Latest release

Counts of Australian Businesses, including Entries and Exits methodology

Reference period
July 2017 - June 2021

How the data is collected

Source

The data used to produce these counts are extracted from the Australian Bureau of Statistics Business Register (ABSBR). The ABSBR is populated using administrative data from ABN registrations recorded in the Australian Business Register (ABR), and business data from the Australian Tax Office (ATO). Data on the structures of large and complex businesses are also collected by ABS.

A conceptual and practical basis of counts has been published to show how the counts published in CABEE are derived from total registered ABNs, and the counts published by the ABR.

The results in this publication are based, in part on ABR data supplied by the Registrar to the ABS under the A New Tax System (Australian Business Number) Act 1999 and ATO data supplied to the ABS by the ATO under the Taxation Administration Act 1953. These require that such data is only used for the purpose of carrying out the functions of the ABS. In addition, no individual information collected under the Census and Statistics Act 1905 is provided back to the Registrar or 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 ABR or ATO’s core operational requirements.

Legislative requirements to ensure privacy and secrecy of this data have been followed. Only people authorised under the Australian Bureau of Statistics Act 1975 have been allowed to view data about any particular firm in conducting these analyses. Results have been confidentialised in accordance with the Census and Statistics Act 1905, to ensure that they are not likely to enable identification of a particular person or organisation.

Further information regarding these Acts can be found at the Federal Register of Legislation website. Information about the ABR can be obtained from the ABR website and the ATO website.

ABS statistics 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 and is subject to the requirements of the Census and Statistics Act 1905.

Reference period

Annual data is compiled from an extract of source data taken in mid-May each year.  This information is used to compile the financial year counts as of June 30 for the past five years.

Quarterly data is compiled from data extracts which align with the mid-point of each calendar quarter.  That is, the September 2020 quarter represents the period between mid-May 2020 and mid-August 2020.

Scope

Counts of businesses in this release include only actively trading businesses in the Australian market sector. Actively trading businesses are:

  • Type of Activity Unit (TAUs) from the profiled population.
  • ABNs from the non-profiled population that are actively remitting Goods and Services Tax (GST).

Statistical unit

For the purposes of CABEE, a business is defined as a legal entity engaging in productive activity and/or other forms of economic activity in the market sector. Such entities accumulate assets on their own account and/or hold assets on behalf of others, and may incur liabilities.

The economic activities of individuals are excluded, with the exception of individuals who engage in productive activity, either as a sole trader or in a partnership or trust.

Businesses are defined to be engaging in productive activity where they have a Goods and Services Tax (GST) role and are actively remitting GST through Business Activity Statements (BAS).

Two-population model

The businesses on the ABSBR are separated using a two population model. The two populations are known as 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

Most businesses included on the ABSBR are in the non-profiled population. Most of these businesses have simple structures that are suitable for ABS statistical purposes at the Australian Business Number (ABN) level. For the non-profiled population, one ABN equates to one business.

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 economic units structure through direct contact with businesses. These businesses constitute the profiled population and are represented by Type of Activity Unit’s (TAU’s). This population consists of large, complex and diverse groups of businesses.

A Type of Activity Unit (TAU) consists of one or more business entities, sub entities or branches of a business that can be grouped according to production activity, and can report a minimum set of data items. These TAUs are classified according to the industry of the main activity. The relationship between TAU’s and their associated legal entities (ABN’s) may be one-to-one, many-to-one, or one-to-many.

The statistical unit referred to as a 'business' consists of ABNs from the non-profiled population and TAUs from the profiled population.

Business activity statement (BAS)

Business Activity Statements (BAS) are reports that businesses lodge with the ATO on a monthly, quarterly or annual basis. They include the amount the business earned, the amount of GST collected, the amount of GST credits on goods and services purchased, pay as you go (PAYG) tax instalments and other tax reporting obligations.

A business may still be counted as actively trading at the end of the financial year even if it has ceased operating, if the associated ABN has not been cancelled and, the business has remitted GST within the last five quarters (or three years for annual remitters).

Long-term non remitters (LTNRs)

Businesses that have not submitted a Business Activity Statement (BAS) and/or have reported zero dollar amounts over five consecutive quarters (or three consecutive years for annual remitters) are treated as 'long-term non-remitters' (LTNRs). These businesses are not considered to be actively trading and are excluded from the counts as they are not remitting GST.

A business may be classified as a LTNR at the end of the reference period, and therefore be excluded from the count of actively trading businesses in CABEE, then resume remitting GST at a later date. Such a business may have been operating during the period it was classified as a LTNR, despite not remitting GST during this time. These businesses are counted as exits in the reference period they become a LTNR, and again as entries in the reference period they resume remitting GST.

Classification

Units on the ABSBR have been classified according to the Standard Institutional Sector Classification of Australia (SISCA) 2008, Type of Legal Organisation (TOLO) and Australian and New Zealand Industry Classification (ANZSIC) 2006. These classifications are used to determine whether a business unit is in scope of CABEE, and to publish counts.

1. Annual Data

The SISCA, ANZSIC and TOLO classifications of a business in the final year of the publication are applied across all five years in the publication. This is known as a back-cast classification.

2. Quarterly Data

The SISCA, ANZSIC and TOLO classifications represent a business' classification at the time data was extracted for that quarter. This is known as a point-in-time classification.

For this reason, business counts for the classifications available in the quarterly data cube may not align with the annual CABEE timeseries.

Standard institutional sector classification of Australia (SISCA)

SISCA is based on the System of National Accounts 2008 (SNA08) institutional sector classification. Entities classified to the following categories of SISCA are excluded:

  • 2110 Reserve Bank of Australia
  • 3000 General Government
  • 5000 Non-Profit Institutions Serving Households
  • 6000 Rest of the World
     

The exclusion of the General Government institutional sector particularly impacts on counts for the Public Administration and Safety, Education and Training, and Health Care and Social Assistance ANZSIC divisions (O, P and Q respectively).

For more information users should refer to Standard Economic Sector Classifications of Australia (SESCA), 2008 (cat. no. 1218.0).

Type of legal organisation (TOLO)

TOLO indicates whether a business is part of the private or public sector, and the type of ownership structure it has. Entities classified to the following TOLO categories are excluded:

  • 26 Other Unincorporated Entities
  • 33 Foreign Government

In-scope TOLO classifications are grouped in the data published in CABEE based on the following concordance:

Download
 
TOLO grouping in CABEE dataTolo Classification
Total Companies11 Proprietary Companies
12 Public Companies
13 Other Incorporated Entities
Sole Proprietors21 Sole Proprietors
Total Partnerships22 Family Partnership
23 Other Partnership
Trusts24 Trusts Regarded as Corporations
25 Other Trusts
Public Companies31 Government Companies
32 Other Government Entities

For more information users should refer to Standard Economic Sector Classifications of Australia (SESCA), 2008 (cat. no. 1218.0).

Industry

Each business has been classified to a single ANZSIC 2006 industry class. The industry class allocated is the activity which provides the main source of industry value added (sales of goods and services, wages and salaries or number of employees as a proxy), which is generally based on a description provided by the business.

Entities classified to the following 4 digit ANZSIC classes are excluded:

  • 6210 Central Banking
  • 6330 Superannuation Funds
  • 7711 Police Services
  • 7713 Fire Protection and Other Emergency Services
  • 9540 Religious Services
  • 9551 Business and Professional Associations
  • 9552 Labour Association Services
  • 9559 Other Interest Group Services n.e.c.
  • 9601 Private Households Employing Staff
  • 9602 Undifferentiated Goods-Producing Activities of Private Households for Own Use
  • 9603 Undifferentiated Service-Producing Activities of Private Households for Own Use
     

For more information, users should refer to the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (cat. no. 1292.0).

Coverage

There are actively trading businesses that have not registered for an ABN because they do not have any obligations under the Goods and Services Tax (GST) legislation. For example businesses that have turnover that is under the threshold for registration (currently $75,000) may choose not to apply for an ABN. These businesses have not been identified or quantified and are not included in the counts presented in this release.

The scope for business counts includes some businesses that are yet to be coded by the ATO to an industry, sector and/or geographical area. Analysis conducted on these businesses indicates that, despite not having a complete set of classificatory data, these businesses were actively trading and also met the other scoping criteria of the collection. These actively trading businesses have been grouped together into ‘Currently Unknown’ or ‘No Usual Address’ codes in the data cubes.

Counts for ‘Currently Unknown’ categories are included in the publication for completeness. However entry and exit rates and change percentage involving 'currently unknown' values are not published to ensure administrative changes are not misinterpreted.

Geographical coverage

Counts of businesses in this CABEE release are published at two geographical levels: Australia totals and Main State.

Multi-location businesses

Businesses can operate in more than one geographical location and be represented by a single ABN/TAU. These are referred to as multi-location businesses. For the purposes of this release, multi-location businesses are attributed to one geographical classification to prevent double counting of businesses. While the individual locations of businesses with multiple sites are not available in CABEE, some locations data at the SA1 level are available via the ABS BLADE product.

Main state

For businesses in the non-profiled population, main state is derived from the main business address. The main business address of a business relates to the physical address where the main business activity takes place. For businesses in the profiled population, main state is the state or territory with the highest employment. Therefore, for some businesses in the profiled population, main state is not necessarily the state or territory of the main business address.

Conceptual and practical basis of counts

The following table illustrates how the number of actively trading businesses presented in this ABS statistical release differs from the total number of entities with an Australian Business Number (ABN). For businesses that are within scope of this ABS statistical release, the table also details the number of profiled businesses relative to the number of non-profiled businesses.

 

Download

Derivation of CABEE frame from the Australian Business Register (ABR) (a)

June 2021

 

No. of Units

Total non-cancelled ABNs on the ABR (b)

8,835,423

- ABNs not actively trading in goods and services in Australia (no active GST role or is a GST long term non-remitter (LTNR))

6,238,823

Active ABNs on the Australian Bureau of Statistics Business Register (ABSBR) trading in goods and services

2,596,600

- ABNs which are out of scope of CABEE, including:

  • ABNs linked to complex business structures (profiled population) (c)
  • ABNs not operating in the market sector, i.e. with an out of scope industry (ANZSIC), institutional sector (SISCA) or type of legal organisation (TOLO)

199,397

Total ABNs (non-profiled population) in scope of CABEE

2,397,203

+ Profiled population (Type of Activity Units) in scope of CABEE

5,051

Total count of businesses in scope of CABEE

2,402,254

Reconciliation of CABEE frame from previous year

2020-21

 

No. of units

Count of businesses operating at the start of the financial year (June 2020)

2,314,448

+ Business entries, including:

  • new business registrations,
  • reactivations of cancelled businesses
  • businesses that have recommenced remitting GST
  • a small number of units moving out of the profiled population

365,480

- Business exits, including:

  • businesses that have cancelled their ABN
  • businesses that have ceased remitting GST for an extended period of time
  • businesses where the ABN has changed due to a merger or acquisition
  • a small number of units moving into the profiled population

277,674

Count of businesses operating at the end of the financial year (June 2021)

2,402,254

a.     Please refer to the Scope and Coverage sections of the Methodology for more detailed information.

b.    The ABSBR is updated monthly and data is extracted as close to 30 June as possible. Minor differences in the timing of the CABEE frame contribute to the difference between end of year business counts presented in this release and those published by the ABR.

c.     Businesses on the ABSBR are captured using an economic units model that has two populations; 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. Businesses in the non-profiled population are represented by the ABN as they have simple structures. Businesses in the profiled population have large or complex structures and are represented by a statistical unit known as the Type of Activity Unit (TAU). Refer to the Scope section of the Methodology for more detailed information.

How the data is processed

Time series

This release contains snapshots of counts of actively trading businesses at regular points in time. While data presented in this release were produced on a broadly similar conceptual basis to data presented in previous releases, users seeking to analyse change over time should be aware that there may have been methodological, classificatory, definitional, administrative or content changes between the different releases of CABEE.

Depending on the analysis being undertaken, these changes could adversely affect the comparability of CABEE data over time, and users are advised to consult the History of Changes and Revisions sections of the relevant releases to understand the nature and impact of such changes.

Updates to data

The ABSBR receives updated information when a business entity reports changes to either the ABR or the ATO, such as a new registration, revised classificatory information, or when the business entity reports changes in its business structure or activity. These reporting changes can impact upon the business entity's industry classification (ANZSIC), institutional classification (SISCA), legal classification (TOLO) or geographic classification. These changes to the ABSBR may generate updates to data previously published in earlier editions of CABEE.

Some of the revisions to currently unknown categories are attributable to updated classificatory information, such as ANZSIC, SISCA or geography, where this information did not previously exist for the business entity.

Accuracy

These counts are not subject to sampling error as they represent a complete enumeration of economically active businesses on the ABSBR. However they are subject to non-sampling error and the cyclical administrative workflows of the ATO may also impact on data interpretability. Revisions to data due to non-sampling error or updates to methodology are included as technical notes on the relevant publication, and are available in the History of changes section.

How the data is presented

Business events

Counts of active businesses are compared between consecutive periods to identify business events, such as businesses that are entering and exiting the Australian economy, as well as businesses that continue to survive.

Business entry

For annual data, a business entry is counted when an actively trading business on the ABSBR at 30 June in the reference year, was not actively trading at 30 June the previous year.

For quarterly data, a business entry is counted when an actively trading business on the ABSBR at the end of the reference quarter, was not actively trading at the end of the previous quarter.

Business Entries have been split into 'Business births' and 'Other entries'.

Business births include:

  • new ABN registrations in the Non-Profiled Population; and
  • the creation of new units in the Profiled Population.

 

Other entries include:

  • businesses that were previously cancelled and have re-activated their ABN;
  • businesses that were previously a GST long-term non-remitter and have become active again via BAS lodgement; and
  • businesses that were previously out-of-scope of CABEE, such as those in the non-market sector, or that have now become in-scope due to an industry reclassification.

Business exit

For annual data, a business exit is counted when an actively trading business on the ABSBR at 30 June the previous year is no longer actively trading at 30 June in the reference year.  

For quarterly data, a business exit is counted when an actively trading business on the ABSBR at the end of the previous quarter is no longer actively trading at the end of the reference quarter.  

Business Exits have been split into 'Business cancellations' and 'Other exits'.

Business cancellations include:

  • businesses in the Non-Profiled Population that have cancelled their ABN; and
  • units in the Profiled Population that have ceased.

 

These events typically happen when; a business has closed down, a business has been sold, a business has significantly changed structure, or a business is no longer operating in Australia.

 

Other exits include:

  • an inactive business defined as a long-term non-remitter who has not lodged BAS data for 5 quarters (or 3 years for annual remitters); and
  • a business that was previously in-scope of CABEE that has become out-of-scope, such as those moving to a non-market sector or industry classification.

 

The movement of businesses between the profiled and non-profiled populations are also captured as an exit and corresponding entry, though the numbers involved are usually small.

Intra-period entries and exits

For both annual and quarterly data, it is possible that a business can enter after the end of the previous reference period and exit before the end of the next reference period. These businesses are not included in the counts for the specific reference period.

Intra-period entries and exits are more likely to impact the annual rather than quarterly business counts. They are the main contributing factor for the differences seen between annual entry and exits for the financial year, and the sum of entries and exits from the four quarters that make up the annual period.  For further information see the Technical Note.

Business survival

A surviving business is defined as a business on the ABSBR that is active at the end of the previous reference period and was also active at the end of the next reference period.

Two types of survival tables are published in the annual CABEE datacubes; businesses that were active in the first year captured by this release, and businesses that entered during the first year captured by this release, and have survived to consecutive years.

In the business survival annual data cubes, changes in employment and turnover size ranges are not considered. That is, surviving businesses will remain classified to their original base year classification even when they have expanded or contracted. This is to more accurately reflect the survival rates for businesses in each strata classification.

Net movement of surviving businesses

In the annual data, the movement of businesses between locations, employment sizes and turnover sizes are important characteristics in understanding how businesses grow and change over time. For these point in time variables, businesses are classified according to their size for the respective year for all datacubes and tables, except survival tables.

In the quarterly data, net movement of surviving businesses is calculated for all variables (as they are all point in time). 

The net movement of surviving businesses is calculated by taking the total inflow at the end of the period minus the total outflow at the end of the period. These counts are included in datacubes to quantify the change in counts of businesses within a period which are attributable to the movement of surviving businesses, not entries and exits to a size range.

The inflow at the end of a period is the count of surviving businesses that have moved into one size range (eg. an employment size range) and out of another size range in the period (for employment). This does not include entries and exits.

The outflow is the count of surviving businesses that have moved out of a size range (eg. an employment size range) and into another size range (for employment). This does not include entries and exits.

Employing businesses

A business which employs and pays a salary to (or plans to employ and pay a salary to) one or more persons is required to register an Income Tax Withholding (ITW) role with the ATO. These businesses are required to withhold payments of salaries and wages from their employees and send the amounts to the ATO.

All businesses in the profiled population are considered to be employing businesses, regardless of whether they have an active ITW role. These businesses report employment to the ABS as the number of persons who receive remuneration in wages or salaries (including working proprietors and working partners), or are paid a retainer fee by their employer. TAUs which report an employment count of zero are included in the 1-4 or 1-19 employment categories.

For the non-profiled population, businesses with an active ITW role which have remitted to the ATO at least once in the preceding five quarters (or three years for annual remitters) are considered to be employing businesses. There are a small number of businesses which have an active ITW role for purposes other than withholding amounts from wages and salaries, and therefore have an employee count of zero. These businesses are included in the 1-4 or 1-19 employee categories. Conversely, there are a small number of businesses which do not have an active ITW role, however have an employee count above zero. These businesses are included in the non-employing category.

For all businesses, employment excludes non-salaried directors, volunteers, persons paid by commission only, and self-employed persons such as consultants and contractors.

Annualised employment

An annualised indicator of each business’ employment is published in the annual data. This annualised indicator provides a good representation of the number of employees a business had during the past financial year. It does not however, capture short-term fluctuations.

Annualised employment estimates are derived from payees data reported to the ATO. This data is typically reported after the end of the financial year, with most business updates captured in the August month. Updates can also occur each month as new data is reported by businesses. Because this reporting for the current financial year occurs after the data is extracted for CABEE, the annualised employment for most businesses in CABEE is derived from payees data from the previous financial year. These estimates are used to determine the employment size range of a business.

Point-in-time experimental employment

In response to the COVID-19 pandemic, the ABS has created an experimental point-in-time employment indicator. This indicator, used in both the annual and quarterly CABEE estimates, is derived from Single Touch Payroll (STP) data as the primary input and supplemented with payees information for businesses yet to commence reporting through STP.

This indicator is created monthly using the highest reported payroll jobs for that calendar month. Due to the timeliness of this reporting, data is available very close to the CABEE reference period. For businesses operating at the end of the financial year, STP data from May is used, as this is the closest alignment to the other data extracts used in CABEE. For the quarterly data, STP data for May, August, November and February is used as this also is the closest alignment to the other data extracts used to produce the quarterly data.

Where this data is not available for a business, such as those yet to move to the STP system, data is substituted using the annualised employment indicator derived from ATO Payees data, the source for all businesses in the annual CABEE publication. This annualised indicator is also used for the Profiled Population.

Employees who are made redundant and do not receive ongoing payments, are temporarily stood down without pay, or are on unpaid leave during the employment reference period are not counted as employees in this indicator. Employees who received JobKeeper, paid leave, or other entitlements during the employment reference period are counted as employees due to their ongoing ties to the business.

Comparison with other business counts data

Users comparing data from this release with other ABS data should do so with care, as some other ABS data may exclude non-employing businesses or particular industries or sectors. Further information about the scope and coverage of other ABS releases can be found in the Methodology section of each publication.

Confidentiality

There is a legislative requirement to protect the privacy of businesses and individuals represented in the data published by the ABS. In order to do this, a confidentialisation process has been applied to counts presented in CABEE to ensure no business or individual is able to be identified.

This process is expected to maximise the availability of data without introducing any bias to the counts. It perturbs data in such a way that the data presented at detailed levels will not always be additive. That is, component values will not always sum to the total (both horizontally and vertically) due to perturbation. Each cell is individually perturbed, and the effect on individual cells is minimal.

No data in datacube 1 has been subject to perturbation. Cells in table 3 in the quarterly datacube may have been subject to perturbation with the exclusion of high-level totals. 

Revisions to this release

There are 3 known revisions to this release of CABEE:

  • The first release of annual CABEE data has been brought forward to August 2021. This release will include annual timeseries data for Datacube 1 (excluding turnover information). A second release of annual CABEE data is scheduled in December 2021. This will include more detailed CABEE information (turnover, industry and geographic data), and the interactive maps. Quarterly CABEE experimental datasets will also be released on an ongoing basis within three months of the reference period.  Please refer to the Technical Note for further information on the differences between annual and quarterly data.
  • Since the previous release of CABEE, ANZSIC class 6330 (superannuation funds) has been removed from scope. This has resulted in a reduction in CABEE counts from previous years, and downward revisions to previously published counts from 2017-18 to 2019-20.   Please refer to the Technical Note for further information.
  • Further splits of entries and exits are being introduced into the annual data for the first time as part of this release.  They will be included in the relevant tables in Data Cube 1.  There is no plan to include these splits as part of datacubes 2-11 at this stage.  Please refer to the Technical Note for further information.

History of changes

CABEE 2016-2020

  • In 2020, new employment size range data using an experimental point in time method was published. Two additional tables were included in data cube 1 for comparison. The point in time data includes Single Touch Payroll (STP) information and represents a business' employment at the end of the financial year. Data are not available for years prior to 2019-20, so prior comparison with the new employment data source is not possible. While there is no change to the total number of businesses, nor to the total number of employing or non-employing businesses, there is some difference in numbers of businesses in employment size ranges. For instance, in 2019-20, there are fewer businesses in the 1-4 employees size range, and to a lesser extent in the 5-19 employees size range. There are more in larger size ranges, particularly 20-199 employees.
  • In 2020 there was a change to the BAS Benchmarks methodology, which is used as the turnover data input in CABEE. This change improves the accuracy of turnover imputation for businesses which do not report, or report a $0 value, in a current or adjacent period. Under the old methodology, a business which had previously reported non-zero turnover and has reported a $0 value in the current period would have received an industry median impute. This often resulted in businesses receiving a higher turnover value with imputation than they had reported in previous periods. Under the new methodology, if the same business reported $0 in the current period; or reported $0 in the previous period and has not reported in the current period, it would receive a $0 value for turnover. An industry median impute is now only used when there is no data reported in any recent period for the business. This change in methodology was applied to historic periods captured by this release, that is 2016, 2017, 2018 and 2019, and resulted in a revision to the turnover size range data for these years. Data cannot be compared for previous years as it has not been prepared with the new methodology.
  • In 2020, there were changes to the SISCA classification of some businesses. 173,689 non-profiled businesses and 40 profiled businesses changed SISCA as part of a quality improvement project. As the SISCA of a business in the final year of the publication is applied to the entire publication period, there have been some large changes in SISCA from the 2019 publication to this one. Many businesses have moved from being in the household sector, and other sectors, to being non-financial corporations. Additionally, 538 non-profiled and 26 profiled ANZSICs were changed.
  • In 2020, there was a minor update to LGA boundaries and codes. LGAs coded to 10130 have been amended to 10180 (Armidale Regional) and LGA's coded to 14200 have been amended to 14220 (Inverell (A)).

CABEE 2015-2019

  • In 2019, updated employment data was received for some businesses. This resulted in a revision to the employment size range data previously published for the 2017-18 financial year. Counts by employment size range for 2017-18 in this release of CABEE are considered to be the most accurate and up-to-date.
  • There was a change to the turnover imputation methodology. This affected businesses which had not reported BAS, or had reported a $0 value, and had no recent BAS reporting history. In previous releases, these businesses received an alternate turnover indicator that was derived from other ABSBR data items, such as industry and size. From this release, the alternate indicator is no longer used and these businesses are now assigned a turnover value of $0.

CABEE 2014-2018

  • In 2018, there were updates to local government area (LGA) boundaries and the associated meshblock allocations. For comparability, from CABEE 2014-2018, businesses are allocated to LGA’s based on the updated boundaries for all years within the publication.

CABEE 2013-2017

  • Two new datacubes were added to this release which present counts of businesses by Local Government Area (LGA) by Industry Division by employment and turnover sizes. These are datacubes 10 & 11 respectively.
  • There was a change in the definition of a ‘small business’ used in the Australian Taxation System. Updated turnover size ranges were introduced to CABEE datacubes to reflect this, affecting datacubes 3, 6, 7 and 9. This does not change the raw data, only the strata in which it is presented in the datacubes.

CABEE 2012-2016

  • In 2016 the Australian Statistical Geography Standard (ASGS) was updated to ASGS 2016. From CABEE 2012-2016, businesses are allocated to geographical areas based on the ASGS 2016 for all years within the publication.
  • A new confidentialisation method was implemented in 2012-16 CABEE. The change was made to enhance the current process and utilise existing ABS infrastructure. The confidentialisation process applied maximises the availability of data without introducing any bias to the counts. It perturbs data in such a way that the data presented at detailed levels will not always be additive.

CABEE 2009-2013

  • Datacube 1 was added for this release. It includes tables 1-20 which were previously published in the PDF publication download. From this release, the PDF publication will no longer be created, instead the analysis and information can be found on the website.
  • The methodology used to derive the non-profiled population business counts for employment size changed in 2009-2013 CABEE to provide a more accurate representation of the size of businesses. A more detailed description of the methodology and its effects are described in Improved Employment Range (Technical Note) in 2009-2013 and 2010-2014 CABEE.
  • Prior to this release, the strata classification for all variables were held constant for all years within a publication, specifically the latest available data were used to represent a business for all periods within each release of CABEE. Due to the nature of business growth with respect to employment and turnover, it was identified that the movement between these strata are important characteristics in the classification and movement of businesses. From CABEE 2009-2013, for these two variables, businesses are classified according to the size for the respective year. This change resulted in the addition of Tables 14 & 18 to Datacube 1, and the inclusion of “Net movement of surviving businesses” to tables 13 and 17.

CABEE 2007-2011

  • Two data cubes were added for this release which present counts of businesses by Industry division by Statistical Area Level 2 (SA2) by business size (employment size and annual turnover size ranges). These datacubes replaced those which previously showed counts of businesses by Statistical Division and Statistical Local Area.
  • In June 2010, the ABS implemented a new methodology for identifying annual long term non remitters (LTNRs). These are businesses that have not submitted a Business Activity Statement (BAS) for a defined period of time, and are considered dormant businesses and therefore excluded from the counts. This change has primarily resulted in an increase in business entries, as those businesses who would have previously been excluded have been brought back into scope, and therefore appear as business entries.

Technical note - Entries and exits splits

Further splits of entries and exits are being introduced into the annual data for the first time as part of this release.  They will be included in the relevant tables in Datacube 1.  There is no plan to include these splits as part of Datacubes 2-11 at this stage.

Business Entries have been split into 'Business Births' and 'Other Entries'.

Business Births include:

  • new ABN registrations in the Non-Profiled Population; and
  • the creation of new units in the Profiled Population.

Other Entries include:

  • businesses that were previously cancelled and have re-activated their ABN (resurrections);
  • businesses that were previously a GST long-term non-remitter and have become active again via BAS lodgement; and
  • businesses that were previously out-of-scope of CABEE, such as those in the non-market sector, that have now become in-scope due to an Industry reclassification.

 

Business Exits have been split into 'Business Cancellations' and 'Other Exits'.

Business Cancellations include:

  • businesses in the Non-Profiled Population that have cancelled their ABN; and
  • units in the Profiled Population that have ceased.

These events typically happen when; a business has closed, a business has been sold, a business has significantly changed structure, or a business is no longer operating in Australia.

Other Exits include:

  • an inactive business defined as a long-term non-remitter who has not lodged BAS data for 5 quarters (or 3 years for annual remitters); and
  • businesses that were previously in-scope of CABEE that have become out-of-scope, such as those moving to a non-market sector or industry classification.

 

 

The movement of businesses between the profiled and non-profiled populations are also captured as an exit and corresponding entry. The numbers involved are usually small.

Technical note - Removal of Superannuation Funds (ANZSIC class 6330)

From the 2021 CABEE publication onwards, superannuation funds – consisting of all units in ANZSIC class 6330 – have been removed from scope. This change is in alignment with international guidelines. It will also improve the quality of the publication and serve as a more accurate representation of actively trading businesses in the Australian economy.

In business demography, only statistical units that engage in production activity should be included, and the scope of CABEE is specifically the market sector. Super funds provide retirement benefits to specific groups of people through the ownership and transaction of assets and liabilities.  Super funds are therefore asset vehicles that conduct investment activity rather than being trading businesses.

The change in scope has resulted in a decrease to CABEE business counts across the time series (see table below). The difference is approximately 4.5% of the previously published total business counts in any given year.

Download
Count of Australian Businesses
2017201820192020
Total businesses - CABEE 20202,238,2992,313,2912,375,7532,422,404
Total businesses - CABEE 20212,137,7962,208,4472,268,9982,314,448
Difference Super Funds100,503104,844106,755107,956

The decrease will impact business counts in Division K (Financial and Insurance Services). There will also be noticeable impacts on the number of trusts and financial corporations. All timeseries in the annual and quarterly CABEE data to be released in August 2021 and December 2021 respectively will be adjusted for this change in scope.  Counts from previous publications may not be comparable.

Technical note - Differences between Annual and Quarterly Counts

For the 2021 CABEE publication, quarterly counts of Australian businesses for the 5 quarters ending June 2021, have been made available as a supplementary data cube.

The scope of the quarterly counts – actively trading businesses in the Australian market sector- is the same as the scope of the annual counts. This means the total number of businesses operating at comparable points in time will be identical between the quarterly and annual data cubes. For the 2021 CABEE publication, these comparable points in time are:

  • end of June 2020 quarter and end of 2019-20 financial year; 
  • start of September 2020 quarter and start of 2020-21 financial year; and
  • end of June 2021 quarter and end of 2020-21 financial year.

A key methodological difference between the quarterly and annual counts is the use of backcasting. In the CABEE context, backcasting is the practice of coding the most recent characteristics of a business in all previous periods, even if these characteristics have changed over time. To provide insights into the latest changes, backcasting is not used in the quarterly counts. However, backcasting is used in the annual counts, for selected characteristics - including industry division, institutional sector, and type of legal organisation. This means the quarterly and annual counts for values of these three characteristics may differ for all comparable periods other than the most recent period. This is most noticeable in counts by industry division.

Another key difference is intra period entries and exits.  They are the main contributing factor for the differences seen between annual entries and exits for the 2020-21 financial year, and the sum of entries and exits from the four quarters that make up this annual period. The sum of the 2020-21 quarterly entries and exits exceed the annual entries and exits by 55,695. This is because a business may have:

  • One quarterly entry and one quarterly exit (52,173 businesses for 2020-21), or two quarterly entries and two quarterly exits (71) within the same financial year. For these businesses, neither the entry nor exit will be captured by the annual counts.
  • One quarterly entry and two quarterly exits (1,112) where only the second exit is reflected in the annual counts.
  • Two quarterly entries and one quarterly exit (2,268) where only the second entry is reflected in the annual counts.

Further information on entries and exits can be found in the Technical Note.

Technical note – COVID-19 impacts

Since March 2020, there has been significant impact on the business community as a result of the COVID-19 pandemic. This event has impacted businesses in different ways; some industries have been heavily restricted, for others this has been a period of growth or innovation. Commonwealth and State Governments have supported businesses through a range of policies and programs.

There have been some impacts on the CABEE series as a result of COVID-19. The most significant include:

  • Fewer business exits – In 2020-21 the business exit rate was 12.0% compared to 12.8% in 2019-20. Lower levels of business exits may be influenced by a range of factors, for example: the time it takes for a business to formally close; delays in the reporting process; the government support packages currently available to businesses aimed at mitigating the impact of COVID-19 and supporting economic recovery; businesses pausing temporarily to determine ongoing viability; or an increase in demand and innovation in some industries. This together with an increase in the entry rate, has contributed to the strong growth (3.8%) in Australian businesses in 2020-21. 
  • Businesses re-categorising from non-employing to employing - In 2020-21 employing businesses increased by 118,862 (13.6%) while non-employing businesses decreased by 31,056 (2.2%.). Contributing to this, there was a net movement of 58,209 surviving businesses from non-employing to employing, significantly higher than previous years in the CABEE timeseries.  Re-categorisation of a business from non-employing to employing in CABEE generally occurs when a business registers an Income Tax Withholding (ITW) tax role with the ATO, or a previously inactive ITW tax role becomes active again. In the June quarter 2020 a large movement of businesses from non-employing to employing was observed.  These movements were initially withheld, before being phased in over the course of the year to June 2021, based on evidence of reported wages in Business Activity Statements.
  • Updates to ANZSIC coding – there has been a marked increase in businesses updating their ANZSIC information on the Australian Business Register (ABR) throughout 2020-21. This has contributed to increases in the net movement of surviving businesses between ANZSICs in the quarterly data set table 2 (industry division) and 3 (industry subdivision). Between June quarter 2020 and June quarter 2021, nearly 58% of the ANZSIC changes that crossed ANZSIC subdivision were from Victorian businesses.  

It is also important to note that the impacts of JobKeeper ending in March 2021 and the recent lockdowns in some jurisdictions may take some time to flow through to the CABEE dataset.