APPENDIX



1 This appendix outlines the changes that have been made to the data included in the Estimates of Personal Income for Small Areas series from the release of 2006-07 data. It provides a comparison between the current data and previously released data for this series to examine the impact of these changes. The changes that have been made to the current data are to the definition of Wage and salary income and to the counts of individuals.

2 While these changes have not had a significant impact on Wage and salary income at the Australia level, there are significant differences in the counts of individuals receiving income from Own unincorporated business and Investment.


Wages and salaries

3 There have been several changes to the items included in Wages and salaries since this series was first released. In this release, Lump sums and Eligible termination payments have been included in Wage and salary income for the first time. This has been updated to align with the changed definition of Wage and salary income in the ABS income standards. For more information on income standards, refer to the Explanatory Notes of Household Income and Income Distribution, Australia, 2007-08 (cat. no. 6523.0). Users should exercise caution in comparing Wage and salary data for 2003-04 to 2005-06 that is contained in previous issues of this release. Table 1 outlines the changes that have been made to Wage and salary income:

Table 1. Changes to the definition of Wage and salary income
Release	Reference periods	Wages and salaries inclusions
6524.0 and 6524.0.55.001	1995-96 to 2000-01	Gross wage and salary income
		Allowances, commissions, tips etc.
6524.0.55.002	2001-02 to 2005-06	Gross wage and salary income
		Allowances, commissions, tips etc.
		Attributed personal services income
6524.0.55.002	2003-04 to 2006-07	Gross wage and salary income
		Allowances, commissions, tips etc.
		Attributed personal services income
		Lump sums
		Eligible termination payments

4 Table 2 compares previously published Wage and salary earners data to the current data for the years 2003-04 to 2005-06. At the Australia level, the inclusion of Lump sums and Eligible termination payments has resulted in an increase in the number of Wage and salary earners, total Wage and salary income and average Wage and salary income by one to two per cent in each reference year.

Table 2. Comparison of Wage and salary data, new and former bases
	number of persons				wage and salary income ($m)				average wage and salary income ($)
	new basis	former basis	difference	%	new basis	former basis	difference	%	new basis	former basis	difference	%
2003-04	8,591,299	8,509,178	82,121	0.97	316,924.6	310,248.8	6,675.8	2.15	36,889	36,460	429	1.18
2004-05	8,821,514	8,736,412	85,102	0.97	340,571.0	333,399.4	7,171.6	2.15	38,607	38,162	445	1.17
2005-06	9,050,233	8,939,749	110,484	1.24	364,504.9	355,868.0	8,636.9	2.43	40,276	39,807	469	1.18

5 While these differences are not large at the Australia level, users should not assume that all differences between the two series are similarly small at the regional level. For example, it is possible that business closures may impact to a greater or lesser extent on specific regions (for example, where businesses provide significant employment in regional communities).


Counts of individuals

6 It is possible for an individual to receive income from several sources and for one or more of these to be negative net income. For example, an individual may have Wage and salary income and negative net income from Investment. In this release, the number of individuals shown for each income category includes individuals who had a net negative income, whereas in previous releases only those with a net positive income were counted. This change in the way individuals are counted allows the calculation of average incomes for each source of income. These data show that for the period 2003-04 to 2006-07, Own unincorporated business and Investment income were the only sources of income to record a negative income for the financial year in some regions. Users should exercise caution in comparing data for the number of individuals that is contained in previous issues of this release since the counting rules differed.

7 Table 3 compares previously published data for the number of persons earning income from Own unincorporated business, where only persons with positive income were included, to the current data, which includes individuals who had a net negative income. At the Australia level, this change has resulted in a significant increase in the number of persons in the Own unincorporated business income category for each reference year, ranging from 28.8% in 2003-04 to 32.3% in 2005-06.

Table 3. Comparison of Own unincorporated business earners, new and former bases
	number of persons
	new basis	former basis	difference	%
2003-04	1,799,888	1,397,314	402,574	28.81
2004-05	1,807,275	1,387,125	420,150	30.29
2005-06	1,825,543	1,379,661	445,882	32.32

8 Table 4 compares the number of persons earning Investment income in previously published data to the current data. As seen with Own unincorporated business, the number of individuals included in this income category has increased significantly as a result of including persons earning net negative income from this source. Person counts in the current data are between fifteen and sixteen per cent higher than previously released data for each reference year.

Table 4. Comparison of Investment earners, new and former bases
	number of persons
	new basis	former basis	difference	%
2003-04	5,945,933	5,154,972	790,961	15.34
2004-05	6,240,460	5,406,656	833,804	15.42
2005-06	6,262,537	5,377,511	885,026	16.46