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This document was added 21/12/2010.
The scope of Counts of Australian Businesses, including Entries and Exits, June 2007 to June 2009 (cat. no. 8165.0) is significantly different to previously released (and discontinued) ABS business counts publications. In particular, this publication only includes businesses which actively traded in goods or services during the reference period in question, whereas the scope of previous releases focused on different populations. Please refer to section entitled "Scope" and Appendix 1 for further information.
The results of these studies are based, in part, on tax data supplied by the Australian Taxation Office (ATO) to the ABS under provisions in various Taxation Acts which require that such data are only used for statistical purposes. No individual information collected under the Census and Statistics Act 1905 is provided back to the ATO for administrative or regulatory purposes. Any discussion of data limitations or weaknesses are in the context of using the data for statistical purposes, and are not related to the ability of the data to support the ATO’s core operational requirements.
Legislative requirements to ensure privacy and secrecy of these data have been followed. Only people authorised under the Australian Bureau of Statistics Act 1975 have been allowed to view data about any particular organisation and/or person in conducting these analyses. No information about individual taxpayers (persons) has been released to the ABS. Aggregated personal income tax data are confidentialised by the ATO before release to the ABS. In accordance with the Census and Statistics Act 1905, results have been confidentialised to ensure that they are not likely to enable identification of a particular person or organisation.
The Explanatory Notes which follow contain further information about the collection methods used in compiling Counts of Australian Businesses, including Entries and Exits. This includes information about the data source used and processes or transformations which have been applied to the data.
The vast majority of businesses included on the ABS Business Register are in the non profiled population. Most of these businesses are understood to have simple structures and the unit registered for an ABN satisfies ABS statistical requirements (after some system processes are applied). For these businesses, the ABS statistical units structure directly aligns with the ABN unit: one ABN equates to one business.
For a relatively small number of businesses, the ABN unit is not suitable for ABS economic statistics purposes and the ABS maintains its own units structure through direct contact with businesses. These businesses constitute the profiled population. This population consists typically of large, complex and diverse groups of businesses. In the profiled population, a type of activity unit (TAU) equates to one business.
The TAU is comprised of one or more business entities, sub-entities or branches of a business entity within an enterprise group that can report production and employment data for similar economic activities. When a minimum set of data items are available, a TAU is created which covers all the operations within an industry subdivision. Where a business cannot supply adequate information for each industry, a TAU is formed which contains activity in more than one industry subdivision. These TAUs are classified according to the industry subdivision of the main activity. TAUs may have operations in one or more states/territories.
The statistical unit referred to as a "business" thus consists of ABNs from the non profiled population and TAUs from the profiled population.
Limiting the scope to only businesses with a GST role means that only entities which are actively trading in goods or services are included. Businesses which have not submitted a Business Activity Statement (BAS) and/or have reported zero dollar amounts over five consecutive quarters are treated as "long term non-remitters" (LTNRs). As they are not actively remitting GST, they are considered not to be actively trading and are therefore excluded from counts.
In addition, entities which are not considered to be actively trading in the market sector are not considered to be businesses and, as such, are excluded from the business counts. This includes entities classified to the following categories:
It should be noted that the scope of the business counts has been redefined in this release using the updated 2006 versions of SISCA and ANZSIC.
In relation to SISCA, the scoping changes have been relatively minor. Specifically, the SISCA 1993 "Central Bank" category (which was out of scope in previous releases) has been split into two categories, "Reserve Bank of Australia" and "Other Central Bank Institutions". These SISCA 2006 categories are out of scope of this release and have had a negligible impact on the counts.
In relation to ANZSIC, business counts which were previously provided according to ANZSIC 1993 have been updated to ANZSIC 2006. For further information regarding the transition from using data on the ANZSIC 1993 basis to using data on the ANZSIC 2006 basis, please refer to the section below entitled "Industry".
In addition, the scope for business counts has been expanded in this release to include those businesses that are yet to be coded by the ATO to an industry, sector and/or main State of operation through the Australian Business Register (ABR) new business registration process. Historically, due to the statistically insignificant size of the population, such businesses were excluded from the scope of Counts of Australian Businesses, including Entries and Exits.
Analysis conducted on these businesses indicates that, despite not having a complete set of characteristics data, these businesses were actively trading and also met the other scoping criteria of the collection (please refer to the diagram on page 3 for further details). It was therefore considered appropriate that they be included within scope of Counts of Australian Businesses, including Entries and Exits.
These actively trading businesses have been grouped together into "currently unknown" codes in the publication tables and the forthcoming data cubes. The inclusion of these businesses in Counts of Australian Businesses, including Entries and Exits will provide a more accurate annual snapshot of businesses that were actively trading in the Australian economy.
However, users should exercise caution when making data comparisons between this publication and either of the two previous publications. Specifically, any publication tables, data cubes or customised data containing ANZSIC 1993 industry detail and annual turnover size ranges from previous releases will not be directly comparable with the data included in this publication.
With the change in the GST threshold from 1 July 2007, and the transition to counts based on ANZSIC 2006, it has been necessary to rebase the time series to June 2007. This is to ensure a consistent GST threshold is in place for the entire reference period.
ANZSIC 2006 information is not available for businesses which were active after June 2003 but exited prior to July 2006. Further, industry coding of new businesses using ANZSIC 1993 ceased in April 2006. Therefore, businesses passing through the ATO business registration processes after April 2006 are no longer being allocated ANZSIC 1993 industry codes. This rules out the possibility of developing an accurate and ongoing time-series based on ANZSIC 1993 in Counts of Australian Businesses, including Entries and Exits. This publication therefore establishes a new industry-based time-series, based on the same version of ANZSIC currently used by the ATO during the business registration process. This will also allow for a more relevant range of industry-based time-series data to be developed in future.
Business entry and exit counts are restricted to new or ceasing businesses. In particular, entries do not include the establishment of new locations associated with an existing business.
This also includes businesses which had:
Thus, a business entry is defined as a business which is actively trading on the business register at 1 June in the reference year but was not actively trading at 1 June the previous year.
Thus, a business exit is defined as a business which was actively trading on the business register at 1 June in the previous year but was not actively trading at 1 June in the reference year.
It is important to note that a business exit event does not necessarily equate to a business "failure". There may be a number of other reasons why a business exit event has occurred, including events relating to selling a business (e.g. due to an owner/operator retiring), and events relating to changes in a business's structure (e.g. due to merger or takeover activities), etc. Such events may result in one or more business exit events occurring, and in some cases, no net loss of businesses.
One of the enhancements to the business counts data in this publication involves the provision of data which indicates the growth and movement of business survivals between employment and annual turnover classifications over time. For further information, please refer to the publication's Technical Note.
During the transition from ANZSIC 1993 to ANZSIC 2006, it was necessary to review the ANZSIC 2006 classification structure to determine which ANZSIC 2006 classes should be in-scope and which should be out-of-scope of the counts.
For comparative purposes, the scoping changes resulting from the transition from ANZSIC 1993 to ANZSIC 2006 are summarised in the following table:
In comparison, the ANZSIC 2006 out-of-scope classes are considered to contain a significant concentration of entities that do not satisfy the definition of an "actively trading business". A number of these entities are operated by State and local governments, not-for-profit organisations, peak bodies and various associations and interest groups. Such entities are not considered to be actively trading in the market sector and, as such, continue to be excluded from the scope of Counts of Australian Businesses, including Entries and Exits.
For further information on the transition from ANZSIC 1993 to ANZSIC 2006, users may wish to consult the Australian and New Zealand Standard Industrial Classification 2006 (cat. no. 1292.0) on the ABS website <www.abs.gov.au>. The ANZSIC 2006 classification contains a range of correspondence tables which illustrate how the previously excluded ANZSIC 1993 categories have been treated in ANZSIC 2006.
The Australian taxation system provides flexibility during the new business registration process as it allows businesses operating in single or multiple States or Territories to register on the ABR and report taxation obligations in a variety of ways. For instance, it is possible for a business entity to register for a single ABN regardless of the number of commercial activities it undertakes (sometimes visible in the number of physical "shopfronts" it may operate from). Alternatively, multiple commercial activities of a single business enterprise may be registered for separate ABNs, depending on the legal structure adopted by the enterprise. Hence where commercial activities are carried out by a number of different, but related entities, each entity may register for a separate ABN. As this publication defines a business on the basis of an ABN (or TAU in the profiled population), the counts may be regarded as providing partial coverage of businesses in a given State. For further information, please refer to the data quality declaration associated with Counts of Australian Businesses, including Entries and Exits (cat. no. 8165.0)
SLAs are based on the boundaries of incorporated bodies of local government where these exist. These bodies are the Local Government Councils and the geographical areas which they administer are known as Local Government Areas (LGAs). An LGA is an SLA if it fits entirely within an Statistical Subdivision (SSD) and is broadly similar in size, economic significance and user needs for statistics to other LGAs in Australia.
The issues of multi-location businesses are more pronounced for count data at the SLA level, as multi-location businesses (i.e. in respect of businesses registered under a single ABN/TAU) will only be attributed to a single SLA. As such, care should be taken not to assume that business counts at the SLA level reflect all business operations within that SLA. For further information, please refer to the data quality declaration associated with Counts of Australian Businesses, including Entries and Exits (cat. no. 8165.0).
Sub-State level data cubes will again be released using SLA. The SLA data cubes replace the postcode-based data made available in February 2007. One of the main advantages of the SLA data over the previously published postcode data is that the SLA categories used in the aforementioned data cubes can be easily used to aggregate data to larger geographical areas, including Statistical Subdivisions, Statistical Divisions, and States/Territories, as part of the ASGC. For more information, users should refer to the Australian Standard Geographical Classification (ASGC) (cat. no. 1216.0).
Users should note that from July 2011, the ABS will progressively replace the current Australian Standard Geographical Classification (ASGC) with the new Australian Statistical Geography Standard (ASGS) as its geographical framework. As such, the next release of Counts of Australian Businesses, including Entries and Exits is expected to be based on the new ASGS.
In addition, previous publications involved employment and turnover classifications being held constant for each business at their latest available value. This release differs in that it classifies in-scope businesses according to their employment and turnover at particular points in time. For further information, please refer to the publication's Technical Note.
The methods used to quantify employment in this release are based on "headcounts" of employees. However, different methodologies are applied depending on where (i.e. in which population) businesses reside in the ABS Business Register.
In the non profiled population, ABS indirectly collects employment data through Payment Summary information, supplied by the ATO. This data provides an initial indication of employment for statistical purposes (i.e. a headcount of employees). Businesses report "number of payees", which is defined as the estimated number of individuals to whom payments are made. This will reflect the total number of persons employed by the business "throughout the year" rather than an estimate of current employees at a point in time. Payments to people under a voluntary agreement or labour hire arrangement are excluded.
In the profiled population, businesses report "employment" as defined by the number of persons who are employed by a public or private employer and receive remuneration in wages or salaries (including working proprietors and working partners), or are paid a retainer fee by their employer. Employment excludes non-salaried directors; volunteers; persons paid by commission only; and self employed persons such as consultants and contractors. These data are collected through direct contact with businesses in the profiled population and reflect a "point in time" headcount of current employees.
The employment data extracted from the ABSBR are generally suitable for the purposes of attributing an employment size classification to each in-scope business. However, during processing, a subset of problem units were identified and a more robust methodology was developed to ensure all businesses were classified to an employment size range which reflected real world activity.
This involved examining the reported employment values of business which were known to be affected by recent changes to the ABSBR and imputing values as appropriate based on auxiliary data. Specifically, historical employment data and BAS annual turnover data were used to develop a better quality impute. This methodology is considered suitable for the purposes of classifying businesses into relatively broad employment size ranges.
Where businesses report zero values on their BAS or have failed to report at all, these data are compared with auxiliary BAS data, which are then used for the purposes of assigning annual turnover values for each in-scope business. In cases where auxiliary BAS data are not available, an impute based on auxiliary ABSBR data (including wages and salaries and employment data) is used.
The imputation technique described therefore classifies all in-scope businesses to a single annual turnover size range in Counts of Australian Businesses, including Entries and Exits.
The confidentiality process to be used is the same as that applied in the previous release. This process involves the random rounding of data at the most detailed levels of the various classifications used.
The confidentiality process will round data in such a way that the data presented at these detailed levels will not always be additive. That is, opening stock from the beginning of the financial year, plus entries, minus exits, may not be equal the closing stock for the end of the financial year. This is due to the fact that each of those components is individually rounded.
The definition of employing/non-employing in the ABS can also vary according to collection methodology, data sources, and user requirements.
Users comparing data from this publication with other ABS data should do so with care, as some other ABS publications may exclude non-employing businesses or particular industries or sectors.
For further details see the Explanatory Notes section of the relevant publications.
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