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6351.0.55.001 - Wage Price Index: Concepts, Sources and Methods, 2012  
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Contents >> Chapter 5 - Coverage and classifications

CHAPTER 5 – COVERAGE AND CLASSIFICATIONS

INTRODUCTION

5.1 This chapter describes the target population for the WPI and defines the statistical units surveyed in the WPI.


TARGET POPULATION

5.2 The target population for the WPI is all employing organisations in Australia (private and public sectors) excluding:

    • Enterprises primarily engaged in Agriculture, forestry or fishing
    • Private households employing staff
    • Foreign embassies, consulates, etc.

5.3 Enterprises primarily engaged in Agriculture, forestry and fishing activities are excluded because a very high proportion of agricultural enterprises have no employees. It would be disproportionately costly to survey a sufficient number of these enterprises to obtain a sample of jobs that is large enough to adequately represent this industry. In addition, the highly seasonal nature of activities in this industry would make it difficult to track jobs over time.

5.4 Private households employing staff and foreign embassies, consulates, etc. cannot be included because they are out of scope of the ABS Business Register from which the WPI sample of businesses is selected.


SCOPE

5.5 A change to WPI coverage in the December quarter 2009 resulted in businesses with 5 or less employees (referred to as micro-businesses) being excluded from the collection. An internal ABS review determined that the size and frequency of pay changes in micro-businesses were similar to businesses with five employees or more. Effectively, micro-businesses could be excluded from the survey without adversely affecting measures of price change. These businesses are still considered within scope of the target population and continue to be represented in WPI outputs via their inclusion in the expenditure weights.


TREATMENT OF BUSINESSES AS STATISTICAL UNITS

Statistical units

5.6 The ABS uses an economic statistics units model based 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.

5.7 The units model allocates businesses to one of two sub-populations. The vast majority of businesses are in what is called the Australian Tax 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

5.8 Most businesses and organisations in Australia need to obtain an Australian Business Number (ABN), and are then included on the ATO’s Australian Business Register. Most of these businesses have simple structures and in such cases the unit registered for an ABN will satisfy ABS statistical requirements. For these businesses, the ABS has aligned its statistical units structure with the ABN unit. The businesses with simple structures constitute the 'ATO Maintained Population'.

ABS Maintained Population

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

5.10 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.

5.11 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 Economic Sector Classification of Australia sub-sector). For more details refer to Standard Economic Sector Classifications of Australia (SESCA), 2008 (cat. no. 1218.0).

5.12 Type of Activity Unit (TAU): The TAU comprises 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 economic activities. When a minimum set of data items are available, a TAU is created which covers all the operations within an industry sub-division and the TAU is classified to the relevant sub-division of the ANZSIC industry classification (see Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (cat. no. 1292.0)). Where a business cannot supply adequate data for each industry, a TAU is formed which contains activity in more than one industry sub-division.

5.13 For more information on the economic statistics units model, refer to Information Paper: Improvements in ABS Economic Statistics [Arising from the New Tax System], 2002 (cat. no. 1372.0).

5.14 For units from the ATO Maintained Population, the statistical unit is the ABN unit. For units from the ABS Maintained Population, the statistical unit is the ABN unit/TAU in each state of operation. Where organisations are unable to provide data at the TAU/state level, special reporting units are created to collect information from the level within the organisation structure at which data are available. These special reporting units comprise either an aggregation of TAU/state units into larger units or a disaggregation into smaller units. In cases where a TAU/state unit is disaggregated into numerous similar small units, a sub-sample of these units is selected in order to reduce the reporting load on the providers.


JOB COVERAGE

5.15 When a statistical unit (as defined by the TAU/State model) is selected in the survey, it is required to provide a selection of jobs. A job is defined in paragraph 19.29 of the System of National Accounts [see Australian National Accounts: Concepts, Sources and Methods, Edition 1 2012 (cat. no. 5216.0)] as a work agreement (either written or verbal) between an employer and an employee. A distinction is made between an employee and job as an individual can have multiple sources of income and therefore the number of jobs in an economy can exceed the number of persons employed. As will be seen in Chapter 9, the distinction is particularly important for the WPI, as employees can move between jobs and can vary in the labour service they would provide. The WPI avoids such fluctuations by following the same jobs (rather than employees) over time.

5.16 All jobs in the target population of employers are in scope of the WPI, except the following:
    • Australian permanent defence force jobs
    • Non-salaried directors
    • Proprietors/partners of unincorporated businesses
    • Persons paid by commission only
    • Working proprietors/owner managers of Pty Ltd companies
    • Employees on workers’ compensation who are not paid through the payroll
    • ‘Non-maintainable’ jobs (i.e. jobs that are expected to be occupied for less than six months of a year)
    • Jobs for which wages and salaries are not determined by the Australian labour market (e.g. most employees of Community Development Employment Programs, or jobs where the remuneration is set in a foreign country).
5.17 As such, full-time, part-time, permanent, casual, managerial and non-managerial jobs are in scope of the WPI. Costs incurred by businesses for work undertaken by self-employed persons such as consultants and subcontractors are out of scope of the WPI, as they do not relate to employee jobs. Workers paid commission without a retainer are also excluded, as a large number of such workers operate in a similar fashion to self-employed persons.


CLASSIFICATIONS

5.18 The WPI uses the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (cat. no. 1292.0) to classify the industry of organisations selected for the survey.

5.19 The broad institutional sector i.e. public and private sector breakdown for the WPI follows the Standard Economic Sector Classification of Australia (SESCA), 2008 (cat. no. 1218.0).

5.20 State and territories are classified by the Australian Statistical Geography Standard (ASGS) (cat. no. 1270.0.55.001).

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