The Australian and New Zealand Standard Industrial Classification (ANZSIC) has been jointly developed by the Australian Bureau of Statistics (ABS) and Statistics New Zealand (Statistics NZ).

An individual business entity is assigned to an industry based on its predominant activity. The term business entity is used in its widest sense to include any organisation undertaking productive activities, including companies, non-profit organisations, government departments and enterprises.

Arranging the large amount of data available about businesses into groupings that are both analytically useful and which users can understand, can be done in a number of ways. In economic statistics, this is usually achieved by either classifying the information relating to the operations of businesses (e.g. grouping all income items together); or by classifying the business units about which the data have been collected (e.g. grouping all the data about businesses operating in Tasmania).

An industrial classification is one way to organise data about business units. It provides a standard framework under which business units carrying out similar productive activities can be grouped together, with each resultant group referred to as an industry.

The ANZSIC provides a basis for the standardised collection, analysis and dissemination of economic data on an industry basis for Australia and New Zealand. Use of the ANZSIC results in improved comparability of industry statistics produced by the two countries. Prior to the development of ANZSIC 1993, separate national industrial classifications were used in Australia and New Zealand.

As well as being the standard industrial classification that underpins ABS and Statistics NZ industry statistics, the ANZSIC is widely used by government agencies, industry organisations and researchers for various administrative, regulatory, taxation and research purposes throughout Australia and New Zealand.

ANZSIC 2006 has been developed to provide a more contemporary industrial classification system. Changes in the structure and composition of the economy, changing user requirements and comparability with international standards have been taken into account. This 2006 edition of the ANZSIC replaces the 1993 edition.

Businesses can be represented in various ways for particular statistical and other purposes. Statistical agencies use the term 'unit' to refer to the representation of businesses used for particular collections of data from businesses and for the production of particular statistical outputs relating to them.

A range of business units are used for different statistical purposes e.g. producing units are used for industry statistics and institutional units are used for financial statistics. The units and their relationships to each other are described within a units model. The type of business unit to be classified to industry is a critical design element for any industrial classification. Industrial classifications designed for a particular unit of classification may be less suitable, or entirely unsuitable, for application to other types of business units.

The Unit of classification section describes the unit of classification used for the development of the ANZSIC. The unit models used by the ABS and Statistics NZ in the compilation of their official statistics are outlined in Appendices 1 and 2, with most emphasis on the producing units used for industry statistics.

The International Standard Industrial Classification of All Economic Activities (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 the 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 further major revision of the ISIC is well advanced and is expected to be released in 2007 (Rev.4). 

Australia and New Zealand have for many years endeavoured to align their industrial classifications with the ISIC as far as possible. However, the degree of alignment able to be achieved is sometimes adversely affected by competing classification principles e.g. a different organisation or structure of Australian or New Zealand industry, or a lack of significance of some internationally recognised economic activities in the two economies. Notwithstanding this, ANZSIC 2006 is expected to achieve international comparability to a greater extent than with earlier industrial classifications. Refer to the Correspondences section. 

During the late 1960s, the then Commonwealth Bureau of Census and Statistics drew together the several distinct classifications then in use in Australia to produce the first Australian Standard Industrial Classification (ASIC). The original 1969 edition of the ASIC was based at the broader levels on the ISIC, with some modifications to allow for comparability with previously used classifications. The structure and composition at the finer levels were derived from extensive investigations into the activity mix characteristics of Australian businesses.

Revised editions of the classification were released by the ABS in 1978 and 1983. The 1978 edition reflected an extensive review of the 1969 edition, involving a substantial program of empirical investigation and analytical work. Numerous changes were made, mainly affecting the definitions of individual industry classes. There was little change at the higher levels of the classification. The 1983 edition updated the 1978 edition in respect of the Transport and Storage industries.

The first New Zealand Standard Industrial Classification (NZSIC) was issued in 1970, based on ISIC, Rev.2, but adapted to the New Zealand environment. It replaced a modified form of the original 1948 edition of the ISIC, which had been used by Statistics NZ from 1948. A second edition of the NZSIC was produced in 1975, with more detail in some areas, and a third edition was produced in 1987. The second and third editions of the NZSIC were also based on ISIC, Rev.2.

In 1985, the ABS commenced a major review of the ASIC. The principal objectives were to improve the alignment with ISIC; to achieve a better balance across the classification by giving more attention to the services sector, including segments relating to the culture, entertainment and other recreational industries; and to take account of the effects of technological changes and changes in the structure of industry generally since the previous edition.

The possibility of Australia and New Zealand using a common industrial classification was first raised in 1990 while the ASIC review was continuing. A succession of economic agreements between Australia and New Zealand have operated since 1922. The statistical agencies have met regularly to monitor the progress of the economic relationship and to share experiences and explore common interests. Joint working relationships have been established to harmonise statistics where practicable.

As the two statistical agencies used similar principles to create their national industrial classifications, they were able to agree on the principles and strategy for development of a single classification to meet the requirements of both countries. A particular consideration was the need to update each country's classifications to align with ISIC, Rev.3 issued in 1990.

Agreement was reached on a joint work program, which leveraged off the work already undertaken on the ASIC review. The first edition of the joint classification (ANZSIC) was released by the two agencies in 1993.

The ANZSIC is a hierarchical classification with four levels, namely Divisions (the broadest level), Subdivisions, Groups and Classes (the finest level). At the Divisional level, the main purpose is to provide a limited number of categories which provide a broad overall picture of the economy and are suitable for the publication of summary tables in official statistics. The Subdivision, Group and Class levels provide increasingly detailed dissections of these categories for the compilation of more specific and detailed statistics.

The hierarchical structure of the ANZSIC is illustrated below.

The review of ANZSIC 1993 commenced in January 2000. There was extensive consultation with users of the ANZSIC in Australia and New Zealand throughout the review process, with the outcomes reflected in this, the 2006 edition of the ANZSIC. There were several broad objectives set for the project.

Industrial classifications need to be periodically reviewed to ensure 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.

The benefits of any updates and improvements to the classification need to be assessed against, and be clearly worth, the significant costs in reworking statistical collections and outputs, changing administrative database designs, and revising statistical time series to reflect the new classification.

Since ANZSIC 1993 was developed, there have been changes in the structure, composition and organisation of industrial and business activities in Australia and New Zealand. New materials, technologies and production techniques have been adopted and some of these have affected the way industry and businesses operate. New industries and activities have emerged and need to be reflected in the classification.

The requirements of users of industry statistics have also changed. In particular, consideration needs to be given to better supporting alternative industry views, different from the standard concepts embodied in the classification e.g. tourism.

ANZSIC 1993 used a mixture of supply and demand-side concepts in defining industries. This led to the classification prescribing different treatments for some very similar productive activities because of the different clients served.

The conceptual framework adopted for the development of ANZSIC 2006 uses supply-side based industry definitions and groupings. Using this approach, business units engaged in similar productive activities are grouped together. Units in an industry therefore exhibit similar production functions (a term used to describe the transformation of intermediate inputs, through the application of labour and capital, to produce outputs).

Aligning the 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. In the interests of international statistical comparability, ANZSIC 2006 aligns with the ISIC and the North American Industry Classification System (NAICS) at the subdivision level as far as practicable.

In the ANZSIC review, close consideration was given to the work undertaken in recent years on the ISIC and the NAICS. Australia and New Zealand have been involved in international meetings reviewing the bases of these classifications. To the extent considered appropriate to Australian and New Zealand conditions, ANZSIC 2006 therefore reflects the latest international work on industrial classifications.

The development of ANZSIC 2006 applied a number of important principles normally followed in the development of industrial classifications or for standard classifications generally. ANZSIC 2006 categories have been designed to reflect the structure of Australian and New Zealand industry, and for use in the collection, compilation and presentation of industry statistics.

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 homogeneous in terms of industrial activity. ANZSIC categories are mutually exclusive and comprehensive in their coverage of productive economic activities.

The Nature and objectives of the classification section provides more detailed information on the classification principles followed in the development of ANZSIC 2006. The Methods of classification section describes the methods that should be followed in classifying businesses according to the ANZSIC. A guide to the coding of certain activities section provides further information on the treatment of certain activities.

ANZSIC 2006 separately identifies 19 divisions, compared with 17 in ANZSIC 1993.

A new Information Media and Telecommunications Division has been introduced. It groups units mainly engaged in the creation and storing of information products for dissemination purposes; transmitting information products using analogue and digital signals; and providing transmission and storage services for information products. This has been identified as a rapidly growing sector in the Australian and New Zealand economies since the last review. The proposed ISIC, Rev.4 and NAICS 2002 also recognise this as a separate Division.

The very large and diverse Property and Business Services Division in ANZSIC 1993, together with some other services, has been rearranged into three new divisions in ANZSIC 2006: Rental, Hiring and Real Estate Services; Professional, Scientific and Technical Services; and Administrative and Support Services. The three separate divisions again align with the proposed ISIC, Rev.4 and NAICS 2002.

ANZSIC 2006 identifies 86 subdivisions, compared with 53 in ANZSIC 1993. The substantial increase in the number of subdivisions was driven by improvements made to the international comparability of the classification at this level and the identification of groups of economic activities with significant differences in their production functions at higher levels of the classification. Considerable change has also occurred at the lower levels of the classification.

Appendix 3 examines in more detail the changes that have occurred between the 1993 and 2006 editions of the ANZSIC.

The new divisional structure for ANZSIC 2006 is as follows:

The Numbering system and titles section describes the numbering system used in the classification and lists the ANZSIC codes and titles. The Division definitions section lists the definitions of each of the ANZSIC Divisions. The Detailed classification section provides the full, detailed ANZSIC 2006 classification, with descriptions of all of the ANZSIC classes and lists of primary activities and exclusions for each class. The Alphabetical index of primary activities section includes an alphabetic index of the primary activities identified with the corresponding ANZSIC codes.

Implementation of a new edition of a major classification, such as the ANZSIC, poses a number of significant issues for statistical agencies and users of the statistics. Business registers need to incorporate the new classification, statistical collections need to be redesigned and new outputs produced, and consideration needs to be given to backcasting statistical series on the new basis.

These activities are costly and pose some risks to the normal operations of the statistical agencies and users of industry classification structures. Implementation of the changes needs to be well coordinated across the time series involved and the changes need to be effectively communicated to users.

Implementation of ANZSIC 2006 will therefore take considerable time. While the review was completed in December 2004, further time was needed for development of the necessary tools to support its implementation, including this publication. There will be a progressive release of statistics on the new basis from 2007 onwards. Users will be kept informed about the implementation of ANZSIC 2006 through separate information releases issued by both agencies.

Correspondences (or concordances) between ANZSIC 2006 and ANZSIC 1993 are shown in the Correspondences section, together with correspondences between ANZSIC 2006 and ISIC Rev. 3.1.

A range of other ANZSIC products and services are available for external users to assist with the correct classification of businesses. These include the computer assisted coders and the ANZSIC class change tables. These are available to users from the ABS and Statistics NZ web sites, www.abs.gov.au and www.stats.govt.nz respectively.

For more information about the ANZSIC and its associated products and services, contact ABS, PO Box 10, Belconnen, ACT 2616 or contact ABS National Information Referral Service:

Phone: 1300 135 070  or  +61 2 92 684 909 (outside of Australia)
E-mail: client.services@abs.gov.au
ABS web site: www.abs.gov.au

For more information about the ANZSIC and its associated products and services, contact Statistics NZ, P.O. Box 2922, Wellington or contact Statistics NZ's Information Centre:

Phone: 0508 525 525 (toll free in New Zealand) +64 4 931 4600 (outside of New Zealand)
E-mail: info@stats.govt.nz
Statistics NZ web site: www.stats.govt.nz

To use statistical information about business units effectively, it is first necessary to organise that information into categories suitable for economic analysis. This can be done by using different classifications depending on the particular interests of users.

An industry classification is one way of organising data from a business unit perspective. It provides a standard framework under which units carrying out similar productive activities can be grouped together, with each resultant group being referred to as an industry. The term industry is used in its widest context, covering the full range of economic activities undertaken to produce both goods and services.

Each individual class is defined in terms of a specified range of activities. It is common for a business unit to engage in a range of activities wider than those designated as belonging to a particular class, and when this occurs, we classify the unit based on its predominant activity.

Activities undertaken which belong to classes other than that to which the unit is classified, are described as its 'secondary activities'. The secondary activities of a unit play no part in assigning the class to which the unit is classified, but are useful for coverage and specialisation ratio analysis. Refer to the Industry homogeneity section for the definition of coverage and specialisation ratios.

In an industrial classification, each unit has to be classified uniquely to one class so that only those units with the same predominant activities are brought together to form a class.

The ANZSIC has been designed primarily as a classification of Type of Activity Units (TAUs) in the Australian statistical system, and Kind of Activity Units (KAUs) in the New Zealand statistical system, although it can also be used for classifying some other unit types. The TAU and the KAU are defined in Appendices 1 and 2 respectively.

The ANZSIC is a hierarchical classification comprising four levels, namely Divisions (the highest level of the classification), Subdivisions, Groups and Classes (the lowest level of the classification).

All classifications, particularly those that are international or national statistical standards, should satisfy a number of fundamental principles. These include that the classification:

• is comprehensive in its coverage;
• has categories which are mutually exclusive;
• has categories which can be readily understood by users and data providers;
• is hierarchical to support its use for different statistical purposes;
• should remain stable over a period of time, or be designed so that it can easily be updated; and
• be based on a strong and consistently applied conceptual framework.

The conceptual framework adopted for the development of ANZSIC 2006 uses supply-side based industry definitions and groupings. Using this approach, units engaged in similar productive activities are grouped together. Units in an industry will therefore exhibit similar production functions (a term used to describe the transformation of intermediate inputs, through the application of labour and capital, to produce outputs).

In ANZSIC 2006, this framework has been applied more rigorously and consistently than before. Industry statistics will be more consistently compiled and analytically useful as a result. Refer to the Supply-side concept section for more detail.

Periodic reviews of major classifications such as the ANZSIC are required to ensure they remain current and relevant. They need to reflect new and emerging industries, and the new business methods and technologies applied in the production of goods and services. They also need to reflect new and emerging user requirements for industry classified statistics.

In the interests of international statistical comparability, ANZSIC 2006, as far as practicable, aligns at the two digit subdivision level with the proposed ISIC. Rev. 4.

A basic principle in the ANZSIC is that industry classes should reflect the way activities are actually organised in the real world. This ensures that industry classes reflect realistic and recognisable segments of Australian and New Zealand industry and that the businesses classified to them have the necessary data for statistical collections.

Generally, industry classes were formed only if they were economically significant in either Australia or New Zealand. In Australia, employment had to be at least 3,500, or annual turnover at least $AUS 250 million. In New Zealand, employment had to be at least 700, or annual turnover at least $NZ 50 million. Applying this test helps ensure that the number of classes formed is justified on cost/benefit grounds and that a reasonable balance is achieved across the whole of the classification.

The criteria were modified for those industries where the standard measures of output (e.g. value added, turnover) gave a misleading picture of economic significance e.g. wholesale trade, retail trade, financial and insurance services, public administration and safety. In these cases, additional classes were not formed simply because the economic significance criterion was exceeded. Other, more relevant criteria needed to be satisfied.

As noted above, the conceptual framework adopted for the development of ANZSIC 2006 uses supply-side based industry definitions and groupings. Using this approach, business units engaged in similar productive activities are grouped together.

Following this approach, business units in a particular class will use similar inputs and apply similar transformation processes to produce similar outputs. The study of production (e.g. industry performance, productivity and structural analysis) requires an industrial classification that follows this type of framework.

The supply-side concept can be strictly applied in developing only the lowest level of the classification (the class level). This is the level at which homogeneity of economic activity is greatest. For example, the application of this concept has led to the creation of a class for fossil fuel electricity generation and a separate class for hydro-electricity generation even though the final product, i.e. electricity, is the same.

As indicated above, industry classes should be comprised of businesses that undertake similar economic activities i.e. they should be as homogeneous as possible. In the development of ANZSIC 2006, the ABS and Statistics NZ have used the information that is available to assess and increase homogeneity at the class level. This has helped ensure that the classification reflects the structure and organisation of Australian and New Zealand industry.

Homogeneity can be measured by the calculation of specialisation and coverage ratios. The specialisation ratio measures the extent to which units belonging to a particular class engage in the activities designated as primary to that class. The coverage ratio measures the extent to which the activities designated to a particular class are undertaken by units belonging to that class.

It is highly desirable that the specialisation and coverage ratios exceed 70 per cent for the formation of individual classes. This minimises the extent to which the output of each class includes output of activities which belong to other classes. As a consequence, users of industry statistics should note that classes do not contain all of the units which undertake the activities belonging to that class. Units engaging in these activities on a secondary basis will be classified to a different class according to their predominant activity.

The classification principles set out above for the creation of industry classes in ANZSIC 2006 often reinforce each other. For example, good industry homogeneity helps ensure the classification is on a strong conceptual basis and reflects the real world organisation of units. Economic significance helps ensure the classification reflects the real world organisation of units and that it reflects a contemporary view of Australian and New Zealand industry.

On the other hand, the review and development of the classification has to balance the often competing demands of relevance, continuity and comparability. The principles applied for the definition of classes are sometimes in conflict. For example, international comparability cannot be fully achieved if there is a different structure in Australian and New Zealand industry, or if some internationally recognised activities are not significant in the two countries. In these circumstances, judgement needs to be exercised to determine the most appropriate outcome.

As classes are grouped into higher levels of aggregation, the degree to which units exhibit similar production functions generally falls. At the higher levels of the classification, emphasis moves increasingly to the output side of the production function, so that at the top of the hierarchy, divisions are created and defined by looking more at what is produced, and less at the activities undertaken to produce that output.

This has the important consequence of causing units with very different inputs and transformation processes to be classified to the same division, due to similarities in the intent or purpose of the outputs produced. For example, hospitals and homoeopaths are both classified to the Health Care and Social Assistance Division, based on their common purpose to improve human health. This is typical of the Service Divisions.

At the division level, the main purpose is to provide a limited number of categories which provide a broad overall picture of the economy, and are suitable for summary tables in official statistical publications. Weight is also given to maintaining continuity with previous editions of the classification.

Between the highest (Division) and lowest (Class) levels of the classification, combination of groupings is driven by a number of factors including:

• improving the international comparability of the classification at the Sub-division level;
• identifying groups of economic activities with significantly different production functions; and
• promoting some of the more economically significant industries to this higher level of the classification.

For example, subdivisions created in ANZSIC 2006 specifically to improve international comparability include:

• Subdivision 12: Beverage and Tobacco Product Manufacturing;
• Subdivision 44: Accommodation;
• Subdivision 55: Motion Picture and Sound Recording Activities;
• Subdivision 58: Telecommunications Services;
• Subdivision 60: Library and Other Information Services; and
• Subdivision 70: Computer System Design and Related Services.

Examples of subdivisions created to better identify groups of economic activities with significantly different production functions include:

• Subdivision 26: Electricity Supply; and
• Subdivision 27: Gas Supply.

Finally, examples of subdivisions created to promote some of the more economically significant industries to this higher level of the classification include:

• Subdivision 11: Food Product Manufacturing; and
• Subdivision 77: Public Order, Safety and Regulatory Services.

As outlined in the Introduction section, industries are formed by grouping business units that are mainly engaged in undertaking similar economic activities. Individual business units may use structures for their taxation, management, financing, production and employment functions which differ from the structures used for the same purposes by other business units. For statistical purposes, it is essential that standard definitions of business units are applied, so that the statistics required are able to be collected and compiled without gaps or duplication.

The primary purpose of developing a standard industrial classification is to enable the compilation of industry statistics on a comparable and consistent basis across different statistical collections and over time. This would be extremely difficult if different business unit structures were used in different collections, or in different time periods for some collections.

To support the integrated and efficient operation of many diverse statistical collections concurrently, statistical agencies use central registers of business units, delineated according to the definitions and rules set out in their units models. Among other things, the models specify which unit types are to be classified to an industry. The industry codes assigned are maintained on the central business register. Statistical agencies use a central business register to identify the business frames for their collections, which enable survey populations to be selected.

The units model enables the statistical agency to best collect the broad and diverse range of data it requires in respect of businesses, in order to produce the range of statistical outputs required by key users. Among other things, it should also take into account the costs to businesses of providing the necessary information and the costs to the statistical agency of maintaining the central business register.

The System of National Accounts, 1993 (1993 SNA) acts as one of the most important coordinating frameworks for economic statistics. Firstly, it acts as the conceptual framework for ensuring the consistency of definitions and classifications in different, but related, fields of statistics. Secondly, it provides an accounting framework for ensuring the numerical consistency of data drawn from different sources.

In the real world, economic entities engaged in the production of goods and services vary considerably in their legal, accounting, organisational and operating structures. The terminology used to refer to these units also varies considerably from country to country. Two broad types of units are defined in the 1993 SNA - institutional units and producing units. These are defined for the purpose of compiling statistics within an integrated and coherent framework (the 1993 SNA).

The System of National Accounts' (SNA) origin traces back to the report of the Sub-Committee on National Income Statistics of the League of Nations Committee of Statistical Experts which was published in 1947. This was followed by a report called 'A System of National Accounts and Supporting Tables' which was released in 1953. The 1953 report was slightly modified in 1960 and in 1964. Then in 1968, the United Nations Statistical Commission approved the revised SNA (1968 SNA). The next revision that occurred (and the most current version of the SNA) is the one unanimously recommended by the Statistical Commission for adoption, the 1993 SNA. A further major revision of the 1993 SNA is well advanced and expected to be endorsed in 2008.

Unit models provide definitions of the units used, describe the relationships of the different unit types to each other, and identify the information held about each unit type on the business register. They form the basis for establishing and maintaining business structures on the business register for use in statistical collections. They enable qualitative and some quantitative comparisons to be made of statistical information collected from different unit types.

The unit models currently used by the ABS and Statistics NZ are outlined in Appendices 1 and 2 respectively. The unit models described include both the institutional and producing units used by the two agencies. While institutional units are discussed, the major emphasis in this publication is on the producing units used to compile industry statistics.

Institutional units are at the level at which financial and balance sheet accounts are maintained and from which a consolidated financial position can be derived. The primary classification of institutional units is to institutional sector, rather than to industry.

To study production and production functions, producing units need to be defined that are as homogeneous as possible in terms of the economic activities undertaken. The 1993 SNA recommends that producing units with the same principal activity be grouped into industries according to the ISIC. Individual countries use their own national industrial classifications, which are aligned with the ISIC to the extent possible.

Statistical agencies periodically review their unit models and their business register maintenance strategies, particularly when there are major changes in the environment in which they apply, or when significant new information sources become available to update their business registers.

The Type of Activity Unit (TAU) in Australia and the Kind of Activity Unit (KAU) in New Zealand are the main producing units used for the compilation of industry statistics in the two countries. These unit types are defined in Appendices 1 and 2 respectively.

In the review of the ANZSIC, the classification principles set out in the Nature and objectives of the classification section were applied to these particular unit types. Therefore, ANZSIC 2006 is primarily a classification of TAUs in Australia and KAUs in New Zealand.

The 1993 SNA and the ISIC use the term 'establishment' to refer to their recommended producing unit. The 1993 SNA defines an establishment as 'an enterprise, or part of an enterprise, that is situated in a single location and in which only a single (non-ancillary) productive activity is carried out or in which the principal productive activity accounts for most of the value added'.

It further states that 'although the definition of an establishment allows for the possibility that there may be one or more secondary activities carried out, they should be on a small scale compared with the principal activity. If a secondary activity within an enterprise is as important, or nearly as important, as the principal activity, then that activity should be treated as taking place within a separate establishment from that in which the principal activity takes place.'

ISIC Rev. 3.1 follows the 1993 SNA unit definitions. However, ISIC Rev. 3, which predated the 1993 SNA, defined a wider range of producing units, including a kind of activity unit and an establishment unit. This recognised that the establishment unit was not suitable for all industry statistics.

Both Australia and New Zealand define their main producing unit at a somewhat higher level than that recommended by the 1993 SNA. Neither restrict their unit to a single physical location and both accept a lower level of homogeneity of activity in forming units compared with the 1993 SNA. This reflects the fact that the 1993 SNA provides the conceptually ideal treatment, which is not constrained by the practical operational issues which unit definitions have to address in each country, such as availability of data from standard business accounts at different levels of business unit.

The KAU defined in ISIC Rev. 3 was the origin of the similarly named unit in the New Zealand units model. It was also more closely aligned with the management unit previously used by the ABS, and its currently used TAU, than the establishment unit.

The basic method for classifying units to categories in the ANZSIC is to classify each unit according to its predominant activity. The ABS and Statistics NZ classify each unit at the finest level of the classification. The hierarchical nature of the classification also means that the unit's classification at the ANZSIC group, subdivision and division levels can be readily established. This characteristic allows statistics to be produced at all levels of the classification if required. If users of the classification do not require the lowest level of detail of the classification, they can classify units to a higher level (e.g. at the two digit subdivision level) to suit their respective needs.

At each level of the classification, a unit can be classified to only one category. Categories for the classification of a unit at the different levels must be related to each other by aggregation or disaggregation i.e. a unit classified to the Manufacturing Division can be classified to a subdivision only within the Manufacturing Division.

There are few problems classifying units engaged in only one kind of activity (i.e. a unit would be classified according to that one activity it undertakes). While it would be ideal if units could be defined such that each unit undertakes only a single activity, this is not practicable in the real world due to data availability, provider load and resource constraints.

Many units are engaged in activities which belong to two or more industry categories, and for these 'multi-activity' units it is necessary to specify methods for classifying them to their predominant activity. This section describes these general methods of classification, including assessing the predominant activity of a unit.

As recommended by the ISIC, the ABS and Statistics NZ use the concept of Value Added (refer to the Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0) for the definition of Value Added) to determine the predominant activity of a unit undertaking multiple activities, that is the activity with the highest value added is the predominant activity.

In some cases it is difficult to determine predominance of a multi-activity unit based on value added because the necessary data are not available. In these instances, a proxy for value added is used. These measures are listed in order of preference below:

• sales of goods and services;
• wages and salaries; or
• number of employees.

Care needs to be taken with the use of these proxy measures in determining the predominant activity of a unit as they may not be the most reliable indicator of value added. This is particularly so in the case of units undertaking both market and non-market activities, where reliance on measures of sales of goods and services is inappropriate.

For example, a Parent and Teacher Association receives some of its income from the sale of goods through the operation of a school canteen. Using sales as the proxy for value added in this case would result in this unit being classified to Class 4512 Takeaway Food Services. However, the main function of the unit is to act as an interest group promoting educational issues and not operating a takeaway food outlet. Therefore, the Parent and Teacher Association would be classified to Class 9559 Other Interest Group Services n.e.c.

Vertically integrated units are a particular type of multi-activity unit, where the different stages of production are carried out in succession by different parts of the same business unit. The output of one stage becomes the input to the next stage, with only the output of the final stage being sold on the market.

Vertical integration is common in some multi-activity units involved in both agricultural and manufacturing activity e.g. grape growing and wine manufacturing; olive growing and olive oil product manufacturing; chicken farming and chicken meat processing; pig farming and pig meat processing. These combinations of activities are often undertaken by single business units, often on the same premises. Vertical integration also occurs in a number of other industries and circumstances.

Vertically integrated units are classified according to their predominant activity, using value added in the same way as other units. If no information is available to assess value added, or there are two or more activities of equal value, then the unit is classified to the activity which represents the last or final stage of production. This is where most of the value added is generally assumed to lie.

In some circumstances, calculation of value added for each of the activities undertaken by vertically integrated units is not possible due to the lack of market transactions to value the activities. In these cases, it may be appropriate to use one of the proxy measures discussed previously in this chapter. If it is clear that an activity is predominant, but no actual data are available, the unit should be coded to its predominant activity.

The ANZSIC contains a number of classes which are defined as undertaking combined activities. The most commonly recognised area where these activities occur is in agriculture, where farms are specifically set up to produce both livestock and crops, or combinations of different livestock.

The ANZSIC includes two combined activity classes within Division A Agriculture, Forestry and Fishing, namely Class 0144 Sheep-Beef Cattle Farming and Class 0145 Grain-Sheep or Grain-Beef Cattle Farming. These classes are representative of common combinations of farming activities in Australia and New Zealand.

Units engaged in these combined farming activities have fundamentally different production functions when compared with units specialising in farming one type of livestock or crop, as different types of inputs, capital and labour are required. While the ABS and Statistics NZ both use the ANZSIC to classify agriculture units, they have previously applied different coding rules to assign units to the combined farming classes. For ANZSIC 2006, the two statistical agencies use the same coding rules.

Other ANZSIC classes that include combined activities are Classes 3601 General Line Grocery Wholesaling, 4110 Supermarket and Grocery Stores and 4260 Department Stores. If these combined activity classes were not formed, the classification would fail to recognise distinct and identifiable segments of Australian and New Zealand industry.

There are two different methods used to classify business units to industry, in accordance with the principles outlined above:

• classification to categories at the broadest level of the classification in the first instance i.e. an ANZSIC division, and subsequently to categories at successively lower levels ('top-down'); or
• classification directly to a category at the lowest level of the classification i.e. an ANZSIC class.

Using the top-down method, units are first classified to a division, then to a subdivision within that division, and so on until the unit is finally classified to a class. The ABS and Statistics NZ use the top-down method of classification to the ANZSIC. ISIC also recommends the use of this method because it ensures better consistency of aggregate data at the higher levels of classification.

Using the direct method, units are classified directly to the lowest level of classification (i.e. ANZSIC class). Therefore, the unit will inherit the higher level categories to which the class belongs.

In some cases very different outcomes can result from the two methods. For example, a unit undertakes activities which are primary to three classes where:

• 40% of its income is derived from activities of wholesaling motor vehicles;
• 35% of its income is derived from retailing motor vehicles; and
• 25% of its income is derived from retailing motor vehicle parts.

Using the 'top-down' method.

Step 1 Determine the division to which the unit belongs.

In this case the unit would be classified to Division G Retail Trade, as this is the Division where most activity occurs (i.e. 60% of the unit's income is derived from its retail activities, compared with 40% from wholesale activities).

Step 2 Determine the subdivision to which the unit belongs.

In this case the unit would be classified to Subdivision 39 Motor Vehicle and Motor Vehicle Parts Retailing, as both retail activities belong to this subdivision.

Step 3 Determine the group to which the unit belongs.

In this case the unit would be classified to Group 391 Motor Vehicle Retailing, as the income derived from retailing motor vehicles is greater than that derived from retailing motor vehicle parts.

Step 4 Determine the class to which the unit belongs.

In this case the unit would be classified to Class 3911 Car Retailing, as the car retailing activity is predominant.

Using the direct method, the unit would be classified according to the largest single activity undertaken. Therefore, based on the fact that the largest single income - earning activity of the unit is derived from wholesaling motor vehicles, the unit would be classified to Class 3501 Car Wholesaling. This example illustrates how different classification outcomes can result from the use of either the top-down or the direct method of classification.

The top-down method of classification is the preferred method of the ABS, Statistics NZ and ISIC.

It is common for businesses to change their mix of activities over time such that the predominant activity of a unit can be affected. This can occur for many reasons, including changes in product profitability, seasonal price changes, growth opportunities, the release of new products or business restructuring.

In some situations, minor shifts in the value of sales from the separate activities undertaken can result in a temporary change in the unit's predominant activity. Theoretically, this change could result in a change to the ANZSIC of the unit.

Temporary fluctuations, based on minor shifts in activity, should not be reflected in the unit's industry classification. Resistance factors can be applied which reduce 'flipping' of units between classes from year to year. This ensures that any changes in classification reflect relatively permanent changes in the predominant activity of the business.

Both the ABS and Statistics NZ apply ISIC recommended resistance factors to prevent units changing industry on the basis of temporary activity shifts. This rule states that the change to a unit's activity must be in place for a minimum of two years before a change in the ANZSIC can be applied.

Apart from the general classification principles, methods and issues outlined above, a wide range of more specific issues arise in the treatment of certain activities in the ANZSIC. The more significant of these are discussed in A guide to the coding of certain activities section of this publication.

This section provides a guide to the treatment to be applied in ANZSIC 2006 to a number of complex industry coding issues. The guidelines include the treatment to be applied to issues which cut across the whole economy, as well as those specific to particular industries.

The classification of government-owned units in an industry classification may cause confusion given the existence of the category titled government or public administration. In ANZSIC 2006, the treatment of government-owned and controlled units is the same as that for non-government units i.e. units are classified according to their predominant activity. Ownership is not used as a criterion for a unit's classification to industry.

Government units producing goods and services (e.g. education or health) are classified to the same industry as private sector units engaged in similar activities. The Public Administration and Safety Division includes all units primarily engaged in providing legislative, executive and judicial activities; or safety activities such as defence or policing. For a full definition of the Public Administration and Safety Division, see the Division definitions section.

The implication of this treatment is that private sector units engaged in public administration or safety activities are classified to the Public Administration and Safety Division. This represents a significant change from ANZSIC 1993, where the Government Administration and Defence Division was restricted to government units.

A large number of new business units start up in any given period. Before commencing regular operations, some of these units need to undertake significant capital formation. In many instances, these units may decide to undertake the capital formation (e.g. construction of a furnace, a railway line, a factory or a mine) themselves. This raises the issue of whether these units are primarily engaged in construction activity, or engaged in the purpose for which the construction is being undertaken.

ANZSIC 2006 classifies a unit which undertakes own account capital formation to the industry covering its intended future operations, rather than to construction.

There are a number of ANZSIC 2006 industry divisions which contain support service categories:

• Division A Agriculture, Forestry and Fishing;
• Division B Mining;
• Division K Financial and Insurance Services; and
• Division P Education and Training.

ANZSIC 2006 support service categories were created when it could be established that the output of an activity was wholly consumed by units classified to a single division. For example, support services classes such as 0522 Shearing Services and 0510 Forestry Support Services have been included in Division A Agriculture, Forestry and Fishing, as the outputs of the activities identified are wholly consumed by units classified to this division.

When a service is not wholly consumed by units classified to a single division, it is classified to a 'general service' division, according to the type of service being provided. For example, veterinary services and packaging services are typically consumed by units in more than one industry division. Therefore, they are classified to the appropriate classes in Division M Professional, Scientific and Technical Services and Division N Administrative and Support Services respectively.

The increasing use of contractors in the economy can cause confusion with respect to the appropriate coding of units described as 'contractors', 'subcontractors' or 'service companies'. The activities of units called 'contractors', 'subcontractors' and 'service companies' are in many ways the same, but there are some important distinctions in their classification. There may also be confusion between what constitutes a contracting unit and a labour supply service (referred to as Contract Staff Services in ANZSIC 1993).

Units called contractors can undertake a variety of activities across all industries in the economy. A contractor is commonly engaged to complete one or more of the suite of tasks embodied in the entire production process (e.g. a cleaning or catering task). In these situations, the unit is classified according to the activity it undertakes and not to the same industry as the unit contracting it. For example, a unit providing laundry services to a hospital does not get classified to the Health Care and Social Assistance Division. Instead, it is simply classified to the Laundry Services Class, as the unit is providing a laundry service.

Another common arrangement is where a unit undertakes the whole of a production process on a contract basis for another unit, and in doing so supplies the entire workforce, including supervisory staff. In this case, the contracted unit is classified according to the activity it undertakes, not to the more general Labour Supply Services Class.

Units called subcontractors, like contractors, also undertake a variety of activities across all industries in the economy. These units may or may not work under the direction of the client business and can often be a sole trader i.e. a one-person business. These units are contracted to other businesses to perform one or more activities.

Traditionally, these units have been concentrated in the construction, mining and agricultural industries. However, these working arrangements have spread significantly to other industries. Subcontracting is treated in the same way as contracting in the ANZSIC, i.e. classified according to the predominant activity of the subcontractor and not to the industry of the client business they are contracted to.

Units referred to as service companies have caused difficulties in the past with respect to industry classification. While service companies appear to be similar to contractors, they have some significant differences. Service companies are usually set up by units of the same enterprise group to provide specific services to other units in the group.

Some service companies are established to 'hold' the employees of another, usually related, business. For example, a construction unit may set up a separate company to hold all their employees. The service company then undertakes the construction work on behalf of the first unit on a fee or contract basis. In this case, the service company is deemed to be providing a construction service i.e. the contract is for the completion of a set construction task. 

In such cases, the service company is providing the entire workforce, including the supervisory staff, to the first unit. In general, it is the nature of the activities undertaken by the units known as service companies which determine their industry classification. This is in accordance with the basic industry classification principle that a unit will generally be classified to an industry according to its own predominant activity.

The ANZSIC coding of units providing Labour Supply Services (referred to as Contract Staff Services in ANZSIC 1993) is often confused with contracting and service companies.

The ANZSIC 2006 Class 7212 Labour Supply Services is defined as:

Including units mainly engaged in supplying their own employees to other businesses on a fee or contract basis i.e. where assignments are mainly on a temporary or short-term basis and performed under the supervision of staff of the client unit.

These units have large numbers of staff on their books and may specialise in the provision of staff in particular industries e.g. trades, nursing, office work etc.

In order to be classified to this ANZSIC class, a unit must satisfy the following conditions:

• the service provided to the client business must be one of labour supply;
• personnel supplied to the client remain employees of the unit providing the labour supply service;
• assignments are performed under the supervision of staff of the client business; and
• the labour supply unit is paid a fee by the client business for supply of the labour.

As noted above, where a unit provides the entire workforce, including the supervisory staff, to the client business, it is classified according to the nature of the activity being undertaken for the client business. The length of time covered by the contract is not a determining factor in these cases.

Repair and maintenance activities are carried out on a wide range of items of plant, equipment, household appliances and personal goods. The nature of repair and maintenance activities can vary, from engineering operations such as engine reconditioning, to minor servicing operations such as replacing a part in a washing machine. In ANZSIC 1993, these activities were classified to a number of different divisions. In ANZSIC 2006, the classification of these activities follows the production function principle.

Two distinct cases arise with respect to businesses mainly engaged in repair and maintenance activities. Repair and maintenance activities may involve essentially the same production function as that involved in the creation of the product, or they may involve a clearly different and identifiable production function.

In ANZSIC 2006, units mainly engaged in repair and maintenance activities involving similar production functions to those used for the creation of the original products, are classified to the industry where units creating the new product are classified.

In these cases, the degree to which the factors of production (capital and labour) are interchangeable between the creation and the repair and maintenance activities is very high. These repair and maintenance activities are included in the appropriate classes.

Examples include:

• aircraft repair and maintenance (Class 2394);
• ship and boat repair and maintenance (Classes 2391 and 2392);
• residential and non-residential buildings repair and maintenance (Classes 3011, 3019 and 3020); and
• highway, road, street, bridge or airport runway repair and maintenance (Classes 3101 and 3109).

Where units are mainly engaged in repair and maintenance activities involving different production functions to those used for the creation of the original products, they are classified to the relevant classes in the Other Services Division. Subdivision 94 Repair and Maintenance has been created within that division for repair and maintenance activities of this type.

Examples include:

• automotive repair and maintenance (Classes 9411, 9412 and 9419);
• domestic appliance repair and maintenance (Class 9421);
• electronic and precision equipment repair and maintenance (Class 9422);
• other machinery and equipment repair and maintenance (Class 9429); and
• clothing, footwear and personal accessories repair (Class 9491).

While all units mainly engaged in repair and maintenance activities involving distinctly different production functions are classified to this subdivision, some repair and maintenance activities are predominantly undertaken by units which either create the new products, or trade them. Creation of a separate class for these repair and maintenance activities anywhere in the ANZSIC would likely result in low coverage ratios. Units undertaking these activities as their predominant activity are classified to Class 9499 Other Repair and Maintenance n.e.c.

Where repair activities are carried out as a secondary activity by units which are mainly engaged in some other activity, the units are classified to the class to which their main activity is primary.

The treatment of installation activities has been problematic, as this activity is often undertaken in conjunction with other activities (e.g. manufacture or sales), as well as in isolation. Installation refers to the placement of a product into position for use, and encompasses such activities as the installation of hot water systems, air conditioning and elevators. Where another term for describing an installation-type activity appears more appropriate in terms of general usage, that term is used e.g. erection, assembly, fixing.

It is common for some business units engaged in manufacturing, construction, and wholesale or retail activities to install the products they sell to other businesses or households e.g. a business selling hot water systems to members of the public may arrange the installation of the system in the purchaser's dwelling.

Where the installation is performed by the business unit selling the product, the installation activity is treated as a secondary activity of that unit. This is because the value added of the installation activity is normally less than that of the principal activity undertaken. Where installation activities are carried out as a secondary activity, by units mainly engaged in another activity, the units are classified according to their main activity.

The installation activities performed by these units are incidental to the primary activity of the unit (i.e. an elevator manufacturer may also install the lift in a building). Consistent with the classification principle of predominance, these units are classified according to their main activity (i.e. in the case of the elevator manufacturer to the appropriate Manufacturing class).

However, there are many units that specialise in providing installation activities only. In these cases, 'installation activities' are the predominant activity for the units and are coded accordingly. The classification contains a number of classes where such installation activities are the primary activities of the class (see the Classification of installation activities in ANZSIC 2006 table).

Business units which sell products requiring installation by technical or professional staff may subcontract the installation activities to other firms, as these activities may not be seen to be part of their core business and/or they may require particular skills. Some business units specialise in the installation of particular products or groups of products and these units are classified to specialist installation classes. The Classification of installation activities in ANZSIC 2006 table summarises the classification of the different types of installation activities in ANZSIC 2006.

Rental, hiring and leasing might be considered a single kind of activity which could be made primary to one class in the ANZSIC. The term, however, encompasses a range of significantly different activities which are treated as follows:

Units mainly engaged in the leasing of equipment to other businesses under financial lease arrangements are classified to Class 6230 Non-Depository Financing, in Division K Financial and Insurance Services, as they are providing finance for the purchase of the equipment.

Renting, hiring and leasing heavy machinery with an operator is included in the division where the equipment is predominantly used. This is because the output being provided is a particular service, rather than just the provision of equipment for rent, hire or lease. For example, when construction machinery is hired in conjunction with the operator, the service being paid for is a construction service and not just for the use of equipment for a day. Examples of hire with operator include:

• hire of construction machinery with operator (Class 3292);
• hire of motor vehicles with driver (Class 4623);
• hire of boats with crew (Class 4820); and
• hire of aircraft with crew (Class 4900).

Other renting, hiring and leasing activities not involving an operator are mostly classified to the appropriate classes in Division L Rental, Hiring and Real Estate Services. For example, where a unit is mainly engaged in renting or leasing land or property for use by another business, the unit is classified to Class 6712 Non-Residential Property Operators in Division L, and not to the industry of the businesses served. No distinction is made as to whether the service provided is for business or household use.

An exception to this treatment exists for units mainly engaged in the hire of linen or uniforms. These units are classified to Class 9531 Laundry and Dry-Cleaning Services, in Division S Other Services, as the hire is typically an integral part of a broader laundry service.

The term agistment is often used to refer to two types of broad activities:

• husbandry of animals on a fee or contract basis; and
• leasing of vacant agricultural land.

In ANZSIC 2006, agistment is defined only as the practice where a business unit takes in some or all of another unit's livestock in exchange for a fee for feed and basic care. The practice where a business unit owns and leases its land to another unit to graze its livestock is not considered agistment.

Agistment services have been included as primary activities in the appropriate classes of Subdivision 01 Agriculture, namely horse farming, sheep farming specialised, dairy cattle farming and beef cattle farming. Units that carry out activities on a fee or contract basis should be classified to the same class as units that undertake the same activity for their own account and risk.

Units engaged in owning and leasing land, whether for agricultural or any other non-residential purpose, are classified to Class 6712 Non-Residential Property Operators, in Division L Rental, Hiring and Real Estate Services.

Beneficiation is the process whereby a mineral ore is reduced to particles that can be separated into mineral and waste, the mineral then being suitable for further processing or direct use. The operations that take place in beneficiation are primarily mechanical, such as grinding, washing, magnetic separation and centrifugal separation.

Beneficiation is treated as a mining activity, rather than as a manufacturing activity. Manufacturing operations on mineral inputs primarily use chemical and electro-chemical processes, such as electrolysis and distillation. However, there are a number of basic chemical processes which are treated as beneficiation of the mineral, rather than as manufacturing processes.

In the previous version of the ANZSIC, manufacturers who sold their produce directly to end consumers were in some cases, e.g. bakeries, classified as retailers. In ANZSIC 2006, this treatment has been changed so that units that undertake both the manufacture and sale of their product, within the one unit, are classified to manufacturing.

The 'trade' activity undertaken by the manufacturer in these cases cannot be considered wholesale or retail. In ANZSIC 2006, trade is defined as the purchase and onselling of largely untransformed goods. A manufacturer starts with raw materials and uses capital and labour to transform those materials into a new final product. By this definition, manufacturers cannot wholesale or retail goods they have manufactured themselves.

Where there is a mix of manufacturing and wholesale or retail activities, the boundaries between industries may not always be clear. If, in addition to the sale of own account produced goods (a manufacturing activity), the unit also sells products sourced from other business units (a wholesale or retail activity), the classification of the unit is determined by assessing the predominant activity in the normal way.

An example of such a multi-activity unit is a business which sells to the public shoes it has manufactured itself, as well as shoes purchased from other businesses. It includes both manufacturing and retail activities, with sales sourced from both own account production and external sources.

There is no special difficulty classifying units mainly engaged in the production of goods or services on a contract, commission or fee for service basis for other units. However, difficulties arise in determining the major activity of units which have goods or services produced for them on a contract, commission or fee for service basis, where these goods or services are included in the final output of the unit.

Units that arrange the manufacture of their products by another unit, paying the sub-contracted unit a commission, are referred to internationally as 'converters'. The treatment of converters was a significant boundary issue in the development of ANZSIC 2006, because decisions made regarding the treatment of their activity affect the scope of the manufacturing, wholesale and retail divisions. The treatment of converters has been clarified in the definitions of these divisions for ANZSIC 2006.

Historically, these units have been classified to the manufacturing division, because the businesses concerned often previously manufactured the goods themselves. They have since, for various reasons, sub-contracted out the manufacturing activity to other units, either in the same country or abroad.

While converters do not physically manufacture the goods, they often own the inputs to the manufacturing process, the copyright to the design of the goods, bear the commercial responsibility and risk for the goods produced, and exert significant control over the production process.

ISIC currently classifies these units to manufacturing, provided they exert some control over the design of the goods or the manufacturing process. ISIC Rev. 3.1 specifically states that ownership of the material inputs is required for a converter to be classified to the manufacturing division:

Units which sell goods or services under their own name, and for their risk, but have the actual production done by others, are to be classified as if they produce the goods or services themselves, provided that they have considerable influence on the conception of the products or, in the case of the manufacturing industry, they own the materials to be transformed.

For ANZSIC 2006, a pragmatic approach has been taken for the treatment of converters, along the lines of the existing treatment in ISIC Rev. 3.1. Converters of manufactured goods are classified as follows:

• units that own the material inputs and own the final outputs, but have the production done by others, are classified to the manufacturing division; and
• units that do not own the material inputs, but own the final outputs and have the production done by others, are not classified to the manufacturing division. They are classified either as a wholesaler or a retailer.

Units which undertake manufacturing for other units on commission are classified to the manufacturing division. The majority are classified to the industry class which includes the manufacturing activity they undertake. The only exceptions are:

• where the sub-contracted unit manufactures the goods as part of an overall production process, the sub-contractor will be classified to the same industry as the converter. For example, car manufacturing is considered one activity although it includes sub-activities such as casting, forging, welding, assembling, painting, etc. If the sub-contracted unit manufactures a specific part (such as engines or gear boxes) as an integral part of the car manufacturing, the sub-contracted unit is classified under car manufacturing; and
• where the sub-contracted unit manufactures a variety of goods and the predominance of particular goods cannot be established, the sub-contractor will be classified to the relevant manufacturing n.e.c. class.

The ANZSIC 2006 treatment of commission-based wholesaling differs from that adopted in ANZSIC 1993. Units mainly engaged in undertaking the purchase and/or sale of finished goods mainly to businesses on a commission basis are classified to Class 3800 Commission-Based Wholesaling unlike in the previous ANZSIC where these units were classified to various wholesaling classes depending on what the units were selling. The units have fundamental differences in their production functions when compared with non-commissioned wholesalers. These differences are based on the capital and labour requirements by the two activities.

Units which provide electronic auction services or electronic markets to other businesses are also included in this class. Class 3800 is the sole class in Subdivision 38, which therefore has the same title and scope as that of the class.

Consistent with the Wholesale Trade Division, ANZSIC 2006 treats commission-based retailing differently to the non-commissioned activity, as again there are fundamental production function differences between the activities. These differences are based on the capital and labour requirements by the two activities.

Units providing commission buying and/or selling activities to the general public are classified to Division G Retail Trade. Class 4320 Retail Commission-Based Buying and/or Selling has been created for the activities of units mainly engaged in onselling finished goods to the general public on a commission basis.

The paragraph shown here during the release of ANZSIC 2006 in February 2006 had been deleted when ANZSIC 2006 (Revision 1.0) was released.

In ANZSIC 1993, units using transport equipment to provide scenic and sightseeing services could be classified to either the Transport and Storage Division or Cultural and Recreational Services. There was no clear guidance provided to enable users to determine which cases would be classified to either division.

Class 5010 Scenic and Sightseeing Transport has been created in ANZSIC 2006 to accommodate all units mainly engaged in using transportation equipment to provide passenger transport for scenic and sightseeing purposes. Scenic and sightseeing transport activities have certain unique characteristics or production processes distinct from other passenger transportation.

For example, air passenger transport services can be distinguished from the operator of joy flights based on the service being provided, types of aeroplane used, schedules and routes. The joy flight operator will usually operate a small aircraft, during specified 'opening hours', and have different staffing, capital, maintenance and safety requirements than an operator of an air passenger transit service. Similar comparisons can be drawn between the provider of transit rail services, and a unit operating a scenic railway.

There are a number of other factors which distinguish scenic and sightseeing transport activities from general passenger transit services:

• they do not emphasise efficient transportation;
• they may use obsolete vehicles such as steam trains;
• they are local in nature and usually involve a same-day return; and
• they often involve the provision of other services, such as tour commentary.

Many large enterprise groups include one or more business units that may be described as a 'corporate head office' or something similar. The head office may be for the group as a whole, or for a division of the group. These units undertake activities relating to a wide range of functions, some of which are considered to be ancillary activities under the 1993 SNA.

A corporate head office typically provides strategic leadership to related units and exercises significant control over other units within an enterprise group. The Class 6961 Corporate Head Office Management Services caters for units that undertake corporate head office activities and is defined as:

Units mainly engaged in overseeing and managing; exercising operational control; and/or undertaking the strategic or organisational planning and decision - making roles of related units. Units in this class may also hold the securities of the related units for which it undertakes these activities.

Where a corporate head office undertakes a variety of management activities, and it is not possible to determine one that is predominant, the unit will be classified to Class 6961 Corporate Head Office Management Services.

Holding companies typically hold securities (or other equity interests) in other companies for the purpose of owning an interest in, or influencing the management decisions of, these firms. They do not administer or manage those entities whose securities they hold. Units mainly engaged in these activities are classified to Class 6240 Financial Asset Investing.

Where a unit undertakes activities relating to both 'head office' and 'holding company' functions, as outlined above, the unit is classified to Class 6961 Corporate Head Office Management Services.

The treatment in ANZSIC 2006 of units which own copyright and distribution rights differs to that in ANZSIC 1993. In the revised classification, these units are classified to the relevant class in Division J Information Media and Telecommunications, whether or not they actually distribute the works. The works may relate to various products e.g. music recordings, articles, books, radio or television programs, motion pictures, software etc. In ANZSIC 1993, these units were classified to Class 7730 Non-Financial Asset Investors under the Property and Business Services Division.

Owning or having a claim on a copyright, and letting others use it in exchange for a consideration, is seen as the essence of publishing activity, regardless of the nature of the other party involved. The other party may be a business which actually distributes the works, or a member of the public purchasing a copy of the work in some form.

In ANZSIC 1993, various contract packaging activities were classified to different divisions depending on what was being packed. In ANZSIC 2006, no distinction is made on the commodity being packed, with all contract packaging activities included in Class 7320 Packaging Services.

This class includes units mainly engaged in packing goods in bottles, cans, cartons, collapsible tubes, plastic sachets, plastic films or bags or other containers or materials on a contract or fee basis. The services may include labelling and/or imprinting the package.

While there was a broadly equivalent class in ANZSIC 1993, the contents of Class 7320 have been expanded to ensure a more consistent treatment of packaging activities where they are the primary activity of a business unit.

The class now includes the following additional activities:

• packing fresh fruit or vegetables (previously in Division A Agriculture, Forestry and Fishing);
• contract packing of groceries (previously in Division F Wholesale Trade); and
• packing or crating goods for transport (previously in Division I Transport, Storage and Warehousing).

The similarities of the production functions for these activities with other packaging activities indicate that they should be classified to the same ANZSIC class, rather than to the Divisions whose units are the main users of the respective packing services.

The numbering system adopted in the ANZSIC is alphanumeric and has a hierarchical structure (see example below), where the leading alpha character denotes the industry division. The ANZSIC subdivision, group and class levels are denoted by numeric codes.

In the example above, the Manufacturing Division is denoted by the alpha character C. The 'Food Product Manufacturing' Subdivision is represented by the numeric code 11. The 'Meat and Meat Product Manufacturing' Group is represented by the numeric code 111, and the 'Meat Processing' Class is represented by the numeric code 1111.

The ANZSIC has standard classification numbering practices for groups and classes, which are outlined below.

If there is only one group in a subdivision, the three digit group code is the two digit subdivision code followed by a zero. Otherwise, the group codes are created using the two digit subdivision code and adding a number starting with one. No subdivision contains more than nine groups.

Similar conventions apply for creating class numbers within groups as for creating group numbers within subdivisions. No group contains more than nine classes. Where there is a 'miscellaneous' or 'other' class within a group, to include units mainly engaged in activities belonging to the group, but which are not elsewhere classified, a nine is added to the group code to form the four digit class code.

These residual classes do not usually constitute a homogeneous set of primary activities, but rather diverse activities which are not sufficiently significant to justify separate classes in their own right. For the purposes of the classification, they are grouped together and treated as a separate industry to retain the homogeneity of the other industry classes within the group.

Use of a nine in the fourth digit of the code designates a residual class. This enables new categories to be formed within the group by breaking up a class without necessarily affecting the other classes. For example, Group 261 Electricity Generation has 3 classes. These are Class 2611 Fossil Fuel Electricity Generation, Class 2612 Hydro-Electricity Generation and Class 2619 Other Electricity Generation. If in the future, wind electricity generation, which is currently included in Class 2619, becomes a significant activity, a new class can be formed (e.g. Class 2613 Wind Electricity Generation) without affecting Classes 2611 and 2612.

In ANZSIC 2006, changes have been made to all levels and all parts of the classification. New codes have been allocated to industries in ANZSIC 2006 independently of any previous code that has applied. Where the same code exists in both ANZSIC 1993 and ANZSIC 2006, it cannot be assumed that the contents of that category are the same in the two editions.

For example, the ANZSIC 1993 code 1311 is designated as 'Iron Ore Mining', while in ANZSIC 2006 Class 1311 is designated as 'Wool Scouring'. The following table provides users with a comparison between ANZSIC 2006 and ANZSIC 1993 industry division code ranges.

The ABS and Statistics NZ have endeavoured to develop titles for industry categories that are reasonably short, to support their use in statistical tables, and reasonably informative or intuitive in their meaning to users of the classification.

The ability to achieve these objectives is limited, as the objectives are sometimes competing in nature, and some combinations of activities are difficult to describe succinctly. Users of the classification should not rely on industry category titles to fully describe their contents.

For example, without knowing that Class 2611 Fossil Fuel Electricity Generation and Class 2612 Hydro-Electricity Generation were in the same ANZSIC group as Class 2619 Other Electricity Generation, it would be impossible to understand what may be contained in the class 'Other Electricity Generation'. For the definition of particular categories, users should refer to The detailed classification section.

It is nevertheless useful, for various purposes, to simply refer to lists of category codes and titles. Often this is necessary to locate the category or categories of interest for more detailed examination, or to more readily understand the hierarchy of a particular part of the classification.

This section separately includes lists of the:

• Division codes and titles;
• Division and subdivision codes and titles;
• Division, subdivision and group codes and titles; and
• Division, subdivision, group and class codes and titles.

This section contains detailed definitions for all ANZSIC 2006 divisions.

The Agriculture, Forestry and Fishing Division includes units mainly engaged in growing crops, raising animals, growing and harvesting timber, and harvesting fish and other animals from farms or their natural habitats. The division makes a distinction between two basic activities: production and support services to production. Included as production activities are horticulture, livestock production, aquaculture, forestry and logging, and fishing, hunting and trapping.

The term 'agriculture' is used broadly to refer to both the growing and cultivation of horticultural and other crops (excluding forestry), and the controlled breeding, raising or farming of animals (excluding aquaculture).

Aquacultural activities include the controlled breeding, raising or farming of fish, molluscs and crustaceans.

Forestry and logging activities include growing, maintaining and harvesting forests, as well as gathering forest products.

Fishing, hunting and trapping includes gathering or catching marine life such as fish or shellfish, or other animals, from their uncontrolled natural environments in water or on land.

Also included in the division are units engaged in providing support services to the units engaged in production activities.

The Mining Division includes units that mainly extract naturally occurring mineral solids, such as coal and ores; liquid minerals, such as crude petroleum; and gases, such as natural gas. The term mining is used in the broad sense to include underground or open cut mining; dredging; quarrying; well operations or evaporation pans; recovery from ore dumps or tailings as well as beneficiation activities (i.e. preparing, including crushing, screening, washing and flotation) and other preparation work customarily performed at the mine site, or as a part of mining activity.

The Mining Division distinguishes two basic activities: mine operation and mining support activities.

Mine operation includes units operating mines, quarries, or oil and gas wells on their own account, or for others on a contract or fee basis, as well as mining sites under development.

Mining support activities include units that perform mining services on a contract or fee basis, and exploration (except geophysical surveying).

Units in the Mining Division are grouped and classified according to the natural resource mined or to be mined. Industries include units that extract natural resources, and/or those that beneficiate the mineral mined. Beneficiation is the process whereby the extracted material is reduced to particles that can be separated into mineral and waste, the former suitable for further processing or direct use. The operations that take place in beneficiation are primarily mechanical, such as grinding, washing, magnetic separation, and centrifugal separation. In contrast, manufacturing operations primarily use chemical and electro-chemical processes, such as electrolysis and distillation.

The Manufacturing Division includes units mainly engaged in the physical or chemical transformation of materials, substances or components into new products (except agriculture and construction). The materials, substances or components transformed by units in this division are raw materials that are products of agriculture, forestry, fishing and mining, or products of other manufacturing units.

Units in the Manufacturing Division are often described as plants, factories or mills and characteristically use power-driven machines and other materials-handling equipment. However, units that transform materials, substances or components into new products by hand, or in the unit's home, are also included. Activities undertaken by units incidental to their manufacturing activity, such as selling directly to the consumer products manufactured on the same premises from which they are sold, such as bakeries and custom tailors, are also included in the division. If, in addition to self-produced products, other products that are not manufactured by the same unit are also sold, the rules for the treatment of mixed activities have to be applied and units classified according to their predominant activity.

Assembly of the component parts of manufactured products, either self-produced or purchased from other units, is considered manufacturing. For example, assembly of self-manufactured prefabricated components at a construction site is considered manufacturing, as the assembly is incidental to the manufacturing activity. Conversely, when undertaken as a primary activity, the on-site assembly of components manufactured by others is considered to be construction.

The boundaries between the Manufacturing Division and other divisions in ANZSIC can sometimes be unclear. The units in the Manufacturing Division are engaged in the transformation of materials into new products. Their output is a new product. However, the definition of what constitutes a 'new product' can be somewhat subjective. As clarification, the following activities are examples of manufacturing activities included in the Manufacturing Division in ANZSIC 2006:

• Milk bottling and pasteurising;
• Both processing and canning or bottling;
• Fresh fish packaging (including oyster shucking, fish filleting);
• Printing and related support activities;
• Ready-mixed concrete production;
• Leather tanning and dressing;
• Grinding of lenses to prescription;
• Wood preserving and treatment;
• Electroplating, plating, metal heat treating, and polishing;
• Fabricating signs and advertising displays;
• Tyre retreading;
• Ship, boat, railway rolling stock and aircraft repair and maintenance; and
• Substantial alteration, renovation or reconstruction of goods such as transport equipment.

There are some other activities that are often considered 'manufacturing', but for ANZSIC, these are classified in another division. These activities include:

• Logging and production of crops or livestock (included in the Agriculture, Forestry and Fishing Division);
• Construction of structures and fabricating operations performed at the site of construction by contractors (included in the Construction Division);
• Publishing and the combined activity of publishing and printing (included in the Information Media and Communications Division); and
• Beneficiation (included in the Mining Division).

The subdivisions in the Manufacturing Division generally reflect distinct production processes related to material inputs, production equipment and employee skills.

The Electricity, Gas, Water and Waste Services Division comprises units engaged in the provision of electricity; gas through mains systems; water; drainage; and sewage services. This division also includes units mainly engaged in the collection, treatment and disposal of waste materials; remediation of contaminated materials (including land); and materials recovery activities.

Electricity supply activities include the generation, transmission and distribution of electricity and the on-selling of electricity via power distribution systems operated by others.

Gas supply includes the distribution of gas, such as natural gas or liquefied petroleum gas, through mains systems.

Water supply includes the storage, treatment and distribution of water; drainage services include the operation of drainage systems; and sewage services include the collection, treatment and disposal of waste through sewer systems and sewage treatment facilities.

The Construction Division includes units mainly engaged in the construction of buildings and other structures, additions, alterations, reconstruction, installation, and maintenance and repairs of buildings and other structures.

Units engaged in demolition or wrecking of buildings and other structures, and clearing of building sites are included in Division E Construction. It also includes units engaged in blasting, test drilling, landfill, levelling, earthmoving, excavating, land drainage and other land preparation.

The Wholesale Trade Division includes units mainly engaged in the purchase and onselling, the commission-based buying, and the commission-based selling of goods, without significant transformation, to businesses. Units are classified to the Wholesale Trade Division in the first instance if they buy goods and then onsell them (including on a commission basis) to businesses.

Wholesalers' premises are usually a warehouse or office with little or no display of their goods, large storage facilities, and are not generally located or designed to attract a high proportion of walk-in customers. Wholesaling is often characterised by high value and/or bulk volume transactions, and customers are generally reached through trade-specific contacts.

The Wholesale Trade Division distinguishes two types of wholesalers:

• merchant wholesalers who take title to the goods they sell, including import/export merchants; and
• units whose main activity is the commission-based buying and/or the commission-based selling of goods, acting as wholesale agents or brokers, or business to business electronic markets, both of whom arrange the sale of goods on behalf of others for a commission or fee without taking title to the goods.

A unit which sells to both businesses and the general public will be classified to the Wholesale Trade Division if it operates from premises such as warehouses or offices with little or no display of goods, has large storage facilities, and is not generally located or designed to attract a high proportion of walk-in customers.

For units that have goods manufactured for them on commission and then sell those goods, the following treatment guidelines are to be followed:

• units that own the material inputs and own the final outputs, but have the production done by others will be included in the Manufacturing Division;
• units that do not own the material inputs but own the final outputs and have the production done by others will not be included in the Manufacturing Division (these may be included in Wholesale Trade or other divisions); and
• units that do not own the material inputs, do not own the final outputs but undertake the production for others will be included in the Manufacturing Division.

As a result, units that have goods manufactured for them on commission will be included in the Wholesale Trade Division where they do not own the material inputs to the manufacturing process, but take title to the outputs and sell them in the manner prescribed above for typical wholesaling units.

The Retail Trade Division includes units mainly engaged in the purchase and/or onselling, the commission-based buying, and the commission-based selling of goods, without significant transformation, to the general public. The Retail Trade Division also includes units that purchase and onsell goods to the general public using non-traditional means, including the internet. Units are classified to the Retail Trade Division in the first instance if they buy finished goods and then onsell them (including on a commission basis) to the general public.

Retail units generally operate from premises located and designed to attract a high volume of walk-in customers, have an extensive display of goods, and/or use mass media advertising designed to attract customers. The display and advertising of goods may be physical or electronic.

Physical display and advertising includes shops, printed catalogues, billboards and print advertisements. Electronic display and advertising includes catalogues, internet websites, television and radio advertisements and infomercials. While non-store retailers, by definition, do not posses the physical characteristics of traditional retail units with a physical shop-front location, these units share the requisite function of the purchasing and onselling of goods to the general public, and are therefore included in this division.

A unit which sells to both businesses and the general public will be classified to the Retail Trade Division if it operates from shop-front premises, arranges and displays stock to attract a high proportion of walk-in customers and utilises mass media advertising to attract customers.

The Accommodation and Food Services Division includes units mainly engaged in providing short-term accommodation for visitors. Also included are units mainly engaged in providing food and beverage services, such as the preparation and serving of meals and the serving of alcoholic beverages for consumption by customers, both on and off-site.

The Transport, Postal and Warehousing Division includes units mainly engaged in providing transportation of passengers and freight by road, rail, water or air. Other transportation activities such as postal services, pipeline transport and scenic and sightseeing transport are included in this division.

Units mainly engaged in providing goods warehousing and storage activities are also included.

The division also includes units mainly engaged in providing support services for the transportation of passengers and freight. These activities include stevedoring services, harbour services, navigation services, airport operations and customs agency services.

The Information Media and Telecommunications Division includes units mainly engaged in:

• creating, enhancing and storing information products in media that allows for their dissemination;
• transmitting information products using analogue and digital signals (via electronic, wireless, optical and other means); and
• providing transmission services and/or operating the infrastructure to enable the transmission and storage of information and information products.

Information products are defined as those which are not necessarily tangible, and, unlike traditional goods, are not associated with a particular form. The value of the information products is embedded in their content rather than in the format in which they are distributed. For example, a movie can be screened at a cinema, telecast on television or copied to video for sale or rental. The division includes some activities that primarily create, enhance and disseminate information products, subject to copyright.

It is the intangible nature of the information products which determines their unique dissemination process, which may include via a broadcast, electronic means, or physical form. They do not usually require direct contact between the supplier/producer and the consumer, which distinguishes them from distribution activities included in the Wholesale Trade and Retail Trade Divisions.

Excluded from the division are units mainly engaged in:

• the mass storage or duplication of information products such as printing newspapers, CDs, DVDs, etc. (Manufacturing Division);
• purchasing and on-selling information products in their tangible form (Wholesale Trade and Retail Trade Divisions);
• providing specialised computer services such as programming and systems design services, graphic design services and advertising services, as well as gathering, tabulating and presenting marketing and opinion data (Professional, Scientific and Technical Services Division);
• providing a range of creative artistic activities such as the creation of an artistic original (e.g. a painting), or the provision of a live musical performance by a group or artist (Arts and Recreation Services Division); and
• units undertaking a range of activities such as directing, acting, writing and performing (Arts and Recreation Services Division).

The Financial and Insurance Services Division includes units mainly engaged in financial transactions involving the creation, liquidation, or change in ownership of financial assets, and/or in facilitating financial transactions.

The range of activities include raising funds by taking deposits and/or issuing securities and, in the process, incurring liabilities; units investing their own funds in a range of financial assets; pooling risk by underwriting insurance and annuities; separately constituted funds engaged in the provision of retirement incomes; and specialised services facilitating or supporting financial intermediation, insurance and employee benefit programs.

Also included in this division are central banking, monetary control and the regulation of financial activities.

The Rental, Hiring and Real Estate Services Division includes units mainly engaged in renting, hiring, or otherwise allowing the use of tangible or intangible assets (except copyrights), and units providing related services.

The assets may be tangible, as in the case of real estate and equipment, or intangible, as in the case with patents and trademarks.

The division also includes units engaged in providing real estate services such as selling, renting and/or buying real estate for others, managing real estate for others and appraising real estate.

The Professional, Scientific and Technical Services Division includes units mainly engaged in providing professional, scientific and technical services. Units engaged in providing these services apply common processes where labour inputs are integral to the production or service delivery. Units in this division specialise and sell their expertise. In most cases, equipment and materials are not major inputs. The activities undertaken generally require a high level of expertise and training and formal (usually tertiary level) qualifications.

These services include scientific research, architecture, engineering, computer systems design, law, accountancy, advertising, market research, management and other consultancy, veterinary science and professional photography.

Excluded are units mainly engaged in providing health care and social assistance services, which are included in Division Q Health Care and Social Assistance.

The Administrative and Support Services Division includes units mainly engaged in performing routine support activities for the day-to-day operations of other businesses or organisations.

Units providing administrative support services are mainly engaged in activities such as office administration; hiring and placing personnel for others; preparing documents; taking orders for clients by telephone; providing credit reporting or collecting services; and arranging travel and travel tours.

Units providing other types of support services are mainly engaged in activities such as building and other cleaning services; pest control services; gardening services; and packaging products for others.

The activities undertaken by units in this division are often integral parts of the activities of units found in all sectors of the economy. Recent trends have moved more towards the outsourcing of such non-core activities. The units classified in this division specialise in one or more of these activities and can, therefore, provide services to a variety of clients.

The Public Administration and Safety Division includes units mainly engaged in Central, State or Local Government legislative, executive and judicial activities; in providing physical, social, economic and general public safety and security services; and in enforcing regulations. Also included are units of military defence, government representation and international government organisations.

Central, State or Local Government legislative, executive and judicial activities include the setting of policy; the oversight of government programs; collecting revenue to fund government programs; creating statute laws and by-laws; creating case law through the judicial processes of civil, criminal and other courts; and distributing public funds.

The provision of physical, social, economic and general public safety and security services, and enforcing regulations, includes units that provide police services; investigation and security services; fire protection and other emergency services; correctional and detention services; regulatory services; border control; and other public order and safety services.

Also included are units of military defence, government representation and international government organisations.

Government ownership is not a criterion for classification to this industry division. Government units producing 'private sector like' goods and services are classified to the same industry as private sector units engaged in similar activities. Private sector units engaged in public administration or military defence are classified to the Public Administration and Safety Division. Units that engage in a combination of public administration and service delivery activities are to be classified to this division.

The Education and Training Division includes units mainly engaged in the provision and support of education and training, except those engaged in the training of animals e.g. dog obedience training, horse training.

Education may be provided in a range of settings, such as educational institutions, the workplace, or the home. Generally, instruction is delivered through face-to-face interaction between teachers/instructors and students, although other means and mediums of delivery, such as by correspondence, radio, television or the internet, may be used.

Education and training is delivered by teachers or instructors who explain, tell or demonstrate a wide variety of subjects. The commonality of processes involved, such as the labour inputs of teachers and instructors, and their subject matter knowledge and teaching expertise, uniquely distinguishes this industry from other industries.

Education support services include a range of support services which assist in the provision of education, such as curriculum setting and examination marking.

The Health Care and Social Assistance Division includes units mainly engaged in providing human health care and social assistance. Units engaged in providing these services apply common processes, where the labour inputs of practitioners with the requisite expertise and qualifications are integral to production or service delivery.

The Arts and Recreation Services Division includes units mainly engaged in the preservation and exhibition of objects and sites of historical, cultural or educational interest; the production of original artistic works and/or participation in live performances, events, or exhibits intended for public viewing; and the operation of facilities or the provision of services that enable patrons to participate in sporting or recreational activities, or to pursue amusement interests.