Latest release

Australian Industry methodology

Reference period
2019-20 financial year

Explanatory notes

Introduction

This publication presents estimates of the economic and financial performance of Australian industry in 2019-20. The estimates are produced annually using a combination of directly collected data from the annual Economic Activity Survey (EAS), conducted by the Australian Bureau of Statistics (ABS), and Business Activity Statement (BAS) data provided by businesses to the Australian Taxation Office (ATO).

Reference period

The period covered by the collection was, in general, the 12 months ended 30 June of the relevant year. Where businesses were unable to supply information on this basis, an accounting period for which data can be provided was used for data other than those relating to Employment. Such businesses have made a substantial contribution to some of the estimates presented in this publication. As a result, some estimates reflect trading conditions that prevailed in periods outside the twelve months ended June in the relevant year. For more information refer to the Estimation Methodology: Off-June adjusted estimates section.

Although financial estimates related to the full 12 months of the relevant financial year, Employment estimates related to the last pay period ending in June. As a result, estimates of Wages and salaries per employee may have been affected by fluctuations in Employment during the reference period.

Financial data incorporated all business units in scope of the EAS that were in operation at any time during the year. They also included any temporarily inactive units, i.e. those units which were in the development stage or were not in operation, but still existed and held or acquired assets and liabilities and/or incurred some non-operating expenses (e.g. depreciation, administration costs).

Classifications

The businesses that contributed to the statistics in this release were classified by:

Scope

The scope of the EAS consisted of all business entities operating in the Australian economy during 2019-20, except for:

  • In most industries, entities classified to SISCA Sector 3 General government. This exclusion particularly affected data presented for Public administration and safety, Education and training and Health care and social assistance (ANZSIC Divisions O, P and Q respectively), in that the estimates related only to private sector businesses. Note, however, that SISCA Sector 3 General government businesses classified to Water supply, sewerage and drainage services (ANZSIC Subdivision 28, within Division D) were included - that is, data for relevant local government organisations (for example) were included in the estimates.
  • Entities classified to ANZSIC Subdivisions 62 Finance and 63 Insurance and superannuation funds. Note that estimates included in this release for Total selected industries exclude ANZSIC Subdivision 64 Auxiliary finance and insurance services. Estimates for this subdivision are presented as a separate data cube in this issue.
  • Entities classified to ANZSIC Subdivisions 75 Public administration, 76 Defence and 96 Private households employing staff and undifferentiated goods- and service-producing activities of households for own use.

Government owned or controlled Public Non-Financial Corporations were included.

Coverage

This section discusses frame, statistical units, coverage issues and improvements to coverage.

Frame

Businesses contributing to the estimates in this release were sourced from the ABS Business Register (ABSBR), which has two components as described below.

Statistical units

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 and diverse business groups, the units model is used to define reporting units that can provide data to the ABS at suitable levels of detail.

In mid 2002, the ABS commenced sourcing its register information from the Australian Business Register (ABR) and at that time changed its business register to a two population model. The two populations comprise what is called the Profiled Population and the Non-Profiled Population. The main distinction between businesses in the two populations relates to the complexity of the business structure and the degree of intervention required to reflect the business structure for statistical purposes.

Non-profiled population

The majority of businesses included on the ABSBR are in the Non-Profiled Population. Most of these businesses are understood to have simple structures. For these businesses, the ABS is able to use the Australian Business Number (ABN) as the basis for a statistical unit. One ABN equates to one statistical unit.

Profiled population

For a 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 or complex groups of businesses. The statistical units model below caters for such businesses:

  • Enterprise group: This is a unit covering all the operations in Australia of one or more legal entities under common ownership and/or control. It covers all the operations in Australia of legal entities which are related in terms of the current Corporations Law (as amended by the Corporations Legislation Amendment Act 1991), including legal entities such as companies, trusts and partnerships. Majority ownership is not required for control to be exercised.
  • Enterprise: The enterprise is an institutional unit comprising (a) a single legal entity or business entity, or (b) more than one legal entity or business entity within the same enterprise group and in the same institutional sub-sector (i.e. they are all classified to a single SISCA sub-sector).
  • Type of activity unit (TAU): 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 is available, a TAU is created which covers all the operations within an industry subdivision (and the TAU is classified to the relevant subdivision of the ANZSIC). Where a business cannot supply adequate data for each industry, a TAU is formed which contains activity in more than one industry subdivision.

Coverage issues

The ANZSIC based industry statistics presented in this publication were compiled differently from activity statistics. Each ABN unit or TAU on the ABSBR has been classified (by the ATO and the ABS respectively) to its single predominant industry class, irrespective of any diversity of activities undertaken.

Some businesses engage, to a significant extent, in activities which are normally carried out by different industries. For example, a predominantly mining business may also undertake significant amounts of manufacturing. Similarly, a mining business may produce significant volumes of goods which are normally produced in different mining industries. Where a business makes a significant economic contribution to industries classified to different ANZSIC subdivisions, the ABS includes the business in the Profiled Population, and 'splits' the TAU's reported data between the industries involved. Significance is determined using total income.

A TAU's reported data are split if the inclusion of data relating to the secondary activity, in the statistics of the industry of the primary activity, distorts (by overstating or understating) either the primary or secondary industry statistics at the ANZSIC subdivision level by:

  • 3% or more, where the industries of the primary and secondary activities are in the same ANZSIC Division
  • 2% or more, where the industries of the primary and secondary activities are in different ANZSIC Divisions.

The ABS attempts to maintain a current understanding of the structure of the large, complex and diverse business groups that form the Profiled Population on the ABSBR, through direct contact with those businesses. Resultant changes in their structures on the ABSBR can affect:

  • the availability of such businesses (or units within them) for inclusion in the annual economic collections
  • the delineation of the units, within those groups, for which data are to be reported.

The ABS attempts to obtain data for those businesses selected for direct collection and which ceased operation during the year, but it is not possible to obtain data for all such businesses.

Improvements to coverage

Data in this release were adjusted to allow for lags in processing new businesses to the ABSBR, and the omission of some businesses from the register. The majority of businesses affected, and to which the adjustments applied, were small in size. As an example, the effect of these adjustments was generally 4% or less for most ANZSIC Divisions and for most states and territories.

Adjustments were made to include new businesses in the estimates for the period in which they commenced operation, rather than when they were processed to the ABSBR.

For more information on these adjustments, please refer to the ABS publication Information Paper: Improvements to ABS Economic Statistics, 1997 (cat. no. 1357.0).

Industry performance measures

This release presents a wide range of data that can be used to analyse business and industry performance.

Businesses report in the EAS according to Australian accounting standards applying at the time of reporting, leading to differences in reporting over time as standards are updated. In addition, differences in accounting policy and practices across businesses and industries can lead to some inconsistencies in the data input to the Australian Industry statistics. Although much of the accounting process is subject to standards, there is still a great deal of flexibility left to individual managers and accountants through the accounting policies and practices they adopt. For example, the way profit is measured is affected by management policy about such issues as depreciation rates, bad debt provisions and write off, and goodwill write off. The varying degree to which businesses consolidate their accounts may also affect any industry performance measures calculated.

A range of performance measures, usually referred to as ratios, can be produced from the data available from businesses' financial statements. The performance measures presented in this publication comprise:

  • profitability ratios, which measure rates of profit on sales
  • debt ratios, which indicate the ability of businesses to meet the cost of debt financing
  • investment ratios, which indicate the capacity of business to invest in capital assets
  • labour measures, which relate to output, labour costs and employment.

The above limitations are not meant to imply that analysis based on these data should be avoided, only that they should be borne in mind when interpreting the data presented in this publication.

Definitions for the data presented can also be found in the Glossary.

Survey design

In order to minimise the load placed on providers, the strategy for this survey was to use, as much as possible, information sourced from the ATO, thus reducing the size of the direct collect sample needed to maintain the range and quality of information available to users of statistical data. The frame (from which the direct collect sample was selected) was stratified using information held on the ABSBR. Businesses eligible for selection in the direct collect sample were then selected from the frame using stratified random sampling techniques.

Businesses were only eligible for selection in the survey (the direct collect sample) if their turnover exceeded a threshold level, or the business was identified as being an employing business (based on ATO information), as at the end of the reference period. Turnover thresholds were set for each ANZSIC class so that the contribution of surveyed businesses accounted for approximately 97.5% of total industry class turnover as determined by BAS data. A sample of 17,854 businesses was selected for the directly collected part of the 2019-20 EAS. Each business was asked to provide data sourced primarily from financial statements. Businesses were also asked to supply key details of their operations by state and territory, enabling production of the state/territory estimates. For the first time in 2012-13, the ABS introduced online questionnaires for business surveys.

Businesses which met neither of these criteria are referred to as 'micro non-employing businesses'. These businesses were not eligible for selection in the sample. For these units, BAS data were obtained and annualised, then used to model employment, income and expenses which were added to the directly collected estimates to produce the statistics in this release. For more information please refer to the Estimation Methodology section.

Effects of rounding

Where figures have been rounded, discrepancies may occur between totals and the sums of the component items. Proportions, ratios and other calculated figures shown in this publication have been calculated using un-rounded estimates and may be different from, but are more accurate than, calculations based on the rounded estimates.

Data comparability

Treatment of government COVID-19 support payments in 2019-20

The ABS has classified some COVID-19 government support payments, including JobKeeper and Boosting Cash Flow for Employers, as 'other subsidies on production', which according to the System of National Accounts, 2008 are excluded from Output and therefore, the calculation of Industry value added (IVA) and Gross value added.

As a result, within the Australian Industry publication, estimates:

  • continue to include the regular Funding from government for operational costs in the derivation of IVA in 2019-20 (and therefore also in 2020-21) as these are not considered subsidies on production
  • exclude JobKeeper, Boosting Cash Flow for Employers and other COVID-19 support payments and subsidies from the derivation of IVA
  • include JobKeeper, Boosting Cash Flow for Employers and other COVID-19 support payments and subsidies in the publication of the Funding from government for operational costs estimates, as well as in the derivation of Total income, Earnings before interest, tax, depreciation and amortisation (EBITDA) and Operating profit before tax (OPBT)

The impact of this change can be seen in the IVA and industry performance tables, which for time periods prior to 2019-20 contain the same data item for Funding from government for operational costs, but for 2019-20 each contain a different measure:

  • The IVA table (table 3) in the division, subdivision, Mining and Auxiliary finance and insurance services data cubes contains Funding from government for operational costs (excl. COVID-19 support payments)
  • The industry performance table (table 4) in the division, subdivision, Mining and Auxiliary finance and insurance services data cubes contains Funding from government for operational costs (incl. COVID-19 support payments)

Some stimulus packages would legitimately be reported under Service income rather than government funding for operational use, and therefore would be included in Sales and service income and IVA. Examples of packages that fall under this classification are various aged care support payments announced during COVID-19:

  • increase to benefits paid through the Aged Care Funding Instrument
  • increase to the residential and home care Viability Supplements and National Aboriginal and Torres Strait Islander Flexible Aged Care program
  • additional support to deliver Commonwealth Home Support Programme, and
  • aged care support payment to all Commonwealth funded residential aged care providers to help cover additional costs of caring during the COVID-19 pandemic.

Data comparability with other ABS statistics

In some cases estimates in this release may differ slightly from those from other sources. These differences may be the result of sampling or non-sampling error, or may result from differences in scope, coverage, definitions or methodology.

Revisions

Estimates for the 2017-18 and 2018-19 reference years have been revised since the previous issue of this publication. The revisions result from the review of new information received from the businesses in the direct collect sample. The revisions are incorporated in this release and in associated data cubes available free online. Note that the extent of revisions may differ for individual industries and/or between data items.

For more information on improvements of the methodology used for producing the estimates for micro non-employing businesses, please refer to the Estimation Methodology section.

Further information

A range of further information is available, as described below.

Related releases

The following ABS releases present economy-wide and industry specific data:

Australian System of National Accounts (cat. no. 5204.0) - Annual publication

Business Indicators, Australia (cat. no. 5676.0) - Quarterly publication

Private New Capital Expenditure and Expected Expenditure, Australia (cat. no. 5625.0) - Quarterly publication

Engineering Construction Activity, Australia (cat. no. 8762.0) - Quarterly publication

Building Activity, Australia (cat. no. 8752.0) - Quarterly publication

Film, Television and Digital Games, Australia, 2015-16 (cat. no. 8679.0) - Irregular publication

Information Media and Telecommunications Services, Australia, 2013-14 (cat. no. 8681.0) - Irregular publication

The national accounts estimates in Australian System of National Accounts (cat. no. 5204.0) include businesses classified to industries not in scope of the EAS. This includes current price estimates on Division K Financial and insurance services, as well as Ownership of dwellings and the General government sector. For more information on the scope of the collection for Australian Industry please refer to the Scope section above.

Other information available

Most years the ABS conducts detailed industry surveys targeting specific industries of interest. See previous releases of Australian Industry for feature articles and data downloads relating to these survey results.

The ABS provides a Release Calendar which details latest releases and products to be released in the next six months.

Inquiries about this or other ABS releases should be made via the ABS contact page.

Acknowledgement

ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated; without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.

Use of Australian Taxation Office (ATO) data in this publication

The results of these statistics are based, in part, on tax data supplied by the ATO to the ABS under the Income Tax Assessment Act 1936 which requires 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 is in the context of using the data for statistical purposes, and is 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 permitted to view data about any particular business 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.

Estimation methodology

The availability of BAS data collected by the ATO has provided the ABS with opportunities to improve the efficiency of collection designs and estimation for its business surveys, while at the same time reducing the reporting burden placed on businesses.

Under taxation law, data may be passed by the Commissioner for Taxation to the ABS for specified statistical purposes. Accordingly, turnover and wages information sourced from ATO BAS data were used to improve the accuracy of the 2019-20 industry estimates which were produced using data items collected directly by the ABS from businesses.

Generalised regression methodology

The 2019-20 EAS continued to use generalised regression estimation, first introduced in the 2006-07 survey. This estimation method enabled maximum use of observed linear relationships between data directly collected from businesses in the survey and auxiliary information.

When the auxiliary information is strongly correlated with data items collected in a survey, the generalised regression estimation methodology will improve the accuracy of the estimates. The auxiliary variables used in this survey were turnover and wages sourced from the BAS data of 2,185,042 businesses (including the direct collect sample).

Producing estimates

For the purpose of compiling the estimates in this publication, data for businesses as recorded on the ABSBR contributed via one of three categories (or 'streams') in accordance with significance and collection-related characteristics.

The following table illustrates the ways in which Australian businesses contributed to the estimates in this release.

Download
Summary of data sources, total selected industries 2019-20
Type of businessCompletely Enumerated (CE) StreamGeneralised Regression Estimation StreamBusiness Activity Statement (BAS) Stream
Sources of data*ABS surveyABS Survey and ATO Business Activity StatementsATO Business Activity Statements
The number of businesses4,9661,420,525759,551
The number of businesses that are selected to provide data4,96612,542759,551
Contribution to total income for Total selected industries51.70%46.90%1.50%

*ABS Business Register used to identify businesses of each type

Completely enumerated (CE) stream

The CE stream consisted of directly collected survey data for those units recorded on the ABSBR as being economically significant units and units significant to small state estimates.

Generalised regression estimation stream

The generalised regression estimation stream comprised directly collected data for those sampled units which were not in the CE stream and had turnover, in aggregate, above the bottom 2.5 percentile of BAS sales for that subdivision, or were identified as employing businesses (based on ATO information).

Business Activity Statement (BAS) stream

The BAS stream comprised data for those non-employing businesses whose turnover, in aggregate, was below the bottom 2.5 percentile of BAS sales for that ANZSIC subdivision.

Data for the BAS stream was produced using a technique that used BAS turnover to model income from sales of goods and services, BAS non-capitalised purchases to model purchases and BAS non-purchase related expenses to model other expenses. The modelling parameters were based on the relationship between BAS data and reported data for small businesses in the direct collect sample over 3 years and were defined at the industry level. Wages and salaries were modelled as 0 since these businesses were non-employers. Employment was based on the business type of (legal) structure.

Estimates for each of the selected industries were produced by aggregating the contributing data streams.

State and territory estimates

Introduction

The 'Australian industry by division' data cube contains annual state and territory estimates for Australian industry for the 2017-18 to 2019-20 reference periods. For earlier time periods see previous releases. The estimates use a combination of data directly collected in the EAS and BAS data sourced from the ATO.

Estimation methodology

EAS state and territory estimates are produced for Employment, Wages and salaries and Sales and service income. For the purpose of compiling the estimates in this publication, data for businesses as recorded on the ABSBR contribute via one of three categories (or 'streams') in accordance with significance and collection-related characteristics. The data are produced using a combination of estimation methods. The estimation method depends on the stream:

  • Stream 1: Completely enumerated and medium size multistate businesses
  • Stream 2: Sampled sector units
  • Stream 3: Micro Non-Employing Units

Stream 1

This stream consists of units recorded on the ABSBR as being economically significant units, plus medium size businesses which according to information recorded on the ABSBR operate in more than one state or territory and have 20 or more employees.

Stream 1 units contribute to the state and territory estimates via state data reported in the EAS.

Stream 2

This stream comprises of units selected in EAS which are not in Stream 1 and have turnover, in aggregate, above the bottom 2.5 percentile of BAS turnover for that industry, or are identified as employing businesses (based on ATO information).

Stream 2 units contribute to the state and territory estimates via proration of their data across the states and territories.

State/territory stratification is not used for selecting the EAS sample. As a result, state and territory estimates can be inaccurate due to under or over representation of some states in the selected sample. To minimise this risk, ABS uses a synthetic estimation method. The data reported by Stream 2 units is prorated across the states and territories using state/territory proration factors produced based on ABSBR survey frame information. For Sales and service income, BAS turnover is used; for Wages and salaries and Employment, BAS wages is used. The proration factors are calculated at the stratum level.

Stream 3

This stream comprises non-employing businesses whose BAS turnover, in aggregate, is below the bottom 2.5 percentile of BAS turnover for that ANZSIC subdivision. Stream 3 units contribute to state and territory estimates for the main state of operation.

Stream 3 units are not sent a survey form, but enumerated based on data sourced from the ATO. Data for Stream 3 are produced using BAS turnover to model Sales and service income. The modelling parameters are based on the relationship between BAS data and reported data for small businesses in the direct collect sample over 3 years and have been defined at the industry level. Wages and salaries have been modelled as 0 since these businesses are non-employers. Employment is based on the business type of (legal) structure.

For Stream 3 units, it is assumed that the business only operates in one state or territory. This is a reasonable assumption, given these units have no staff and very low turnover. As such, all of their reported data for the above variables contributes to the estimates of their main state of operation.

Finer level manufacturing industry estimates

Introduction

The 'Manufacturing industry' data cube contains finer level estimates for the Australian Manufacturing industry for the 2017-18, 2018-19 and 2019-20 reference periods. The estimates used a combination of data directly collected in the ABS Economic Activity Survey (EAS) and Business Activity Statement (BAS) data sourced from the Australian Taxation Office (ATO) for businesses classified to ANZSIC Division C Manufacturing.

Estimation methodology

The estimation method used to create the Manufacturing estimates made use of observed linear relationships between data collected from businesses in the EAS and auxiliary information available from BAS data. Where the auxiliary information was strongly correlated with data items collected in the EAS, this information was used to create predicted values for non-profiled businesses and small profiled businesses that were not selected in the survey. The auxiliary variables used to create predicted values were:

  • BAS total sales (to model sales and service income)
  • BAS wages and salaries (to model wages and salaries, industry value added (IVA) and employment)

Producing estimates

For the purpose of compiling the estimates in this publication, data for businesses as recorded on the ABS Business Register (ABSBR) contributed via one of three categories (or 'streams') in accordance with significance and collection-related characteristics.

The following table illustrates the ways in which Manufacturing businesses contributed to the estimates to the finer level estimates for the Manufacturing industry.

Download
Summary of data sources, finer level Manufacturing estimates 2019-20
Type of businessSurvey StreamModelled StreamBusiness Activity Statement (BAS) Stream
Sources of data*ABS survey (direct collect)ABS survey and ATO Business Activity Statements (modelled)ATO Business Activity Statements (partially modelled)
Contribution to sales and service income for Manufacturing industry59.80%39.60%0.70%

*ABS Business Register used to identify businesses of each type

Survey stream

The survey stream consisted of businesses with directly collected EAS data.

Modelled stream

The modelled stream included all businesses not selected in the EAS (the survey stream) whose turnover, in aggregate, was above the bottom 2.5 percentile of BAS sales for that industry, or were identified as employing businesses (based on ATO information).

Modelled data were created through the use of robust, trimmed regression estimators, which used survey data regressed against BAS data. The BAS data were found to have a high correlation with corresponding data from the EAS. The regression factors were obtained by utilising units from the survey stream and comparing their reported survey data with their matching BAS data. These regression factors were created at the ANZSIC subdivision level.

Sales and service income was modelled using BAS total sales as the auxiliary variable; wages and salaries, employment and IVA were modelled using BAS wages and salaries. Modelling of employment also took into account the business type (i.e. type of legal organisation) using a factor created at the ANZSIC division level. Modelled data for units in the modelled stream were created by multiplying their BAS data by the calculated regression factors.

Business Activity Statement (BAS) stream

The BAS stream comprised data for those non-employing businesses whose turnover, in aggregate, was below the bottom 2.5 percentile of BAS sales for that ANZSIC subdivision.

Data for the BAS steam was produced using a technique that used BAS turnover to model income from sales of goods and services and BAS non-capitalised purchases to model purchases. The modelling parameters were based on the relationship between BAS data and reported data for small businesses in the direct collect sample over 3 years and were defined at the industry level. Wages and salaries were modelled as 0 since these businesses were non-employers. Employment was based on the business type of (legal) structure.

Initial national ANZSIC class and state/territory ANZSIC subdivision estimates for the Manufacturing industry were produced by aggregating the contributing data streams.

State and territory ANZSIC subdivision estimates

Additional rules were applied to produce state/territory ANZSIC subdivision estimates:

  • for businesses (from any stream) operating in only a single state or territory, their initial estimates contributed to the relevant state or territory and ANZSIC subdivision estimates.
  • for businesses (from the survey stream) operating in more than one state or territory, their initial estimates (i.e. directly collected EAS data) contributed to the states and territories in alignment with the EAS methodology.
  • for businesses (from the modelled stream) operating in more than one state or territory, their initial estimates were prorated across the states and territories in which they operated, based on a factor calculated at the ANZSIC division level from surveyed multi-state units of similar size. These modelled multi-state businesses accounted for only a small proportion of the estimates.

Comparability with other EAS estimates

The ANZSIC class Manufacturing estimates for 2019-20 were created subject to the constraint of being additive to national ANZSIC subdivision estimates produced from the EAS. This was also true for state/territory estimates: the state/territory estimates within an ANZSIC subdivision were constrained to sum to the EAS estimate. This meant that the aggregate across all state/territory estimates for a given subdivision aligned with the EAS national subdivision estimate.

However, the aggregate across all ANZSIC subdivision estimates for a given state/territory were not constrained to add to the state/territory by ANZSIC division level EAS estimates. Consequently, for each state and territory, there are minor differences between the Manufacturing division level estimates contained in this data cube and the Manufacturing division EAS estimates presented in the other data cubes in this release.

Assumptions in the model

The quality of estimates depends on the validity of the following assumptions underpinning the modelling:

  • the national ANZSIC subdivision estimates and state/territory division estimates produced from the EAS were of sufficient quality to warrant disaggregation, respectively, at ANZSIC class level and state/territory level
  • it was valid to distribute the difference between EAS national subdivision estimates and the initial subdivision estimates, based on the size of the modelled stream
  • the relationship between the EAS data items and the BAS data items was meaningful and consistent. Analysis supports this assumption, with the correlation being of consistent quality to produce reliable estimates
  • the auxiliary (BAS) data was of high quality
  • the industry coding was accurate on the ABS maintained Business Register.

Users should consider the suitability of these assumptions when interpreting the estimates.

Off-June adjusted estimates

The period covered by the collection was, in general, the 12 months ended 30 June of the relevant year. Where businesses were unable to supply information on this basis, an accounting period for which data can be provided was used for data other than those relating to employment. Such businesses have made a substantial contribution to some of the estimates presented in this publication. As a result, some estimates reflect trading conditions that prevailed in periods outside the twelve months ended June in the relevant year.

Selected data items have been published after adjustment to align with the June year reporting period:

  • Wages and salaries
  • Total income
  • Total expenses
  • Industry value added

Refer to the table below for the impact of Off-June reporters on IVA estimates.

These estimates can be found in the 'Off-June year adjusted estimates by industry subdivision' data cube.

For more information about the methodology used to create these estimates refer to the ABS publication: Information Paper: Experimental Estimates for Australian Industry adjusted for Off-June Year Reporting, 2011-12.

Download
Prevalence of Off-June Year reporting in EAS 2019-20
IndustryEstimate of percentage of population by reporting period(a)Estimate of percentage contribution to IVA by reporting period(a)
Financial Year reportersOff-June year reportersFinancial Year reportersOff-June year reporters
%%%%
Mining9644555
Manufacturing9916535
Electricity, gas, water and waste services9918119
Construction1000919
Wholesale trade9826139
Retail trade1000937
Accommodation and food services9918020
Transport, postal and warehousing10008416
Information media and telecommunications9917327
Rental, hiring and real estate services10009010
Professional, scientific and technical services10008020
Administrative and support services10008515
Education and training (private)(b)9643367
Health care and social assistance (private)(b)1000946
Arts and recreation services9918317
Other services10008812
Total selected industries (c)10007525
  1. Includes all businesses in scope of the Off-June year adjusted estimates, except for non-employing entities below a certain turnover threshold. Other businesses with less than 20 employees are included in the financial year reporter category.
  2. Adjustments are applied to labour costs only.
  3. Excludes Agriculture, forestry and fishing, Financial and insurance services and Public administration and safety as well as General Government.

Quality declaration

Institutional environment

The statistics presented in this release were derived using a combination of data collected directly by the ABS, the EAS, under the authority of the Census and Statistics Act 1905 and BAS data collected by the ATO. The Income Tax Assessment Act 1936 provides for the ATO to pass information to the Australian Statistician for the purposes of the Census and Statistics Act 1905.

Please refer to ABS Institutional Environment for more information about the institutional environment of the ABS, including its legislative obligations, financing and governance arrangements and mechanisms for scrutiny of ABS operations. For more information about the institutional environment of the ATO, please refer to Part 4 Management and accountability in the Commissioner of Taxation Annual Report 2019–20.

Relevance

The main purpose of the EAS is to measure the size, structure and performance of Australian industry for use in the compilation of national accounts. The estimates permit analysis not only for a single reference period (2019-20) but also over time (annually from 2006-07).

The information is also used by government departments and economic analysts to assist in policy formulation and evaluation. Financial estimates include income, expenses, Industry value added, and capital expenditure.

A range of performance measures, usually referred to as ratios, can be produced from the data available from businesses' financial statements. The performance measures presented in this publication comprise:

  • profitability ratios, which measure rates of profit on sales
  • debt ratios, which indicate the ability of businesses to meet the cost of debt financing
  • investment ratios, which indicate the capacity of business to invest in capital assets
  • labour measures, which relate to output, labour costs and employment.

The businesses that contribute to the statistics in this publication are classified:

The scope of the EAS included all businesses operating in the Australian economy during  2019-20, except for:

  • in most industries, entities classified to the SISCA Sector 3 General government institutional sector. This exclusion particularly affects data presented for Public administration and safety, Education and training and Health care and social assistance (ANZSIC Divisions O, P and Q, respectively), in that the estimates relate only to private sector businesses. However, SISCA Sector 3 General government businesses classified to Water supply, sewerage and drainage services (ANZSIC Subdivision 28, within Division D) are included, so that the estimates include data (for example) for relevant local government organisations;
  • entities classified to ANZSIC Division K Financial and insurance services, with the exception of Subdivision 64 Auxiliary finance and insurance services, which is now included as an experimental series, see the data cube 'Experimental estimates for Auxiliary finance and insurance services' in Australian Industry (cat. no. 8155.0). Note that estimates included in this publication for Total selected industries exclude Division K Financial and insurance services.

Government owned or controlled Non-Financial Corporations are included.

The EAS was designed primarily to deliver national estimates for all in-scope industry divisions. State data were compiled for a restricted set of data items using a combination of data collected directly by the ABS and BAS data collected by the ATO.

Businesses reporting for periods other than the year ending June

Where businesses were unable to supply data for the 12 months ended 30 June 2020, an accounting period for which data can be provided was used. For more information about the treatment of this in Australian Industry see the Estimation methodology: Off-June adjusted estimates section.

Timeliness

The EAS is conducted annually with estimates generally available within twelve months of the reference period to which they relate. For the 2019-20 reference period, questionnaires were despatched by ABS in August 2020 and BAS data were received from the ATO in September 2020. The estimates are scheduled for release in May 2021, almost eleven months after the end of the reference period.

Accuracy

The ABS aims to produce high quality data from its industry collections while minimising the reporting burden on businesses. To achieve this, extensive effort is put into survey and questionnaire design, collection procedures and processing. The 2019-20 survey used generalised regression estimation. Generalised regression estimation is a form of ratio estimation which makes use of auxiliary data items which are strongly correlated with key data items directly collected by the ABS from businesses. The auxiliary variables used in this survey were turnover and wages from data sourced from the ATO. Use of this methodology allowed high quality statistics to be produced from a small, direct collect sample of 17,854 businesses.

Two types of error can occur in estimates that are based on a sample survey: sampling error and non-sampling error.

Sampling error

Sampling error occurs when a sample, rather than the entire population, is surveyed. It reflects the difference between estimates based on a sample and those that would have been obtained had a census been conducted. One measure of this difference is the standard error. There are about two chances in three that a sample estimate will differ by less than one standard error from the figure that would have been obtained if all businesses had been included in the survey, and about nineteen chances in twenty that the difference will be less than two standard errors.

Another measure of sampling error is the relative standard error (RSE), which is obtained by expressing the standard error as a percentage of the estimate to which it refers. The relative standard error is a useful measure in that it provides an immediate indication of the sampling error in percentage terms, and this avoids the need to refer also to the size of the estimate. Selected data item RSEs at the industry division level for Australia are shown in the table below. Detailed relative standard errors are available on request.

To illustrate, the estimate of Total income for Mining in 2019-20 was $337,191m. The RSE of this estimate is shown as 0.3%, giving a standard error of approximately $1,012m. Therefore, there are two chances in three that, if all units had been included in the survey, a figure in the range of $336,179m to $338,203m would have been obtained, and nineteen chances in twenty (i.e. a confidence interval of 95%) that the figure would have been within the range of $335,167m to $339,215m.

The size of the RSE may be a misleading indicator of the reliability of the estimates for (a) Operating profit before tax, (b) Earnings before interest, tax, depreciation and amortisation and (c) Industry value added. It is possible for an estimate to legitimately include positive and negative values, reflecting the financial performance of individual businesses. In this case, the aggregated estimate can be small relative to the contribution of individual businesses, resulting in a standard error which is large relative to the estimate.

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Relative standard errors EAS 2019-20
 EmploymentWagesSales and service incomeIncomeExpensesOPBTEBITDAIVA
Industry%%%%%%%%
Agriculture, forestry and fishing1.92.82.72.52.810.27.64.9
Mining0.80.50.30.30.40.80.30.2
Manufacturing0.90.70.60.60.62.82.00.9
Electricity, gas, water and waste services1.20.80.80.90.95.12.01.4
Construction2.42.91.81.71.95.65.02.7
Wholesale trade2.32.01.51.51.66.76.62.8
Retail trade2.42.21.01.01.17.65.82.4
Accommodation and food services4.13.43.43.13.717.99.23.2
Transport, postal and warehousing2.01.32.22.22.322.45.52.7
Information media and telecommunications2.21.61.11.11.131.52.51.6
Rental, hiring and real estate services2.82.52.83.32.77.65.13.6
Professional, scientific and technical services2.11.32.11.72.15.510.42.7
Administrative and support services2.82.21.81.71.914.712.32.6
Public administration and safety (private)4.83.22.52.52.615.27.13.0
Education and training (private)2.21.32.71.31.36.46.81.5
Health care and social assistance (private)2.91.92.32.02.68.77.62.3
Arts and recreation services4.01.51.91.61.77.17.52.9
Other services3.22.12.31.91.79.417.32.6
Total selected industries*0.70.50.40.40.41.81.30.6

*Excludes Division K Financial and insurance services.

Non-sampling error

Non-sampling error arises from inaccuracies in collecting, recording and processing the data. Every effort was made to minimise reporting error, by the careful design of questionnaires, intensive training of survey analysts, and efficient data processing procedures. The imprecision due to non-sampling variability cannot be quantified and should not be confused with sampling variability, which is measured by the standard error.

Differences in accounting policy and practices across businesses and industries can also lead to some inconsistencies in the data provided to compile the estimates. Although much of the accounting process is subject to standards, there remains a great deal of flexibility available to individual businesses in the accounting policies and practices they adopt.

The above limitations are not meant to imply that analysis based on these data should be avoided, only that the limitations should be considered when interpreting the data. This publication presents a wide range of data that can be used to analyse business and industry performance. It is important that any analysis be based upon the range of data presented rather than focusing on one variable.

Non-sampling error also occurs when information cannot be obtained from all businesses selected in the survey. For the 2019-20 EAS, there was an 84.6% response rate from all businesses that were surveyed and found to be operating during the reference period. Data were imputed for the remaining 15.4% of operating businesses. This imputation contributed 11.1% to the estimate of Total income for Total selected industries.

Coherence

The ABS has been conducting the EAS annually since 1990–91, collecting a core set of data items each year. The definitions of these are reviewed each year and are refined or respecified as needed. Additional data items are collected in different years, in response to demand and priorities.

Since the 2006–07 reference year the survey has been conducted using ANZSIC 2006 and new methodologies. As a result, a new series of these estimates commenced from 2006–07. 

Interpretability

Estimates from the 2019-20 EAS are available as original series only, and are neither seasonally nor trend adjusted.

Although financial estimates in this release relate to the full twelve months, Employment estimates relate to the last pay period ending in June of the given year.

Further information about terminology and other technical aspects associated with these statistics can be found in the Explanatory Notes, the Estimation Methodology section and the Glossary.

Accessibility

Data from the 2019-20 EAS are available free of charge on the ABS website.

Glossary

Data presented in this release have been compiled from the standard financial accounts of businesses. Therefore, the definition of each reported item aligns closely with that adopted in standard business accounting practice. Included in the glossary are published data items and components used to calculate derived items.

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Bad and doubtful debts

Represents the amount of bad and doubtful debts written-off, net of bad and doubtful debts previously written-off but recovered.

Business

A business is generally considered to be a person, partnership, or corporation engaged in business or commerce.

In this publication, the term represents the Australian Business Number (ABN) unit or type of activity unit (TAU), which are the two standard statistical units for the 2019-20 Economic Activity Survey (EAS). For details, see the Explanatory Notes above.

Business size

Businesses are categorised as:

  • large businesses, with 200 or more employees
  • medium businesses, with 20 to 199 employees
  • small businesses, with 5 to 19 employees
  • micro businesses, with 0 to 4 employees (including non-employing businesses).

Capital expenditure

Total (gross) expenditure on acquiring fixed tangible and intangible assets, before deduction of trade-in allowances, and including expenses (except capitalised interest) incurred during the year in acquiring such assets. Fixed tangible assets include land, dwellings, other buildings and structures, plant, machinery and equipment (including motor vehicles). Intangible assets include capitalised exploration expenditure, patents, licences and goodwill.

Capital expenditure on dwellings, other buildings and structures

Capital expenditure incurred acquiring dwellings, other buildings and structures, including roads, factories, warehouses, offices, bridges, mine development, and oil and gas platforms. Represents expenditure before deduction of trade-in allowances, and includes expenses (except capitalised interest) incurred during the year in acquiring such assets.

Capital expenditure on other assets (including land and intangible assets)

Capital expenditure incurred acquiring assets other than dwellings, other buildings and structures and plant, machinery and equipment. Includes land and intangible assets such as exploration and evaluation expenditure both capitalised and expensed, patents, licences and goodwill. Also included is computer software capitalised, including capitalised computer software licence fees, installation costs, the purchase or development of large databases, software developed in-house (but excluded is software maintenance expenditure), and capitalised payments to contractors and consultants for software development. Note that if the cost of software and hardware cannot be separated, the total cost is included in acquisition of plant, machinery and equipment.

Capital expenditure on plant, machinery and equipment

Capital expenditure incurred acquiring plant, machinery and other equipment, including motor vehicles. Includes expenses (except capitalised interest) incurred during the year in acquiring such assets.

Capital work done for own use

Capitalised work done by the employees or proprietors of a business in manufacturing, constructing, installing or repairing assets, in mineral and petroleum exploration activities, and the in-house development of computer software, for use by the business or for rental or lease. This work is valued as the capitalised costs of the materials and the wages and salaries and 'on-costs' involved, as well as any amounts paid to contractors and subcontractors for their involvement in the project. Prior to the 2014-15 EAS, this item excluded any 'on-costs' paid to the employee in addition to their wages and salaries and the amounts paid to contractors and subcontractors. For more information see the entries for capitalised purchases and capitalised wages and salaries below.

Capitalised purchases

All capitalised costs incurred in developing an asset developed in-house by the employees of the business/organisation for use by the business or for rental or lease, excluding any amounts included in capitalised wages and salaries paid to own employees. This includes the costs of goods and materials used to develop and build the asset and services such as invoiced amounts paid to contractors and subcontractors for their involvement in the project. Prior to the 2014-15 EAS, this item excluded amounts paid to contractors and subcontractors for their involvement in the project.

Capitalised wages and salaries

Capitalised payment of wages and salaries and 'on-costs' paid to employees for work done by own employees in manufacturing, constructing, installing or repairing assets, mineral and petroleum exploration activities or in developing computer software in-house for use by the business or for rental or lease, including wages paid to own employees to project manage the development of the asset. 'On-costs' include employee entitlements such as superannuation, fringe benefits tax and workers' compensation. Prior to the 2014-15 EAS, this item excluded any 'on-costs' paid to the employee in addition to their wages and salaries.

Change in inventories

The value of total closing inventories less total opening inventories.

Closing inventories

The value of all inventories of finished goods (including mineral ores and inventories for resale), work-in-progress (less progress payments billed), raw materials, fuels and containers at the end of the reporting period.

Contract mining expenses

Contract payments for Mining services. Includes amounts paid/payable to Mining contractors and associated freight charges for materials brought in by the contractor.

Depreciation and amortisation

Depreciation/amortisation allowed on tangible and intangible assets. Includes, for lessees only, depreciation/amortisation in respect of finance leases.

Disposal of assets

Proceeds from the sale of tangible assets (plant, machinery, equipment, land, dwellings, other buildings and structures), and intangible assets (such as patents, licences and goodwill).

Earnings before interest, tax, depreciation and amortisation (EBITDA)

Profit prior to the deduction of net interest (interest income minus interest expenses), income tax, depreciation and amortisation. Items classifiable to other income are also excluded.

Employer contributions to superannuation

Includes all employer contributions to superannuation funds (including the employer productivity contribution) and provisions for employer contributions to superannuation funds. Also includes expenses relating to employer funded defined benefit schemes. Employee contributions and salary sacrifice contributions are excluded.

Employment at end June

Number of persons working for businesses during the last pay period ending in June of the given year. Includes working proprietors and partners, employees absent on paid or prepaid leave, employees on workers' compensation who continue to be paid through the payroll, and contract workers paid through the payroll. Excludes non-salaried directors and volunteers.

Freight and cartage expenses

Includes handling charges and payments to owner/drivers for delivery of minerals. Excludes the cost of delivery by own vehicles and employees and overseas freight and cartage on goods exported.

Fringe benefits tax

Fringe benefits tax is payable by employers when certain benefits in excess of normal wages or salaries (e.g. free or discounted goods or services) are received by their employees (or associates of employees) in connection with their employment.

Funding from government for operational costs (including COVID-19 support payments)

This item appears in the industry performance tables (table 4) in each of the division, subdivision, Mining and Auxiliary finance and insurance services. It comprises funding from government for amounts reimbursed under fuel tax credits, and for other operational costs and for COVID-19 support measures: JobKeeper, Boosting Cash Flow for Employers and other COVID-19 support measures. For details, see the entries for these items below. For further information, see the section on the treatment of COVID-19 government support measures in Australian Industry in this release.

Funding from government for operational costs (excluding COVID-19 support payments)

This item appears in the industry value added tables (table 3) in each of the division, subdivision, Mining and Auxiliary finance and insurance services. It comprises funding from government for amounts reimbursed under fuel tax credits, and for other operational costs excluding any COVID-19 support measures. For details, see the entries for these items below. For further information, see the section on the treatment of COVID-19 government support measures in Australian Industry in this release.

Funding from government for operational costs: Amount reimbursed under fuel tax credits

The Energy Grants (Credits) Scheme was replaced by fuel tax credits from 1 July 2006. Fuel tax credits provide businesses with a credit for the fuel tax (excise or customs duty) included in the price of fuel used for business activities in machinery, plant, equipment and heavy vehicles.

Funding from government for operational costs: Other operational costs (including COVID-19 support payments)

This item appears in the industry value added table (table 3) in the Mining industry data cube. Funding from federal, state and/or local government for operational costs (e.g. wages and salaries, rent, food). Includes bounties, subsidies, export grants, apprenticeship and traineeship schemes, and community service obligation payments and for COVID-19 support measures: JobKeeper, Boosting Cash Flow for Employers and other COVID-19 support measures. For details, see the entries for these items below. For further information, see the section on the treatment of COVID-19 government support measures in Australian Industry in this release. Excludes funding from government for specific capital items.

Funding from government for operational costs: Other operational costs (excluding COVID-19 support payments)

This item appears in the industry performance table (table 4) in the Mining industry data cube. Funding from federal, state and/or local government for operational costs (e.g. wages and salaries, rent, food). Includes bounties, subsidies, export grants, apprenticeship and traineeship schemes, and community service obligation payments. Excludes COVID-19 support measures: JobKeeper, Boosting Cash Flow for Employers and other COVID-19 support measures. For details, see the entries for these items below. For further information, see the section on the treatment of COVID-19 government support measures in Australian Industry in this release. Excludes funding from government for specific capital items.

Funding from government for operational costs: JobKeeper scheme

Commencing on 30 March 2020, JobKeeper payments were introduced by the Australian Government to support eligible employers. The payments were made by the Australian Taxation Office directly to eligible sole traders and eligible employers who had direct responsibility for ensuring that eligible employees received a wage of at least $1,500 per fortnight. These payments impacted the last quarter of the 2019-20 Economic Activity Survey (EAS). 

Payments by eligible employers were made through their payroll to eligible employees, within the conditions of their existing employer-employee relationships. All payments to employees were reported through the tax system and are included in Wages and salaries, Selected labour costs, Total labour costs and Total expenses. Payments to eligible sole traders are included in OPBT and EBITDA.

Funding from government for operational costs: Boosting Cash Flow for Employers scheme

From 28 April 2020, the Australian Government provided temporary cash flow support to small and medium businesses and not-for-profit organisations that employed staff during the economic downturn associated with COVID-19. This was done through two sets of cash flow "boosts" during 2020. The first "boost" was delivered following lodgement of activity statements for March, April, May and June 2020 (monthly lodgers) and activity statements for the March and June Quarter 2020 (quarterly lodgers). 

The second "boost" was delivered to monthly activity statement lodgers following lodgement of their June, July, August and September 2020 activity statements. Delivery to quarterly lodgers occurred after lodgement of their June and September Quarter 2020 statements. Only payments received by businesses as part of the second "boost" which related to the June 2020 reporting period are included in the scope of the EAS 2019-20 estimates. 

Funding from government for operational costs: Other COVID-19 support payments and subsidies

Includes all targeted support payments and subsidies paid to eligible businesses by the Australian Government other than JobKeeper and Boosting Cash Flow for Employers as part of their response to the COVID-19 pandemic i.e. electricity bills support to eligible producers, rental relief and aged care industry support measures.

Funding from government for specific capital items

Includes capital grants, and low interest or interest free loans made by government to businesses to encourage expenditure on specific equipment (e.g. environmental protection equipment).

Gross fixed capital formation (GFCF)

Gross fixed capital formation is measured by the total value of a producer's acquisitions, less disposals, of fixed assets during the reference period, plus certain additions to the value of non-produced assets realised by the productive activity of businesses.

Fixed assets are tangible or intangible assets such as computer software and produced as outputs from processes of production that are themselves used repeatedly or continuously in other processes of production for more than one year.

The derivation of GFCF is as follows:

Acquisition of

  • Road vehicles
  • Other transport equipment
  • Industrial machinery and equipment
  • Computer software capitalised
  • Computers and computer peripherals
  • Electronic equipment and electrical machinery
  • Communications equipment
  • Other plant and equipment
  • Dwellings, other buildings and structures
  • Computer software expensed
  • Mining exploration and evaluation expensed as incurred

less disposal of

  • Plant, machinery and equipment (including motor vehicles)
  • Dwellings, other buildings and structures

equals

  • GFCF

Income from services

See the entry for sales and service income.

Industry class

The structure of ANZSIC comprises four levels, ranging from industry division (broadest level) to industry class (finest level). Activities are narrowly defined within the industry class level, which is identified by a four-digit code, e.g. Industry Class 1510 Pulp, paper and paperboard manufacturing. Usually, an activity is primarily defined to one class. However, some activities may be primary to more than one class.

Industry division

The structure of ANZSIC comprises four levels, ranging from industry division (broadest level) to industry class (finest level). The main purpose of the industry division level is to provide a limited number of categories which give a broad overall picture of the economy. There are 19 divisions within ANZSIC, each identified by an alphabetical letter, that is, 'A' for Agriculture, forestry and fishing, 'B' for Mining, 'C' for Manufacturing, etc. 

Industry subdivision

This is the broadest level category within each industry division of ANZSIC and is identified by a two-digit code, e.g. Industry Subdivision 14 for Wood product manufacturing. Industry subdivisions are built up from industry groups which, in turn, are built up from industry classes.

Industry value added (IVA)

IVA is an estimate of the difference between the market value of the output of an industry and the purchases of materials and expenses incurred in the production of that output.

The derivation of IVA for individual businesses depends on whether they are classified as market or non-market producers. Non-market producers are those institutions which provide goods or services either free or at prices that are not economically significant. In other words, their prices are not significantly influenced by the amounts that producers are willing to supply, nor the amounts that users are willing to pay to purchase the goods or services being provided. Conversely, market producers provide goods and services at prices that are economically significant.

For market producers, the derivation of IVA is as follows:

  • Sales and service income

plus

  • Funding from government for operational costs (excluding COVID-19 support payments)
  • Capital work done for own use
  • Change in inventories

less

  • Purchases of goods and materials
  • Other intermediate input expenses

equals

  • IVA

However, it should be noted that IVA is a measure of economic activity and is not equivalent to operating profit before tax (OPBT). Wage and salary expenses, and most other labour costs, are not taken into account in the calculation for market producers, neither are interest expenses, depreciation or a number of lesser expenses. On the income side, OPBT includes total income, whereas IVA only includes sales and service income and government funding for operational costs (excluding COVID-19 support payments and subsidies).

As a principle, the output of non-market production is valued at cost, including intermediate input expenses. As shown in the above derivation, purchases and other intermediate input expenses are deducted from output in order to arrive at IVA.

Accordingly, the derivation of IVA for non-market producers can be described as follows:

  • Selected labour costs

plus    

  • Depreciation and amortisation

equals

  • IVA

Estimates of industry value added are obtained by summing the contributions of businesses classified to that industry, both market and (if any) non-market producers. Market producers are predominate in most industries. 

Industry value added is related to, but different from, the national accounting variable gross value added (GVA). For national accounts purposes, GVA is calculated by adjusting IVA to include General government units and also to account for some other effects, such as inventory holding adjustments and adjustments for financial intermediary services, insurance services, and prices, taxes and subsidies.

Industry value added per person employed

IVA of businesses which operated in a given industry during the given year, divided by the number of persons employed by businesses in that industry during the last pay period ending in June of that year. Persons employed include working proprietors and partners.

Insurance premiums

Premiums for fire, general, accident, public liability, optional third-party and comprehensive motor vehicle insurance, professional indemnity insurance and common law liability. Excludes workers' compensation insurance premiums/costs (included in selected labour costs), compulsory third party motor vehicle insurance premiums (included in motor vehicle running expenses), and reinsurance premiums paid.

Interest coverage

The number of times that businesses can meet their interest expenses from their earnings before net interest, tax, depreciation and amortisation (EBITDA), i.e. earnings before interest, tax, depreciation and amortisation divided by interest expenses.

Interest expenses

Includes interest paid on loans from banks, finance companies, partners, and related or unrelated businesses, and in respect of finance leases. Also includes interest equivalents such as hedging costs and expenses associated with discounted bills. Excludes bank charges other than interest, and capital repayments.

Interest income

Includes interest received from deposits in banks and non-bank financial institutions, loans, advances, finance leases and earnings on discounted bills. Excludes capital payments received.

Investment rate (value added)

The proportion of industry value added (IVA) used to acquire capital, i.e. (capital expenditure divided by IVA) multiplied by 100.

Labour costs

Comprises wages and salaries (including salary sacrificed earnings paid on behalf of employees and employee share based payments and stock options), employer contributions into superannuation, workers' compensation premiums/costs, fringe benefits tax and payroll tax. Also includes capitalised wages and salaries.

Large business

See the entry for business size.

Medium business

See the entry for business size.

Micro business

See the entry for business size.

Motor vehicle running expenses

Includes expenditure on registration fees, compulsory third-party insurance premiums, fuel, and repair and maintenance expenses for on-road motor vehicles. Excludes expenses for off-road motor vehicles (e.g. mobile plant, quarry dump trucks) and lease payments, optional third party and comprehensive motor vehicle insurance premiums, and depreciation.

Natural resource royalties expenses

Includes payments under mineral lease arrangements, payments under timber and quarrying lease arrangements, and resource rent taxes and royalties. Excludes payments for royalties from intellectual property (e.g. patents and copyrights) and computer software licence fees. Gold tax payments are also excluded.

Net capital expenditure

The value of total capital expenditure less proceeds received from the disposal of assets. See the entries for these items.

Off-June Year adjusted estimates

The financial data collected in the EAS generally represent the 12 month period ended 30 June. Where businesses are unable to provide data on this basis, an alternate, or Off-June year accounting period is used. This issue particularly affects the Mining industry. As a result, in some instances estimates may reflect trading conditions occurring outside of the published reference year.

For current June estimates, see the 'Off-June Year adjusted estimates by subdivision' data cube in this issue.

For further information about Off-June year adjusted estimates, see the Estimation methodology section below.

Opening inventories

The value of all inventories of finished goods (including mineral ores and inventories for resale), work-in-progress (less progress payments billed), raw materials, fuels and containers at the beginning of the reporting period.

Operating profit before tax (OPBT)

Profit before extraordinary items are brought to account and prior to the deduction of income tax and appropriations to owners (e.g. dividends paid), i.e. total income less total expenses plus change in inventories.

Other contract, subcontract and commission expenses

Payments to other businesses and self-employed persons for work done or sales made on a contract or commission basis. Payments to persons paid by commission without a retainer are also included. Includes payments to owner drivers for removal of material, but not for delivery of the final mineral product. Excludes contract mining expenses, published separately.

Other selected expenses

Expenditure items not separately itemised in the industry performance table. Examples include bad and doubtful debts, natural resource royalty expenses, land tax and land rates, computer software expenses, freight, other royalties expenses, exploration and evaluation expenditure expensed as incurred, payments to employment agencies for staff and other operating expenses.

Other income

Income from sources not separately itemised, including:

  • dividend income
  • donations
  • net profit or loss on share trading, asset sales, variations in exchange rates or resulting from the revaluation of assets in accordance with the Australian International Financial Reporting Standards (AIFRS).

Also includes funding from government for specific capital items in the Industry performance tables only (in division, subdivision Mining and Auxiliary finance and insurance services data cubes).

Other intermediate input expenses

Expenditure items not separately itemised in the industry value added table. Examples include payments to other businesses for staff, freight expenses, royalties expenses and other contract, subcontract and commission expenses.

Payroll tax

A tax levied by state and territory governments on the amount of wages and salaries paid by a business. Excludes pay-as-you-go withholding tax.

Profit margin

The percentage of sales and service income available as operating profit before tax (OPBT), i.e. (OPBT divided by sales and service income) multiplied by 100.

Purchases of goods and materials

Purchases of materials, components, explosives, containers, packaging materials, fuels, electricity and water, and purchases of minerals and other goods for resale. Also includes capitalised purchases. Excludes purchases of parts and fuels for on-road motor vehicles, but includes fuels for off-road vehicles, such as mobile plant and quarry dump trucks.

Rent, leasing and hiring expenses

Payments for the rent, leasing and hiring of land, dwellings, other buildings and structures, motor vehicles, plant, machinery and other equipment (including telecommunication equipment). Includes operating lease payments not captured under interest expenses or depreciation; excludes finance lease payments.

Rent, leasing and hiring income

See the entry for sales and service income.

Repair and maintenance expenses

Includes computer and communication software and hardware maintenance, and repair and maintenance of off-road motor vehicles. Excludes repair and maintenance costs of on-road motor vehicles and the wages and salaries of own employees undertaking repair and maintenance.

Sales and service income

Sales of goods

  • Includes goods whether produced or not by the business (including goods produced for the business on a commission basis).
  • Includes export sales, sales or transfers to related businesses or to overseas branches of the business, progress payments relating to long term contracts if they are billed in the period, delivery charges not separately invoiced or itemised to customers, sales of goods produced by the business from crude materials purchased, and income from 'specific' rates (e.g. water, sewerage, irrigation and drainage rates).
  • Excludes excise and duties received on behalf of the government (e.g. the petroleum production excise duty), sales of assets, natural resource royalties income, interest income, and delivery charges separately invoiced or itemised to customers.
  • Exports are valued free on board, i.e. export freight charges are excluded.
  • This item is included in sales and service income, and is not separately published except for Mining.

Income from services (including royalties)

  • Includes income from consulting services, income received from transporting goods not owned or sold by this business/organisation, repair, maintenance and service income and fees, contract, subcontract and commission income, management fees/charges from related and unrelated businesses, installation charges, delivery charges separately invoiced or itemised to customers and royalties from intellectual property (e.g. patents and copyrights) and natural resource royalties income.
  • Also includes income from the provision of transport services and fee for service income.
  • Includes government funding to reduce the expenses of the final consumer (i.e. households) where paid directly from government to the business providing the service. This type of funding is classified as sales and service income. Examples include the Child Care Subsidy, Medicare Benefits payments, a number of aged care subsidies and supplements and National Disability Insurance Scheme (NDIS) payments.
  • Excludes interest income, and delivery charges not separately invoiced to customers.
  • This item is included in sales and service income, and is not separately published except for Mining.

Rent, leasing and hiring income

  • Derived from the ownership of land, dwellings, buildings and other structures, motor vehicles, plant, machinery and other equipment.
  • Excludes royalties from mineral leases, income from finance leases and payments received under hire purchase arrangements.
  • This item is included in sales and service income, and is not separately published except for Mining.

These are valued net of discounts given and exclusive of goods and services tax (GST). Extraordinary items are also excluded.

Sales and service income per person employed

Sales and service income of businesses which operated in a given industry during the given year ended 30 June, divided by the number of persons employed by businesses in that industry during the last pay period ending in June of that year. Persons employed include working proprietors and partners.

Sales of goods

See the entry for sales and service income.

Selected labour costs

Comprises wages and salaries (including provisions for employee entitlements, salary sacrificed earnings, share based payments and stock options); employer contributions into superannuation; and workers' compensation premiums/costs.

Small business

See the entry for business size.

Superannuation

See the entry for employer contributions into superannuation.

Total expenses

The sum of all expense components.

Total income

Comprises sales and service income, interest income, funding from government for operational costs and other income (for details, see the entries for these items).

Total mining

Comprises all classes in ANZSIC Division B Mining (i.e. Subdivisions 06-10).

Total selected industries

This comprises data for all ANZSIC divisions, excluding ANZSIC Division K Financial and insurance services. For a detailed discussion of the scope and coverage of the estimates, see the Explanatory Notes. Units classified to the General government institutional sector are excluded from the scope of estimates for most industries that comprise Total selected industries. This limits coverage to private sector entities which particularly affects Public administration and safety, Education and training, and Health care and social assistance divisions.

Wages and salaries

The gross wages and salaries (including capitalised wages and salaries) of all employees of the business. The item includes severance, termination and redundancy payments, salaries and fees of directors and executives, retainers and commissions of persons who received a retainer, bonuses, and annual and other types of leave. Provision expenses for employee entitlements (e.g. provisions for annual leave and leave bonus, long service leave, sick leave, and severance, termination and redundancy payments) are also included, as are salary sacrificed earnings and remuneration of employees in the form of share based payments and stock options. (Note that in issues of this publication prior to 2006-07, salary sacrificed earnings and remuneration of employees in the form of share based payments and stock options were reported under related expense items. For example, salary sacrificed for superannuation was included in employer contributions into superannuation).

Payments related to self-employed persons such as consultants, contractors and persons paid solely by commission without a retainer are excluded. The drawings of working proprietors and partners are also excluded.

Wages and salaries per employee

The wages and salaries paid by businesses which operated in a given industry during the given year ended 30 June, divided by the number of employees in that industry during the last pay period ending in June of that year. Working proprietors and partners are not included in employee estimates. The drawings of working proprietors and partners are not included in estimates of wages and salaries.

Wages and salaries to sales and service income ratio

The wages and salaries paid by businesses which operated during the year ended 30 June as a proportion of the sales and service income of businesses which operated during the same year.

Workers' compensation premiums/costs

Workers' compensation is a compulsory insurance cover to be taken out by all employers, except for self-insured workers, according to legislative schemes to cover employees suffering injury or disease in the course of or arising out of employment.

Abbreviations

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'000thousand
$'000thousand dollars
$bbillion (thousand million) dollars
$mmillion dollars
ABNAustralian Business Number
ABRAustralian Business Register
ABSAustralian Bureau of Statistics
ABSBRAustralian Bureau of Statistics Business Register
ACTAustralian Capital Territory
AIFRSAustralian International Financial Reporting Standards
ANZSICAustralian and New Zealand Standard Industrial Classification
ATOAustralian Taxation Office
Aust.Australia
BASBusiness Activity Statement
COVID-19SARS-CoV-2 virus or coronavirus disease 2019
EASEconomic Activity Survey
EBITDAearnings before interest, tax, depreciation and amortisation
GFCFgross fixed capital formation
IVAindustry value added
n.e.c.not elsewhere classified
NDISNational Disability Insurance Scheme
no.number
NSWNew South Wales
NTNorthern Territory
OPBToperating profit before tax
QBISQuarterly Business Indicators Survey
QldQueensland
RSErelative standard error
SASouth Australia
SISCAStandard Institutional Sector Classification of Australia
Tas.Tasmania
TAUtype of activity unit
Vic.Victoria
WAWestern Australia