register (ABR) and the Australian Taxation Office (ATO). Details explaining this methodology are included in Improved Employment Range (Technical Note) in the June 2009 to June 2013 and June 2010 to June 2014 releases.
An important definitional change introduced in the June 2007 to June 2011 release of Counts of Australian Businesses, including Entries and Exits (cat. no. 8165.0) resulted in a break in series with earlier releases. The scope of this release was changed to better reflect Australia's actively trading business population, and as such, it was necessary to rebase the publication tables and datacubes to 2007. As a result, the counts presented in this release are not comparable with the releases from 2007 and earlier. For further information, please see the Notes document linked to the left hand navigator box in the Summary tab of the June 2007 to June 2011 release.
The scope of this release is also significantly different to previously released (and now discontinued) ABS business counts publications:
In particular, this release only includes businesses which actively traded in goods or services during the reference period.
This release continues to provide business counts by selected demographics including industry, geography, institutional sector, type of legal organisation and business size. Business size data is provided by selected annual turnover and employment size ranges. These (employment) data indicate that most Australian businesses are small and that most of Australia's small businesses do not employ any staff. This means the counts in this release are heavily influenced by the entry and exit of businesses within Australia's small business sector. Therefore, this should be considered when comparing the data with other ABS statistics.
Further information about scope and coverage, terminology and other technical aspects associated with these statistics can be found in documents linked to the left hand navigator box in the Summary and Explanatory Notes tabs of ABS cat. no. 8165.0.
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