Australian Bureau of Statistics

Rate the ABS website
ABS Home > Statistics > By Release Date
8165.0 - Counts of Australian Businesses, including Entries and Exits, Jun 2008 to Jun 2012 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 21/05/2013   
   Page tools: Print Print Page Print all pages in this productPrint All RSS Feed RSS Bookmark and Share Search this Product

EXPLANATORY NOTES


INTRODUCTION

1 This publication presents counts of businesses based on snapshots of actively trading businesses as at June 2008, 2009, 2010, 2011, and 2012 from the Australian Bureau of Statistics Business Register (ABSBR). This publication contains counts and rates of business entries and exits from the Australian economy as well as counts and rates pertaining to the survival of businesses.

2 The scope of Counts of Australian Businesses, including Entries and Exits (CABEE), June 2008 to June 2012 (cat. no. 8165.0) is significantly different to previously released (and discontinued) ABS business counts publications. In particular, this publication only includes businesses which actively traded in goods or services during the reference period in question, whereas the scope of some previous releases focused on different populations. Refer to section entitled 'Scope' and 'Appendix 1 ABS Businesses Counts' for further information.

3 The following Explanatory Notes contain further information about the collection methods used in compiling CABEE. This includes information about the data source, Australian Business Register (ABR) used and processes or transformations which have been applied to the data.


DATA SOURCE

4 Most businesses in Australia need to obtain an Australian Business Number (ABN). These businesses are then included on the whole of government register of businesses, the Australian Business Register (ABR). The results of these studies are based, in part, on tax data supplied by the Australian Tax Office (ATO) under the Taxation Administration Act 1953 and ABR data supplied by the Registrar under A New Tax System (Australian Business Number) Act 1999. The Taxation Administration Act 1953 requires that such data is only used for the purpose of administering the Census and Statistics Act 1905 and the Australian Business Number Act 1999 requires that such data is only used for the purpose of carrying out functions of the ABS. Further information about the two Acts can be found at <www.comlaw.gov.au>. Information about the ABR can be obtained from the ABR website <www.abr.gov.au> or the ATO website <www.ato.gov.au/business>. The ABS uses information from the ABR to populate its internal register of businesses, the Australian Bureau of Statistics Business Register (ABSBR), which is used as a source for business survey frames and business counts.

5 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 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.


STATISTICAL UNIT

6 In mid 2002, the ABS commenced sourcing its register information from the ABR and at that time changed its business register to a two population model. The two populations are known as the Profiled population and the Non profiled population, formerly known as the Australian Bureau of Statistics maintained population (ABSMP) and the ATO maintained population (ATOMP). 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.

7 The vast majority of businesses included on the ABSBR are in the Non profiled population. Most of these businesses are understood to have simple structures. After some system processes are applied to the unit registered for an ABN, the resulting statistical unit is a good approximation satisfying ABS statistical requirements. For these businesses, the ABS statistical units structure directly aligns with the ABN unit: one ABN equates to one business.

8 For a relatively 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, complex, and diverse groups of businesses. In the Profiled population, a type of activity unit (TAU) equates to one business.

9 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 subdivision. Where a business cannot supply adequate information for each industry, a TAU is formed which contains activity in more than one industry subdivision. These TAUs are classified according to the industry subdivision of the main activity. TAUs may have operations in one or more states/territories.

10 The statistical unit referred to as a 'business' thus consists of ABNs from the Non profiled population and TAUs from the Profiled population. For a comprehensive definition of a business, refer to the publication's Glossary.


SCOPE

11 Counts of businesses produced from the ABSBR are comprised of actively trading businesses in the Australian economy. Actively trading businesses are:

  • TAUs from the Profiled population (where activity is monitored by direct contact by ABS); and
  • ABNs from the Non profiled population which are actively remitting in respect of a Goods and Services Tax (GST) role.

12 Limiting the scope to only businesses with a GST role means that only entities which are actively trading in goods or services are included. Businesses which 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.

13 Units contained on the ABSBR have been allocated within the following classifications:
  • Standard Institutional Sector Classification of Australia (SISCA) 2008;
  • Type of Legal Organisation (TOLO); and
  • Australian and New Zealand Industry Classification (ANZSIC) 2006.

14 Entities which are not considered to be actively trading in the market sector are not considered to be businesses and, as such, are excluded from the business counts.

15 Entities classified to the following categories of SISCA are excluded:
  • 2110 Reserve Bank of Australia;
  • 3000 General Government;
  • 5000 Not For Profit Institutions Serving Households; and
  • 6000 Rest of the World.

16 Entities classified to the following TOLO categories are excluded:
  • 12 Charitable Institution;
  • 15 Social and Sporting Clubs;
  • 16 Trade Unions and Other Associations;
  • 20 Other Unincorporated Entity;
  • 41 Diplomatic or Trade Missions; and
  • 42 Other Foreign Government.

17 Entities classified to the following 4 digit ANZSIC classes are excluded:
  • 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 Household for Own Use; and
  • 9603 Undifferentiated Service Producing Activities of Private Household for Own Use.

18 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). This focuses the business counts in these divisions on private sector activity only.

19 Most unincorporated entities (known as Sole Proprietors/Traders) are included in the 'Households' sector. An unincorporated entity is an entity which has not become a corporation under the Corporation Act 2001. Unincorporated entities can choose to remain 'unincorporated', where by the business does not possess a separate legal identity to that of its owner, or it can choose the limited liability status of a company where the business assets are legally separate to that of the owners. Some unincorporated businesses are excluded from CABEE because these are operated/controlled by other SISCA categories such as General Government or the Not for Profit Institutions Serving Household (NPISH) sectors which are out of scope of CABEE.

20 In addition, the scope for business counts includes those businesses that are yet to be coded by the ATO to an industry, sector and/or main State of operation through the Australian Business Register (ABR) new business registration process. Analysis conducted on these businesses indicates that, despite not having a complete set of characteristics data, these businesses were actively trading and also met the other scoping criteria of the collection (refer to the 'Conceptual and Practical Basis for Counts' section for further details). It was therefore considered appropriate that they be included within scope of CABEE.

21 These actively trading businesses have been grouped together into 'currently unknown' codes in the publication tables and the forthcoming data cubes. The inclusion of these businesses in CABEE provides a more accurate annual snapshot of businesses that are actively trading in the Australian economy.

22 It should be noted that in June 2010, the ABS implemented a new methodology for identifying annual long term non–remitters (LTNRs). For annual remitters, this LTNR period has been increased from 5 consecutive quarters to 3 consecutive years. This administrative change has resulted in a noticeable and identifiable increase in the business counts at June 2010. More specifically, it has led to 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. For example, the entries for 2008–09 are 299,123. This then spikes to 342,753 in 2009–10, and reverts to 294,210 in 2010–11. Further investigations reveal that an estimated 20,909 of these 2010 entries can be attributed to the new LTNR methodology, and the majority are clustered in the 'Non–employing' size category. They are also clustered in the Households category of Standard Institutional Sector Classification of Australia (SISCA) and the Sole Proprietor and Partnerships categories of Type of Legal Organisation (TOLO). As such, users should exercise care when interpreting the 2010 business counts. This change in LTNR methodology has resulted in a more accurate count of active businesses, particularly in the small business sector.


COVERAGE

23 There are actively trading businesses which have not registered for an ABN, either because they do not have any obligations under the Goods and Services Tax (GST) legislation or are under the threshold for registration and have chosen not to register. These businesses have not been identified or quantified and are not included in counts presented in this publication.


COMPARABILITY WITH FRAMES FOR ABS BUSINESS SURVEYS

24 The basis for business counts in this release is broadly consistent with that used for frames in most ABS business surveys. There are two exceptions to this:
  • the scope with regard to industry, sector, or type of legal organisation can vary according to the requirements of the survey. In some cases, classifications excluded from these business counts are included in a survey frame in order to more comprehensively measure a particular part of the economy. Other survey frames may only include a subset of these classifications such as excluding businesses with invalid ANZSIC codes. Most frames currently include 'Employing' businesses only; and
  • most survey frames include entities with a tax role to withhold income tax from their employees (ITW role) but without (GST role). There are approximately 47,000 such entities. Investigations indicate that units with an ITW role but no GST role are likely to be part of a complex business structure. Such entities are excluded from these counts as they are not considered to be actively trading in goods and services. For business surveys designed to, amongst other things, provide estimates of wages and salaries paid (irrespective of whether the entity is actively trading or not), it is important that these entities are included on frames.


REFERENCE PERIOD

25 Counts of businesses provided in the CABEE suite of products are based on annual (financial year) snapshots of the ABSBR from 30 June 2008 to 30 June 2012 (inclusive) and also reflect changes and continuity between those periods.


TIME SERIES

26 The data presented in this publication were produced on a similar conceptual basis to the data included in previous publications. In terms of time series, at an aggregate level, data comparability is considered high between this and previous publications. Refer to the section entitled 'Scope' for further information.

27 However, users should exercise caution when comparing geographical data between this publication and publications released prior to the June 2007 to June 2011 publication. The ABS has implemented a new geographical framework, namely the Australian Statistical Geography Standard (ASGS). With the move to the new geography framework, both National data and State based data will remain unchanged. Refer to section entitled 'ASGS' for further information.

28 Users should also exercise caution when making data comparisons between this publication and previous publications containing ANZSIC 1993 industry detail and annual turnover size ranges which will not be directly comparable with the data included in this publication.


BUSINESS EVENTS

29 This release contains snapshots of counts of active businesses at regular points in time. These data also assist in providing a point in time 'snapshot' of those businesses that are entering and exiting the Australian economy, as well as those businesses that continue to survive. For further information, refer to the publication's Technical Note.

30 Business entry and exit counts are restricted to new or ceasing businesses. In particular, entries do not include the establishment of new locations associated with an existing business.


ENTRIES

31 A business entry event is the registration of a new business for an ABN and the allocation of a GST role, or the allocation of a GST role to an existing ABN which previously did not have this role.

32 This also includes businesses which had:
  • their ABN or GST role cancelled and subsequently recommenced activity under their original ABN and GST role; or
  • ceased remitting BAS for at least five consecutive quarters (or three consecutive years for annual remitters) but had recommenced remitting prior to the next reference period.

33 Thus, a business entry is defined as a business which is actively trading on the business register at 30 June in the reference year but was not actively trading at 30 June the previous year.


EXITS

34 A business exit event is the cancellation of a business' ABN or GST role and/or when a business ceases to remit GST for at least five consecutive quarters in respect of that ABN (or 3 consecutive years for annual remitters).

35 Thus, a business exit is defined as a business which was actively trading on the business register at 30 June in the previous year but was not actively trading at 30 June in the reference year.

36 It is important to note that a business exit event does not necessarily equate to a business 'failure'. There may be a number of other reasons why a business exit event has occurred, including events relating to selling a business (e.g. due to an owner/operator retiring), and events relating to changes in a business' structure (e.g. due to merger or takeover activities), etc. Such events may result in one or more business exit events occurring, and in some cases, no net loss of businesses.


SURVIVALS

37 A surviving business is defined as a business which is active on the ABSBR at 30 June of the current year and was also active in the previous year. In this release, two types of survivors are recorded:
  • businesses that were on the ABSBR at 30 June 2008. Due to the changed basis of the ABSBR in 2003, the ABS has determined that it is not feasible to ascertain the age of these businesses. The survival of these businesses is measured in terms of whether they were still on the ABSBR at 30 June 2009, 30 June 2010, 30 June 2011, and 30 June 2012; and
  • businesses that were entries in 2008–09. That is, they were not on the ABSBR at 30 June 2008 but were on 30 June 2009. The survival of these businesses is measured in terms of whether they were still on the ABSBR at 30 June 2010, 30 June 2011, and 30 June 2012.

38 One of the enhancements to the business counts data in recent publications involves the provision of data which indicates the growth of business survivals (in terms of employment and annual turnover classifications) over time. For further information, refer to the publication's Technical Note.


INTRA–YEAR ENTRIES AND EXITS

39 It is possible that a business can enter after 30 June in a given year and exit before 30 June in the following year. A small number of these instances occur in any given year. This release excludes those instances in order to assist interpretation of results.


DATA QUALITY

40 The counts in this publication are subject to non sampling error and the cyclical administrative workflows of the ATO may impact on data interpretability. The counts are not subject to sampling error as they represent a complete enumeration of those 'economically active' businesses on the ABSBR. For further information on this, and other likely sources of error in this release, refer to the Quality Declaration associated with CABEE.


A COMPREHENSIVE COUNT OF ALL ECONOMICALLY ACTIVE ENTITIES

41 Ideally, the ABS would capture all economically active entities in Australia. These would then be split by actively trading businesses and other entities. However, it is not possible to accurately capture all such entities at this stage as there are a number of options open to these entities with regard to registration or participation in the tax system using existing data sources. Only partial coverage of these entities is possible using existing data sources and it is not possible to quantify the extent of this partial coverage.


INDUSTRY

42 Each business (either an ABN unit or TAU on the ABSBR) has been classified to a single ANZSIC 2006 industry class, irrespective of any diversity of activities undertaken. 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.

43 For further information on ANZSIC 2006, users may wish to consult the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (cat. no. 1292.0) on the ABS website <www.abs.gov.au>.


ASGS AUSTRALIAN STATISTICAL GEOGRAPHY STANDARD (ASGS)

44 The ASGS is the new geographical framework used by the ABS. It brings together all regions for which the ABS publishes statistics within the one framework and has been used for the collection and dissemination of geographically classified statistics since 1 July 2011.

45 The ASGS replaces the Australian Standard Geographical Classification (ASGC), which is no longer produced. While there are superficial similarities between the ASGS and the ASGC, it is important to recognise that the two are fundamentally different and there are significant differences between their respective regions, both in their geographical extent and their conceptual foundation. As a whole, the ASGS represents a more comprehensive, flexible and consistent way of defining Australia's statistical geography than the ASGC. For further information to assist users move from the ASGC to the ASGS refer to the ABS website <www.abs.gov.au/geography>.

46 With the move to the new geography framework, State based data remains unchanged. However sub State data is now produced using the new ASGS. In terms of business counts data, the base unit of the ASGS will be the Statistical Area Level 2 (SA2). This SA2 data replaces the previously published Statistical Local Area (SLA) business counts data. Refer to section entitled 'Statistical Area Level 2' for further information.


MAIN STATE

47 Businesses can operate in more than one State or Territory. For businesses in the Non profiled population, Main State is derived from the main business address. 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.

48 The Australian taxation system provides flexibility during the new business registration process, as it allows businesses operating in single or multiple States or Territories to register on the ABR and report taxation obligations in a variety of ways. For instance, it is possible for a business entity to register for a single ABN regardless of the number of commercial activities it undertakes (sometimes visible in the number of physical shopfronts it may operate from). Alternatively, multiple commercial activities of a single business enterprise may be registered for separate ABNs, depending on the legal structure adopted by the enterprise. Hence, where commercial activities are carried out by a number of different but related entities, each entity may register for a separate ABN. As this publication defines a business on the basis of an ABN (or TAU in the Profiled population), the counts may be regarded as providing partial coverage of businesses in a given State. For further information, refer to the data quality declaration associated with CABEE.


Statistical Area Level 2

49 The SA2 is a general purpose spatial unit. It is the base spatial unit used to disseminate ABS business counts data, and replaces the previous SLA. In aggregate, 2,214 SA2s cover the whole of Australia without gaps or overlaps. Further, SA2 data can be aggregated to larger geographical areas, including SA3, SA4, and States/Territories, as part of the ASGS.

50 Sub State level data cubes will be released using SA2 as the base spatial unit. For further information to assist users with the transition from the ASGC to the ASGS refer to the ABS website at <www.abs.gov.au/geography>.

51 The issues of geocoding multi location business locations are more pronounced for count data at the SA2 level, as multi location businesses (i.e. in respect of businesses registered under a single ABN/TAU) will only be attributed to a single SA2. As such, care should be taken not to assume that business counts at the SA2 level reflect all business operations within that SA2. For further information, refer to the data quality declaration associated with CABEE.


BUSINESS SIZE

52 The sizing classifications presented in this release are based on employment and turnover reported by businesses, as defined below. The Technical Note contains additional information on business size and how business growth is represented.


EMPLOYMENT SIZE

53 The methods used to quantify employment in this release are based on 'headcounts' of employees. However, different methodologies are applied depending on where (i.e. in which population) businesses reside in the ABSBR.

54 The technical definition of employing units depends upon whether the unit resides in the Profiled or Non profiled population. Employing units are defined as:
  • Profiled population – businesses with greater than zero employees; and
  • Non profiled population – businesses with a non cancelled ITW role and which have remitted to the ATO at least once in the preceding five quarters (or three years for annual remitters). This may include a small number of businesses which have ITW roles for purposes other than withholding amounts from wages and salaries, and as such have zero employment.

55 In the Profiled population, businesses report 'employment' as defined by the number of persons who are employed by a public or private employer and receive remuneration in wages or salaries (including working proprietors and working partners), or are paid a retainer fee by their employer. Employment excludes non salaried directors, volunteers, persons paid by commission only, and self employed persons such as consultants and contractors. These data are collected through direct contact with businesses in the Profiled population and reflect a 'point in time headcount' of current employees.

56 In the Non profiled population, ABS indirectly collects employment data through Payment Summary information supplied by the ATO. This data provides an initial indication of employment for statistical purposes, i.e. a headcount of employees. Businesses report 'number of payees', which is defined as the estimated number of individuals to whom payments are made. This will reflect the total number of persons employed by the business 'throughout the year' rather than an estimate of current employees at a point in time. Payments to people under a voluntary agreement or labour hire arrangement are excluded.

57 The employment data extracted from the ABSBR are generally suitable for the purposes of attributing an employment size classification to each in scope business. During processing of the 2008–09 financial year data, a subset of problem units were identified. Approximately 14,000 units had unusually high values for employment numbers. In response, the ABS developed a more robust methodology to ensure all businesses were classified to an employment size range which reflected real world activity. This involved examining the reported employment values of business which were known to be affected by recent changes to the ABSBR and imputing values as appropriate based on auxiliary data. Specifically, historical employment data and BAS annual turnover data were used to develop a better quality imputation. This methodology is considered suitable for the purposes of classifying businesses into relatively broad employment size ranges.


ANNUAL TURNOVER SIZE

58 Annual turnover values are based on data reported to the ATO through Business Activity Statements (BASs) and includes imputation for missing periods for all businesses in the Non profiled population. For businesses in the Profiled population, turnover reported on BAS for ABNs is aggregated to Enterprise (EN) level and is apportioned to the relevant TAUs.

59 Where businesses report zero values on their BAS or have failed to report at all, these data are compared with auxiliary BAS data, which are then used for the purposes of assigning annual turnover values for each in scope business. In cases where auxiliary BAS data are not available, an imputation based on auxiliary ABSBR data (including wages and salaries and employment data) is used.

60 The imputation technique described therefore classifies all in scope businesses to a single annual turnover size range in CABEE.


Revisions

61 The ABS Business Register receives updated information when a business entity reports changes to the ATO, such as a new registration, revised payee 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); geographic classifications (State/Territory); or business size (Employment or Turnover categories). These changes to the register generate minor revisions to data previously published in earlier editions of CABEE. These revisions are between zero and 5% in this June 2008 to June 2012 CABEE release with the following exceptions:

62 2008–09 Entries (annual turnover size ranges)
  • Zero to less than $50k (8.8%);
  • $50k to less than $200k (–11.54%); and
  • $200k to less than $2m (6.5%).

63 2009–10 Exits (annual turnover size range)
  • $50k to less than $200k (–5.7%).

64 Some of the revisions to 'Currently Unknown' categories are attributable to updated classificatory information, such as ANZSIC, SISCA or TOLO, where this information did not previously exist for the business entity. Revisions to the 'Currently Unknown' category can be more substantial as new information comes to hand from the ATO, with the largest magnitude of change being a decrease of 25% in Table 1 for 2010–11.


Confidentiality

65 The confidentialising process applied is expected to maximise the availability of data without introducing any bias to the estimates.

66 There have been some enhancements to the confidentiality methodology applied in this release. The confidentiality process will round data in such a way that the data presented at these detailed levels will not always be additive. That is, opening stock from the beginning of the financial year, plus entries, minus exits, may not be equal the closing stock for the end of the financial year. This is due to the fact that each of those components are individually rounded.


COMPARISON WITH OTHER BUSINESS COUNTS DATA

67 Estimates of the number of businesses operating in the Australian economy may be derived from a number of sources within the ABS or from non ABS sources. They may relate to a point in time, or may be average annual data. These estimates will not always show the same results. Variations occur because of the differing data sources, differing definitions of a business, differing scope and coverage as well as variations due to sampling and non sampling errors.

68 The definition of Employing/Non–employing in the ABS can also vary according to collection methodology, data sources, and user requirements.

69 Users comparing data from this publication with other ABS data should do so with care, as some other ABS publications may exclude 'Non–employing' businesses or particular industries or sectors.

70 For further details see the Explanatory Notes section of the relevant publications.


PREVIOUS RELEASES

71 Information regarding previous releases of CABEE may be accessed on the ABS website <www.abs.gov.au>.


NEXT RELEASE

72 The next release of CABEE is currently scheduled for release in March 2014.


Bookmark and Share. Opens in a new window

© Commonwealth of Australia 2014

Unless otherwise noted, content on this website is licensed under a Creative Commons Attribution 2.5 Australia Licence together with any terms, conditions and exclusions as set out in the website Copyright notice. For permission to do anything beyond the scope of this licence and copyright terms contact us.