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EXPLANATORY NOTES


DATA SOURCES

1 The statistics presented in this publication have been compiled from data collected from businesses in the ICT industries survey, in respect of the year ended 30 June 2005. Also included in this publication are:

• import and export data compiled by the ABS from information submitted by exporters, importers or their agents to the Australian Customs Service. Exports include exports of Australian produce and re-exports of goods of foreign origin; and
• data from the ABS Survey of International Trade in Services.

SCOPE

3 The scope of the ICT industries survey is based on a set of goods and services descriptions that are of relevance in the Australian context, and which have been agreed by major policy and industry organisations. The scope for the 2004-05 ICT industries survey draws on, but is not identical to, the currently accepted OECD ICT industries definition. The OECD ICT industries definition includes a wider range of goods and services produced and, consequentially, industries involved in ICT activity.

4 Information in this publication covers the main industries involved in the production and distribution of ICT goods and services in Australia. This industry view draws together a number of standard industries from the Australian and New Zealand Standard Industrial Classification (ANZSIC 1993) that specialise in ICT activity.

5 Within these industries, it is the subset of businesses which specialise in ICT which are the prime interest, and therefore the main focus of the statistics in this publication. The Recorded media manufacturing and publishing industry (ANZSIC 2430) is included in a separate chapter of the publication, because it undertakes ICT activity in Australia, but is not within the wider OECD definition of industries.

6 The scope of the 2004-05 ICT industries survey was all employing businesses recorded on the ABS Business Register (ABSBR) and classified to the following ANZSIC (1993) classes:

• Class 2841, Computer and business machine manufacturing
• Class 2842, Telecommunication, broadcasting and transceiving equipment manufacturing
• Class 2849, Electronic equipment manufacturing n.e.c.
• Class 2852, Electric cable and wire manufacturing
• Class 4613, Computer wholesaling
• Class 4614, Business machine wholesaling n.e.c.
• Class 4615, Electrical and electronic equipment wholesaling n.e.c.
• Class 7120, Telecommunication services
• Class 7831, Data processing services
• Class 7832, Information storage and retrieval services
• Class 7833, Computer maintenance services and
• Class 7834, Computer consultancy services.

COVERAGE

8 The frame for the ICTIS survey, like most ABS economic collections, is taken from the ABS Business Register. The register provides a list of employing businesses, primarily based on registrations to the Australian Taxation Office's (ATO) Pay As You Go Withholding (PAYGW) scheme. The frame is updated quarterly to take account of new businesses, businesses which have ceased employing, changes in employment levels, changes in industry and other general business changes. Businesses which have ceased employing are identified when the ATO cancels their Australian Business Number (ABN) and/or PAYGW registration. In addition, businesses with less than 50 employees which did not remit under the PAYGW scheme in each of the previous five quarters are removed from the frame. The estimates in this publication include an allowance for the time it takes a newly registered business to get on the survey frame. There were approximately 30,000 businesses in-scope of the ICT industries survey on the ABSBR in June 2005 when the survey sample was taken.

CHANGES TO THE ABS BUSINESS REGISTER

9 The introduction of The New Tax System (TNTS) has a number of significant implications for ABS business statistics. These are discussed in Information Paper, Improvements in ABS Economic Statistics [Arising from the New Tax System] (cat. no. 1372.0). The replacement of the Group Employer registration process by PAYGW registration resulted in a number of changes to most business survey frames. The changes included the statistical units model; update of industry for some businesses by the ATO; and availability of different measures of business size.

STATISTICAL UNITS DEFINED ON THE ABS BUSINESS REGISTER

10 The ABS uses an economic statistics units model on the ABS Business Register to describe the characteristics of businesses, and the structural relationships between businesses. The units model is also used to break groups of related businesses into relatively homogenous components that can provide data to the ABS.

11 In mid 2002, to better use the information available as a result of TNTS, the ABS changed its economic statistics units model. The new units model allocates businesses to two sub-populations. The vast majority of businesses are in what is called the ATO Maintained Population, while the remaining businesses are in the ABS Maintained Population. Together, these two sub-populations make up the ABS Business Register population.

ATO MAINTAINED POPULATION

12 Most businesses and organisations in Australia need to obtain an ABN, and are then included on the ATO Australian Business Register. Most of these businesses have simple structures; therefore the unit registered for an ABN will satisfy ABS statistical requirements. For these businesses, the ABS has aligned its statistical units structure with the ABN unit. The businesses with simple structures constitute the ATO Maintained Population, and the ABN unit is used as the statistical unit.

ABS MAINTAINED POPULATION

13 For the population of businesses where the ABN unit is not suitable for ABS statistical requirements, the ABS maintains its own units structure through direct contact with the business. These businesses constitute the ABS maintained population. This population consists typically of large, complex and diverse businesses. The statistical units model described 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: An institutional unit comprising: (i) a single legal entity or business entity, or (ii) 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 Standard Institutional Sector Classification of Australia 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 are available, a TAU is created which covers all the operations within an industry sub-division (and the TAU is classified to the relevant sub-division 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 sub-division. Where a TAU has significant activity in more than one industry, the ABS will 'split' the TAU to maintain industry homogeneity.

INDUSTRY CLASSIFICATION USED FOR OUTPUT PURPOSES

15 The ICT industries survey includes all employing businesses on ABSBR that are classified to in-scope industries. The ANZSIC recorded for the business on the ABSBR is only used for the purposes of survey selection. An alternative ANZSIC based on sources of income reported on the survey form is derived for the purposes of output. This may result in differences between industry data published for the in-scope industries in this publication and industry data that may be published in other ABS publications such as Australian Industry (cat. no. 8155.0) or Manufacturing Industry, Australia (cat. no. 8211.0).

16 The updating of the industry classification from the ANZSIC allocated to the selected unit on the ABSBR to an ANZSIC based on sources of income has an impact on data quality. Based on information received from businesses, 18.3% of businesses selected were made out of scope of the ICT industries survey. A further 20.6% of businesses selected were still in-scope but were found to belong to a different ANZSIC class within the ICT industry groupings. The impact of this on the estimates has been to increase the sampling variability. For more information about the impact of sampling variability on the estimates, please refer to the Technical note.

17 No attempt is made to adjust for businesses on the ABSBR who are classified to an ANZSIC class not within the scope of the ICT industry survey but which would be in-scope based on their sources of income. The impact of this on estimates is unknown.

ICT SPECIALISTS

18 Businesses contributing to estimates in this publication are classified as either ICT specialists or non-specialists. All businesses in the: Computer services and Telecommunication services industry groupings; and the Telecommunication, broadcasting and transceiving equipment manufacturing and Computer wholesaling industry classes were classified as ICT Specialists. Businesses in the remaining industry classes were classified as ICT specialists if 50% or more of their income was derived from ICT activity.

COMPARISONS WITH OTHER ABS STATISTICS

19 Annual industry data for the ANZSIC classes in-scope of the ICT industries survey are published in Australian Industry (cat. no. 8155.0) and Manufacturing Industry, Australia (cat. no. 8221.0). There are important differences between the statistics published in the Australian Industry, Manufacturing Industry, Australia and Information and Communication Technology publications and users should exercise caution when making comparisons between these estimates. The 2004-05 editions of these publications are expected to be released in late 2006.

20 The Information and Communication Technology publication supplements the annual industry summary statistics with a detailed examination of the structure and performance of businesses involved in selected ICT industries for the reference year of the survey.

21 One reason the three sets of estimates vary relates to the use of different industry coding practices. For the Australian Industry and Manufacturing Industry, Australia publications, businesses are coded to ANZSIC industry classes on the basis of the activity reported to the ATO when they registered for an ABN, or for more complex businesses, information reported directly to the ABS (see paragraph 13). On the other hand, ICT industries survey estimates for industry classes are based on detailed income data reported in the survey.

22 Other differences in results relate to further scope and coverage variations between the three surveys. Non-employing units are included in the scope of the range of statistical collections that contribute to estimates published in Australian Industry, and the Manufacturing industry collection (from 2001-02) but are generally excluded from the ICT industries survey.

STATE AND TERRITORY DATA

23 Data were collected from the Australia-wide operations of each organisation. Businesses which operated in more than one state or territory were asked to provide a dissection of total employment and wages and salaries to enable state and territory statistics to be compiled and comparisons undertaken.

COMPARISONS WITH PREVIOUS STATISTICS

24 A range of quality improvements were implemented for 2004-05 ICT industries survey including:

• Collection of more detailed sources of income data for some industries;
• Improvements to procedures used for verifying data collected from businesses selected in the survey;
• Improvements to procedures used to classify businesses to ANZSIC classes for output purposes; and
• A more efficient sample design, reducing the number of businesses that needed to by surveyed.

26 The compilation of import, export and re-export data presented in Table 3.1 has also changed. The list of ICT goods and services used in 2004-05 was based on the OECD definition (Organisation for Economic Co-operation and Development 2005, Guide to Measuring the Information Society, OECD, Paris) and differed to the 2002-03 list of goods and services. Import, export and re-export data compiled using the OECD definition for previous years may be available on request.

RELATED PUBLICATIONS

27 The most recent issue of other ABS publications on the use and production of information and communication technologies in Australia are listed below:

Business Use of Information Technology, Australia, 2004-05 (cat. no. 8129.0)
Household Use of Information Technology, Australia, 2004-05 (cat. no. 8146.0)
Government Technology, Australia, 2002-03 (cat. no. 8119.0)
Internet Activity, Australia, March 2005 (cat. no. 8153.0)
Use of Information Technology on Farms, Australia, 2004-05 (cat. no. 8150.0)

ROUNDING

29 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 unrounded estimates and may be different from, but are more accurate than, calculations based on the rounded estimates.