8167.0 - Selected Characteristics of Australian Business, 2006-07 Quality Declaration 
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 19/09/2008   
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1 This release presents summary data for a selection of topics as collected by the 2006-07 Business Characteristics Survey (BCS). Data included are additional to those outputs from the BCS released previously in Summary of IT Use and Innovation in Australian Business, 2006-07 (cat. no.8166.0) and Innovation in Australian Business, 2006-07 (cat. no. 8158.0).

2 The BCS is an annual survey and it is the survey vehicle for the ABS' Integrated Business Characteristics Strategy (IBCS). The strategy integrates the collection and quality assurance of data required for input into both the ABS' Business Longitudinal Database (BLD) and the production of point in time estimates for: Business Use of Information Technology (BUIT); Innovation in Australian Business; a broad range of other non-financial business characteristics; and other data from administrative sources.

3 A key part of the IBCS is the production of annual BUIT and business innovation indicators, with a more detailed set of items for each of these topics collected every second year (i.e. in alternating years). Previously, these IT and innovation indicators were produced from the separate annual Business Use of IT and biennial Innovation surveys, respectively. The 2006-07 BCS was the second iteration of the fully integrated collection and had a focus on Innovation. The 2007-08 BCS will collect detailed IT use information.


4 Statistical units are those entities from which statistics are collected, or about which statistics are compiled. In ABS economic statistics, the statistical unit is generally the business. The ABS Business Register (ABSBR) is used to record information about statistical units and is used to create the frames for most ABS economic collections.

5 The ABS uses an economic statistics units model on the ABSBR to describe the characteristics of businesses, and the structural relationships between related businesses. Within large, complex and diverse business groups, the units model is also used to define reporting units that can provide data to the ABS at suitable levels of detail.

6 This units model allocates businesses to one of two sub-populations:

  • Businesses with a simple structure - Most businesses and organisations in Australia need to obtain an Australian Business Number (ABN). They are then included on the whole-of-government register of businesses, the Australian Business Register (ABR), which is maintained by the Australian Taxation Office (ATO). Most of these businesses have simple structures; therefore, the unit registered for an ABN will satisfy ABS statistical requirements. For these businesses, the ABS has aligned its statistical units structure with the ABN unit. The businesses with simple structures constitute the ATO maintained population (ATOMP), and the ABN unit is used as the statistical unit for all ABS economic collections.
  • Businesses with a complex structure - For the population of businesses where the ABN unit is not suitable for ABS statistical requirements, the ABS maintains its own units structure through direct contact with the business. These businesses constitute the ABS maintained population (ABSMP). This population consists typically of large, complex and diverse businesses. For businesses in the ABSMP, statistical units comprise the Enterprise Group, the Enterprise and the Type of Activity Unit (TAU). The range of activities across the Enterprise Group can be very diverse. The TAU represents a grouping of one or more business entities within the Enterprise that cover all of the operations within an industry subdivision and for which a basic set of financial production and employment data can be reported.

7 Together these two sub-populations (of ABN units and TAUs) make up the ABSBR population, from which the BCS sample is taken.

8 The current economic statistics units model was introduced into the ABS in mid 2002, to better use the information available as a result of The New Tax System (TNTS). For more information please refer to Information Paper: Improvements in ABS Economic Statistics - Arising from the New Tax System], (cat. no. 1372.0).


9 The businesses that contribute to the statistics in this publication are classified by:
10 The scope of the estimates in this publication consists of all employing business entities in the Australian economy, except for:
      SISCA 3000 General government
      SISCA 6000 Rest of the world
      ANZSIC06 Division A Agriculture, forestry and fishing
      ANZSIC06 Division O Public administration and safety
      ANZSIC06 Division P Education and training
      ANZSIC06 Groups 624 (Financial asset investing) and 633 (Superannuation funds)
      ANZSIC06 Groups 854 (Religious services) and 955 (Civic, professional and other interest group services)
      ANZSIC06 Subdivision 96 Private households employing staff

11 The 2006-07 BCS used the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 edition to define scope. This differs from the previous survey which used the 1993 edition of this classification. More information about the impact of this change is provided in the Appendix 2: Changes to Industry Classification.

12 The frame for the Business Characteristics Survey is a subset of the ABS Business Register and includes employing businesses only. These are defined as those businesses which register for the ATO's Pay As You Go Withholding (PAYGW) scheme. It is not unusual for some of these 'employing businesses' to have zero employment at various times during the reporting period. The frame is updated quarterly to take account of new businesses, businesses which have ceased employing, changes in employment levels, changes in industry and other general business changes. Businesses which have ceased employing are identified when the ATO cancels their Australian Business Number (ABN) and/or PAYGW registration. In addition, businesses with less than 50 employees, which did not remit under the PAYGW scheme in each of the previous five quarters, are removed from the frame. The estimates in this publication include an allowance for the time it takes a newly registered business to be included in the survey frame.


13 The sample design for this survey is complex due to serving dual purposes: collection of characteristics data for the ABS Business Longitudinal Database (BLD); and production of point in time estimates for a range of non-financial business characteristics. While there are scope differences between the BLD and point in time estimates, the intention is to maximise the number of businesses selected for which data collected can contribute to both purposes. More information about releases for the BLD is provided in Explanatory Note 33. For more information about the survey design or methodology for the BCS, please email your query to innovation.technology@abs.gov.au.

14 Collection of data included in this release was undertaken based on a random sample of approximately 9,700 businesses using a mail out questionnaire. The sample was stratified by industry and an employment based size indicator. All businesses on the ABS Business Register identified as having 200 or more employees were included in the sample. The 2006-07 BCS was dispatched in November 2007.

15 One of the changes to the design of the 2006-07 BCS sample compared to the last stand-alone BUIT and Innovation surveys is the removal of state or territory as a stratification variable. The loss of state or territory stratification has had an impact on the quality and breadth of state or territory estimates that are able to be released from the BCS.


16 The reference period for most of the business characteristics items included in the 2006-07 BCS is the year ended 30 June 2007. Financial data relates to the most recent financial year ended on or before 30 September 2007.


17 The approach to quality assurance for the BCS aims to make the best use of ABS resources to meet user prioritised requirements - both in terms of data quality and timing of release. The approach specifies the level and degree to which each data item is quality assured, noting that only some of the total output from the BCS is able to be quality assured to the highest standards. Different priorities are assigned to groups of data items, with highest priority being assigned to key point in time data on business use of IT and innovation.

18 In general, the data items contained in this release have a lower user priority and, therefore, have been given relatively less attention during the quality assurance phase of processing. Most of the data contained in this release are 'as reported' by businesses with limited editing and cross-validation being applied. One of the most visible impacts of the current approach to quality assurance can be seen in tables where, in theory, the components should add to 100%. For example, items where businesses have been asked to 'tick one box only' and multiple responses may have been provided. In these cases, contact would need to be made with the respondent to ascertain the correct response, however, resources do not permit contact with all businesses that may have reported in this way.

19 References to any relevant quality issues that the reader should take into consideration are made within the commentary associated with the respective data item. More information is available from the contact person for this release.


20 The 2006-07 BCS draws on the conceptual definitions and guidelines included in the Oslo Manual, Guidelines for Collecting and Interpreting Innovation Data (Third Edition, 2005). This manual provides a framework for the collection of innovation statistics and specifies the definitions of innovating businesses and innovation-active businesses that are used by the ABS. The 2006-07 BCS draws on this manual for the questions used in the BCS and in presentation of outputs from the survey. The Glossary provides definitions for the measures of innovation that are included.

21 For more information about ABS Innovation statistics, please refer to Appendix 1: Overview of ABS Innovation Statistics included in the recent release Innovation in Australian Business, 2006-07 (cat. no. 8158.0).


22 In the BCS (and previous BUIT surveys), the ABS has used the Organisation for Economic Co-operation and Development (OECD) narrow definition of e-commerce transactions when collecting data on Internet orders and Internet income. The narrow definition is "an Internet transaction is the sale or purchase of goods or services, whether between businesses, households, individuals, governments, and other public or private organisations, conducted over the Internet. The goods and services are ordered over the Internet, but the payment and the ultimate delivery of the good or service may be conducted on or off-line" (i.e., the commitment to purchase is made over the Internet). Internet income is, therefore, defined as income resulting from goods and services ordered over the Internet where the commitment to purchase is via the Internet or web. Excluded from these measures are orders, payments or transactions for which the commitment has been made using other arrangements.

23 ABS experience in collecting data for receipt of orders via the Internet and Internet income continuously highlights the difficulty of defining an Internet commerce transaction in a way which is understood by businesses and suits all forms of Internet commerce. For instance, for some businesses, the Internet transaction initiates and completes the purchase, while for others the Internet transaction finalises details of a purchase which was initiated by a non-Internet based agreement or contract. In order to apply consistent treatment in the collecting and quality assuring Internet orders and Internet income data, over several cycles of collecting these data, the ABS refined the definition of an "Internet order" to include only those transactions where the commitment to purchase occurs via the Internet or web. An important element of the definition remains that payment and the ultimate delivery of the good or service is not relevant, that is, either or both may be conducted off-line. This definition remains in place for the 2006-07 BCS.


24 Estimates of the number of businesses operating in Australia can be derived from a number of sources within the ABS. They may relate to a particular point in time or may be presented as an average annual figure. However, these estimates will not always show the same results. Variations will occur because of differing data sources, differing scope and coverage definitions between surveys, as well as variations due to sampling and non-sampling error. More information about business counts can be found in the information paper A Statistical View of Counts of Businesses in Australia (cat. no. 8162.0).

25 The Business Characteristics Survey is not designed to provide high quality estimates of numbers of businesses for any of the output classifications (for example, employment size or industry) and the number of businesses in this publication are only included to provide contextual information for the user. Users should also note that the estimates in this publication are only for the population of businesses in scope of the BCS. A more robust source of counts of Australian businesses is available from Counts of Australian Businesses, including Entries and Exits, Jun 2003 to Jun 2007 (cat. no. 8165.0).


26 For output purposes, businesses are classified to employment size ranges based on data reported for the last pay period in the reference year, i.e. the last pay period ended before 30 June 2007. It is possible for businesses classified on the ABS Business Register at the time of selection as employing, to report nil employees for the last pay period. For industry output, the classification is drawn from information held about the business on the ABS Business Register.


27 As indicated in paragraph 15 of these Explanatory Notes, the removal of state/territory as a stratification variable has had a major impact on the range and quality of data available at the state/territory level from the BCS. Therefore, no state/territory data are included in this release or associated data cubes.


28 The most recent issue of ABS releases related to demography of Australian business is listed below:
29 The second publication listed above is sourced from a supplementary topic collected as part of the ABS Monthly Labour Force Survey and not from the BCS.

30 The most recent issues of other ABS releases related to innovation in business in Australia are listed below:
31 The most recent issues of other ABS releases on the use and production of information and communication technologies (ICT) in Australia are listed below:
32 Recent ABS releases which provide additional information related to the Integrated Business Characteristics Strategy and the Business Longitudinal Database are listed below:


33 The primary outputs from the BLD will be a suite of Confidentialised Unit Record Files (CURF's). The BLD design is comprised of panels (or waves) with each panel representing the entire population of in-scope small and medium businesses at the time of initialisation. Each panel is surveyed for five years. The first wave of the BLD (Panel 1) was initiated via a stand-alone survey conducted in respect of the 2004-05 reference year. The first CURF for the BLD will include, for at least some businesses, 6-7 years of financial data (from administrative sources) and 3-4 years of characteristics data (directly collected via the BCS). The CURF is due for release in the first half of 2009.


34 Other information relating to IT, innovation and characteristics of business, particularly updates about additional analytical work, can be found on the ABS website <www.abs.gov.au>, Innovation, Science and Technology Home Page.


35 Estimates of proportions have been calculated using unrounded figures, but are shown in the tables rounded to one tenth of a percentage point. Where figures have been rounded, discrepancies may occur between the sum of the component items and the total. Figures presented in the commentary have been rounded to the percentage point.


36 The ABS welcomes comments and suggestions from users regarding business characteristics including IT and innovation statistics. These comments should be addressed to the Director, Innovation and Technology Business Statistics Centre, Australian Bureau of Statistics, GPO Box K881, Perth, WA, 6842, or email innovation.technology@abs.gov.au.