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Chapter 7 - Development and implementation of the Australian and New Zealand Industrial Classification 2006 (ANZSIC 2006)
TABLE 7.1: HISTORY OF INDUSTRIAL CLASSIFICATIONS IN AUSTRALIA
CONCEPTUAL BASIS OF ANZSIC 2006
There were several broad objectives set for the ANZSIC review project as follows:
A CONTEMPORARY INDUSTRIAL CLASSIFICATION
Industrial classifications need to be periodically reviewed to ensure that they remain current and relevant, reflecting the changes that have occurred in the structure and composition of industry since the previous version, as well as satisfying emerging user requirements for industry data.
Since ANZSIC 1993 was developed, there had been significant changes in the structure, composition and organisation of industrial and business activities in Australia and New Zealand. New materials, technologies and production techniques had been adopted and some of these affected the way industry and businesses operate. Most importantly, whole new industries had emerged and needed to be included in the classification – including provision of Internet access services, Internet publishing and broadcasting, computer retailing and communication equipment manufacturing.
The requirements of users of industry statistics had also changed. In particular, users required better support for alternative industry views, that is, views of activities, such as tourism, that are not consistent with the standard concepts embodied in ANZSIC 1993 (for example, tourism involves a range of industries such as air transport, accommodation, rental cars, and retail).
A MORE CONSISTENT CONCEPT OF INDUSTRY
ANZSIC 1993 used a mixture of supply-and demand-side concepts in defining industries – that is, sometimes a distinction was made on the process of production or service (supply-side), sometimes it was made on the client of the product or service (demand-side). In some instances, this led to the classification prescribing different treatments for similar productive activities. The conceptual framework adopted for the development of ANZSIC 2006 uses supply-side based industry definitions and groupings.
ALIGNMENT WITH INTERNATIONAL STANDARDS
Aligning ANZSIC with international standards as far as possible maximises the comparability of Australian and New Zealand industry statistics with those of the rest of the world. ANZSIC 2006 aligns with the International Standard Industrial Classification of All Economic Activities (ISIC) and the North American Industry Classification System (NAICS) at the subdivision level as far as practicable.
ISIC was adopted by the United Nations in 1948 and is used as the international standard for guiding work on national industrial classifications. Revisions of ISIC were issued in 1958 (Rev. 1), 1968 (Rev. 2) and 1990 (Rev. 3). A minor update of ISIC Rev. 3 was issued in 2002 (Rev. 3.1). A major revision of ISIC is well advanced and is expected to be released in 2007 (Rev. 4).
ANZSIC 2006 has achieved comparability with ISIC to a greater extent than earlier industrial classifications. Australia and New Zealand had, for many years, endeavoured to align their industrial classifications with ISIC as far as possible. However, the degree of alignment able to be achieved was sometimes reduced by competing classification principles, for example, a different structure of Australian or New Zealand industry, or a lack of significance of some internationally recognised economic activities in the two economies.
NAICS is the industrial classification system used by Canada, Mexico and the United States. It follows the supply-based or production-oriented principle. The Information sector is one of the key features of NAICS 2002 and was used as a model for the new Information Media and Telecommunications Division in ANZSIC 2006.
The development of ANZSIC 2006 applied a number of important principles normally followed in the development of industrial classifications or for statistical classifications generally.
In most instances, industry classes have been formed only if the activities they cover are economically significant in either Australia or New Zealand and the businesses classified to them are relatively homogeneous in terms of industrial activity. ANZSIC categories are mutually exclusive and comprehensive in their coverage of productive economic activities.
An example of the hierarchical classification structure is shown in the extract from ANZSIC 2006 below.
DIAGRAM 7.1 HIERARCHICAL CLASSIFICATION STRUCTURE USED IN ANZSIC 2006
COMMUNICATION PROGRAM FOR ANZSIC 2006
In the development of the detailed ANZSIC 2006 classification, there was extensive consultation with users of ANZSIC in Australia and New Zealand, including experts in industry structure. There will continue to be extensive communication with users as the new classification is introduced into ABS collections.
The main elements of the ABS communication strategies are as follows:
ANZSIC 2006 is substantially changed from the 1993 edition, largely due to significant changes in the Australian and New Zealand economies in the intervening period. As the table below shows, there has been a considerable increase in the number of industries at each level of the hierarchy within the classification.
TABLE 7.1 COMPARISON OF NUMBER OF INDUSTRY CATEGORIES – ANZSIC 1993 AND 2006
Changes at each level are summarised below.
DIVISIONS (E.G. A AGRICULTURE, FORESTRY AND FISHING)
The large and diverse Property and Business Services Division in ANZSIC 1993, together with some other services, has been rearranged into three new divisions: Rental, Hiring and Real Estate Services; Professional, Scientific and Technical Services; and Administrative and Support Services.
ANZSIC 2006 Division J Information Media and Telecommunications is a new division, which brings together activities from a number of ANZSIC 1993 divisions, including ANZSIC 1993 Division J Communication Services.
Several divisions were renamed to better reflect their composition or terminology in current usage. Other changes to division names were required as a result of the new structure.
SUBDIVISIONS (E.G. 01 AGRICULTURE)
The increase in the number of divisions resulted from a number of factors including:
The major factors behind the substantial increase in the number of groups were:
The introduction of ANZSIC 2006 changes the lower levels of the classification by merging and deleting some existing ANZSIC 1993 classes and recognising some new classes and primary activities. Some primary activities have also been transferred out of ANZSIC 1993 classes and re-grouped according to production function similarities to form new classes in ANZSIC 2006.
ANZSIC 2006 has been developed with a focus on providing relevant support tools to enable as smooth a transition as possible from ANZSIC 1993 to the new classification. To this end, there have been several support tools developed, all of which are accessible via the ABS web site. These include:
The ABS learned some valuable lessons during the changeover from ASIC to ANZSIC 1993, and these have influenced both the strategies and governance arrangements that underpin the implementation program. A key component of the program, for example, is a stronger focus on assisting users to understand the changes introduced with the new classification and to better manage the impact on users of ABS data. A number of measures will be taken by the ABS to assist users through the implementation period, including publishing data on both ANZSIC 1993 and 2006 bases and backcasting of selected ABS statistics on an ANZSIC 2006 basis.
CHANGE MANAGEMENT STRATEGIES
Annual, quarterly and monthly economic collections
In the past, the ABS has used a one point in time measurement of the effect of changes such as the introduction of a new industry classification. However, analysis of statistical time series focuses on movements in the data, and a single point–in–time approach does not allow for sufficiently robust analysis of these movements.
As a result, for economic collections conducted on an annual, quarterly or monthly basis, the ABS will measure the effect of the changeover from ANZSIC 1993 to ANZSIC 2006 in successive reference periods (two periods for annual collections, up to five for monthly or quarterly collections). Adoption of this approach, while extending the implementation process, will provide information about the impact of the change on estimates of both level and movement, and will result in the production of more robust statistics when they are first released on an ANZSIC 2006 basis.
Other economic collections
For the 2005–06 and 2006–07 reference years, irregular and benchmark economic collections (for example, Service Industry Surveys, the 2005–06 Retail and Wholesale Industry surveys, and the 2005–06 Agriculture Census) will be designed to produce official statistics on both ANZSIC 1993 and ANZSIC 2006 bases. The former will allow comparisons to be made with previous data for the topic concerned, while the latter will allow for comparisons into the future.
Population and social statistics
Collections that do not draw a survey frame from the ABS business register (such as the Census of Population and Housing and Labour Force Survey) will code their industry– related data to both ANZSIC 1993 and ANZSIC 2006. Generally, the industry data for these collections comprises only one topic amongst a wide range of data collected.
The 5-yearly Census held in August 2006 will be the first major collection to use ANZSIC 2006. ANZSIC is used in the census to provide information on employment by industry. The collection of this information for the 2006 Census will be aided by the use of a Business Name Index which lists most Australian businesses, including most large businesses. This should result in more accurate industry of employment coding than in previous censuses.
BROAD IMPLEMENTATION TIMETABLE
The ABS' implementation of ANZSIC 2006 has been devised taking into account two critically important elements. Firstly, establishing the requirements, including timing, of implementation within the Australian National Accounts (ANA), and, secondly, a determination not to release indicator series on a different classification basis to the ANA.
The optimal time for the ANA to be first released on an ANZSIC 2006 basis is late 2009. The ANA timetable will see ANZSIC 2006 based:
The release of ABS statistics on an ANZSIC 2006 basis will start in late 2006 with the release of data from the August 2006 Labour Force Survey. At this time, industry employment statistics will be available for both ANZSIC 1993 and ANZSIC 2006. When backcasting required to provide consistent historical series is completed in early 2009, the compilation of ANZSIC 1993 industry employment statistics will cease.
The next ABS statistics available on an ANZSIC 2006 basis will be the 2006 Census with a release in late 2007
Information on the planned first-release dates for a range of other statistical series on an ANZSIC 2006 basis can be found in Information Paper: ANZSIC 2006 Implementation (cat. no. 1295.0).
ANZSIC 'home page' on the ABS Web site (providing access to the classification as well as various support tools including an on-line search facility).