1504.0 - Methodological News, Mar 2003  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 08/03/2004   
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The Business Provisions are the mechanism through which survey estimates are adjusted to allow for population changes (births, deaths and resurrections) that occur between when survey frames are taken (from the common frame) and the reference period to which the survey frame is applied. Frame changes associated with the implementation of Tax Reform Stream 2 have led to substantial changes to the Business Provisions methodology.
Prior to Stream 2 implementation, the Business Provisions consisted of three broad components:

  • the after frame extraction population (AFE) component;
  • the outstanding population component (businesses yet to be processed to the Business Frame); and
  • an adjustment for Tax Reform Stream 1.

The pre-Stream 2 Business Register was maintained by the ABS but with population changes processed by ABS staff. Inscope population changes processed after frame extraction and before the end of the reference period were included in the AFE component while those population changes still unprocessed at the end of the reference period were included in the outstanding population component. For the period spanning June 2001 - June 2002, further adjustments were included to mitigate the effect of the Tax Reform Stream 1 changes to the Business Frame.

The implementation of Stream 2 has greatly simplified the methodology for calculating Business Provisions counts. These counts represent changes since the survey frame was created to the end of the reference period. In preparing the Business Frame for Stream 2 migration, the entire outstanding population was loaded to the ABS Business Register. Coupled with a move to direct loading and more timely information from the Australian Taxation Office (ATO), this has led to the complete removal of the outstanding population. Consequently, there is no longer any need to include the outstanding population component in the Business Provisions. The implementation of Stream 2 also called for the complete removal of the Stream 1 adjustments.

Furthermore, the implementation of Tax Reform Stream 2 has simplified the calculation of the AFE component. With more timely information from the ATO, a deathing adjustment that was previously included, is no longer necessary and the Stream 2 modification to the proxy rule has led to a simplification of the birth-death pair adjustment.

In conjunction with the Common Frames Unit in the Integration Branch (Statistical Services Branch) has recently re-engineered the Business Provisions system to incorporate the simplified methodology, be more user-friendly and still produce the output required for the generalised estimation system. The new Business Provisions methodology and system is now in production and has been used to produce the September quarter Business Provisions estimates for subannual surveys and the 2001-2002 estimates for annual surveys.

Response to the new methodology and programs has been positive with the July 2002 Business Provisions contribution to the Australia level Retail Turnover Estimate being 1.02%, a drop from 2.21% in June 2002. A similar drop in the contribution by to estimates has also been seen in the Average Weekly Earnings and Job Vacancies Surveys.

In response to the Business Survey Innovation Program, future support for Business Provisions will be provided by the Victorian Methodology Unit.

For further information, please contact Dale Wallace on (02) 6252 7313.

E-mail: d.wallace@abs.gov.au