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Survey Participant Information - Economic Activity Survey - Mining
 

ECONOMIC ACTIVITY SURVEY - MINING


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Employment
Income Items
Expense Items
Inventories
Capital Expenditure and Disposal of Assets
Multi-state operations
Checklist


EMPLOYMENT

How should I report employment?

Employment
is a headcount of all persons who worked for the business as proprietors, partners, salaried directors or other employees in the last pay period in June 2014. It excludes casual or seasonal employees who are on the payroll, but did not work during this pay period. You should report for the last pay period in June 2014 even if this is not the last pay period in your financial reporting year.

Working proprietors and partners (Q3a)

If you are the owner-operator or partner of an unincorporated business, include yourself (and other partners) in Q3a (working proprietors and partners). Owners/directors of Pty Ltd companies should not be counted as working proprietors, but should be included in Q3b (Salaried directors) or Q3c (Other employees).

Other employees (Q3c)

This is a headcount of all persons who worked for the business and were paid through the payroll in the last pay period in June 2014.

What about persons working for the business under contract?

  • Contractors and subcontractors who are other businesses (i.e. have their own ABN and are paid on a fee for service or commission only basis) should not be counted in Employment.
  • If the business paid another business for contract staff, and those persons were on the payroll of the other business, they should not be counted in Employment.
  • Persons employed on a fixed-term contract, e.g. temporary staff/ workforce, should be included in Other employees (Q3c) only if they were paid through the payroll in the last pay period of June 2014 and PAYG tax was deducted for them.
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INCOME ITEMS

Sales of minerals and other goods (Q4) - the difference between sales of goods produced and sales of goods not produced?
What should be reported as income from services (Q5)?
Where to report income from various sources/activities?

What is the difference between Sales of mineral and other goods produced and Sales of goods not produced?

Sales of minerals and other goods produced
(Q4a) should be reported when the business that sells a commodity is the same business which undertook production of the commodity (or had the commodity produced for it by a third party on a contract, sub-contract or commission basis). Examples include income from the sale of:
  • minerals mined or extracted by the business (e.g. coal, gold, oil, natural gas) or for the business by a contracted third party
  • minerals produced by dredging or quarrying
  • recovered ore and tailings.

Sales of the following may also be included:
  • processed raw materials (e.g. smelted aluminium, refined petroleum products);
  • by-products of mining or processing, including recyclable/recoverable waste material;
  • goods manufactured by the business (e.g. smelted products, fuels, structural steel);
  • goods made from parts assembled by the business.

Sales of goods not produced
(Q4b) are those goods which the business purchased ready-made, then resold without making changes to the goods. Wholesale and retail sales of goods should be reported here. For example, income from the sale of coal purchased from a mining enterprise and onsold without processing would be included in Sales of goods not produced. (This includes third party sales, i.e. where a contract to supply goods is fulfilled wholly or in part by goods bought in from a third party.)
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What should be reported as income from services (Q5)?

Generally, payments received for providing mining-related services to other businesses should be reported as income from services. These may include:
  • geological surveying;
  • site preparation;
  • drilling;
  • transportation;
  • waste management.

Services provided on a contract, sub-contract or commission basis, management fees or service charges received from related businesses and delivery charges separately invoiced or itemised to customers should be reported here as income from services.

Rent, leasing and hiring income
is conceptually a service income, but income from this source should be reported in Rent, leasing and hiring income (Q6). The same applies to Royalties income, i.e. report separately in Royalties income (Q9) .

Some equipment, e.g. earthmoving machinery or transport equipment, may be hired either with or without operator/driver. This distinction, sometimes referred to as "wet" and "dry" hire, determines how this type of income should be reported.
  • Where the business derives income from hiring out equipment without operator ("dry" hire), that income should be reported as Rent, leasing and hiring income (Q6);
  • Where the business derives income from hiring out equipment with operator ("wet" hire), the income should be reported as Income from services (Q5).
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Where to report income from various sources/activities?

Although this list is not exhaustive, it does address some of the common reporting problems encountered by businesses.

Asset sales:
The proceeds from the sale of certain assets should be reported in the Disposal of selected assets part of the survey (Q35). The profit or loss from the sale of any assets should be reported in Other Income (Q10) as a positive or negative value.

Asset revaluation/impairment:
should be reported under Other income (Q10) as either a net gain or loss. Negative revaluations and impairments should not be reported as an expense. This follows the same principles that apply to other examples listed in the survey, such as share trading or sales of assets.

Discounts/Rebates received:
Discount or rebates received by a business from its suppliers should not be reported as income, but should be deducted from the expense item to which the discount or rebate applied, e.g. Purchases (Q17).

Export sales (f.o.b):
Where goods are produced or purchased in Australia for sale overseas, income from Sales of minerals and other goods (Q4) should represent the free-on-board (f.o.b.) price of the goods, i.e. a price which may cover the cost of transporting goods to the Australian customs frontier (point of exit from Australia) only, and not the cost of transporting the goods outside Australia. (Note the exclusion of Export freight charges from the concept of Sales of minerals and other goods)

Progress payments billed on long term contracts:
Where a business has entered into a long term contract to supply goods or services, and recognises expenses and progress payments in its accounts, the progress payments should be reported as sales of goods or income from services, depending on the nature of the contract.

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EXPENSE ITEMS

How should I report Labour costs?
How should I report Purchases?
How should I report expenditure on electricity, fuels and water?
What is the difference between 'on-road' and 'off-road' vehicles?
How should I report payments to contractors and other businesses for services?
How should I report repair and maintenance costs?
Where do I report my specific expense item?


How should I report Labour costs?

Payments made to another (related or unrelated) business for the supply of staff on a fee or contract basis, where the staff entitlements are paid by the business supplying the employees, should be recorded in Labour Costs question part (e) Payments to employment agencies for staff (Q12e). Payment to another business for recruitment services (i.e. advertising vacancies, conducting interviews) on behalf of your business should also be included in Payments to employment agencies for staff (Q12e). However, any costs incurred by your business in the conduct of its own recruitment processes (e.g. payment directly to newspapers for running job vacancy advertisements) should be reported in Other operating expenses (Q27).

Labour costs
(Q12) exclude payments to contractors or sub-contractors operating under their own ABN. Information on payments to contractors can be found under How should I report payments to contractors and other businesses for services?

Only include Employer contributions paid into superannuation in Q12a. This does not include personal superannuation contributions for business owners not drawing a wage.

Payroll tax
(Q12d) is levied by State/Territory governments on businesses with large payrolls (usually greater than $0.5 million). It does not refer to income tax withholding for employees.

Wages and salaries including provisions for employee entitlements
(Q12f) - gross (i.e. before tax) wages and salaries should be reported. Capitalised wages and salaries (i.e. wages and salaries for work relating to the creation of capital assets) should not be included at Q12f but instead at Capitalised wages and salaries and purchase of materials for capital work (Q34a).
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How should I report Purchases?

If a commodity is purchased to be used or consumed in the production of goods or services (including office consumables), or for repairs and maintenance of equipment, its cost should be reported as Purchases of materials, components, explosives, containers, packaging materials...(Q17a). If the same commodity is purchased simply to be onsold in the same form (without transformation), its cost should be reported as Purchases of minerals and other goods for resale (without any further processing or assembly) (Q17b). For example, where a business buys coal from a mining business and onsells it (without processing) to an overseas buyer, the coal purchased should be reported as Purchases of minerals and other goods for resale... (Q17b).

Note: In the context of selling minerals and other goods, Purchases (expenses) are not the same as cost of goods sold. Purchases represent the amount actually expended by the business in the reporting period. Cost of goods sold, which is not collected in this survey, represents the amount expended only on goods actually sold in the reporting period. (Cost of goods sold is equal to purchases plus opening inventories minus closing inventories).

Capitalised purchases of materials i.e. purchases made to create capital assets, Should NOT be reported at Q17. Instead these capitalised purchases of materials should be reported at Capitalised expenditure including capitalised work done by own employees (Q33) or Capitalised wages and salaries and purchase of materials for capital work (Q34).
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How should I report expenditure on electricity, fuels and water?

Reporting of expenditure on electricity, fuels and water depends on how the electricity, fuels and water are used by the business, as shown in the following examples.
  1. Petroleum and diesel fuel purchased for onselling at the bowser (i.e. without further processing) - report as Purchases of minerals and other goods for resale...(Q17b).
  2. Petroleum and diesel fuel purchased for use in own on-road transport vehicles - report as Motor vehicle running expenses (Q21).
  3. Fuel purchased for off-road vehicles and mobile plant (e.g. excavators, fork-lifts, rail locomotives, offshore drilling vessels) - include in Purchases of materials, components, explosives, containers and packaging materials, electricity, fuels and water...(Q17a).
  4. Water rates paid - include in Purchases of materials, components, explosives, containers and packaging materials, electricity, fuels and water...(Q17a).
  5. Electricity bills for powering office, plant, etc - include in Purchases of materials, components, explosives, containers and packaging materials, electricity, fuels and water...(Q17a).

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What is the difference between 'on-road' and 'off-road' vehicles?

These terms are used variously in questions relating to Purchases (Q17), Motor vehicle running expenses (Q21) and Repair and maintenance expenses (Q24).

In this context, an 'on-road' vehicle is one which satisfies all three of the following criteria:
  • is powered;
  • is registered for public road use; and
  • is designed primarily for road transport purposes.
Any vehicle failing to satisfy all of the above criteria is considered an 'off-road' vehicle. Any expenses associated with 'off-road' vehicles are not to be included in Motor vehicle running expenses.
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How should I report payments to contractors and other businesses for services?

There are specific questions for:
  • Payments made to contractors and other businesses for freight, cartage, delivery and transport services (Q18) and
  • Other contract, sub-contract and commission expenses (Q25).
All payments to other businesses for non-transport-related services provided (other than on a commission, contract or sub-contract basis) should be reported in Other operating expenses (Q27).

The following examples show how some commonly incurred expenses should be reported.
  1. Postage costs - include in Payments made to contractors and other businesses for freight, cartage, delivery and transport services (Q18).
  2. Payments made to owner-drivers to transport goods sold by your business to customers - include in Outward freight, cartage, delivery and transport expenses (Q18a).
  3. Payments made to a port operator to load goods sold by your business on a ship for export - include in Outward freight, cartage, delivery and transport expenses (Q18a).
  4. Payment made to a courier for pick-up of goods and delivery to your office - include in Other freight, cartage, delivery and transport expenses (Q18b).
  5. Payment of separately invoiced delivery charges to a supplier of goods - include in Other freight, cartage, delivery and transport expenses (Q18b)
  6. Payment of commission to another business for selling goods owned by your business - report as Sales commission expenses (Q25a).
  7. Payment to a construction business to build living quarters at a mine site - include in Other contract, sub-contract and commission expenses (Q25d).
  8. Travel and accommodation expenses for your employees - include in Other operating expenses (Q27).
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How should I report repair and maintenance costs?

This depends on what is repaired or maintained and whether or not repairs and maintenance are performed "in house".

If the cost refers to repair and maintenance of on-road transport vehicles operated by your business, it should be included in Motor vehicle running expenses (Q21).

If the cost refers to repair and maintenance of off-road vehicles, plant or equipment (e.g. machinery, mobile plant, communications equipment, building maintenance), it should be reported as Repair and maintenance expenses (Q24).

In either case, any wages paid to employees of the business for repairs and maintenance work performed by them should not be included in either of the above two items: include the wages for that work in Labour Costs (Q12).
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Where do I report my specific expense item?

Although this list is not exhaustive, it does address some of the common reporting problems encountered by businesses.

Consumables:
Consumables such as stationery, staff amenity supplies, cleaning materials etc. should be reported as Purchases of materials, components, explosives, containers and packaging materials, electricity, fuels and water...(Q17a).

Discounts/Rebates given:
Discounts or rebates given by your business to its customers should not be reported as an expense item, but should be netted off the income item to which the discount/rebate applied, e.g. Sales of minerals and other goods (Q4) or Income from services (Q5).

Equipment hire:
Reporting of this type of expense depends on whether the hire is "wet" or "dry" (i.e. with or without operator). A simple illustration of the distinction is:
  • if the business has paid for the hire of earthmoving equipment to be operated by its own employees ("dry hire"),the expense should be included in Rent, leasing and hiring expenses (Q20); but
  • if the business has paid another business for contracted earthmoving services, i.e. equipment with operator ("wet hire"), the expense should be included in Other contract, subcontract and commission expenses (Q25c or d).

Finance lease payments:
When an asset, e.g. company car, is acquired under a finance lease arrangement, the value of the acquisition should be included in Capital expenditure including capitalised work done by own employees (Q33) in the year of acquisition. Repayments under a finance lease agreement consist of two components: interest and capital repayments. Capital repayments should not be reported in this survey. The interest component only should be included in Interest expenses (Q14).

Motor vehicle insurance premiums:
  • Compulsory third party insurance premiums, payable as part of the vehicle registration process should be included in Motor vehicle running expenses (Q21).
  • Optional third party insurance premiums, payable at the discretion of the business, should be included in Insurance premiums (Q13).

Sponsorship Payments:
Sponsorship is not considered the same as a donation, as it involves a transaction, usually in the form of advertising or promotional benefits for the individual or business making the payment. It should therefore be reported as Other operating expenses (Q27), whereas donations are excluded altogether.

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INVENTORIES

How should I report inventories?


Inventories
(Q32) are divided into three sections; Raw materials, Work-in-progress and Finished goods.

Raw materials
(Q32a) consist of goods that a business holds with the intention of using to produce other goods or in rendering services. For example, iron ore to produce steel (good produced) or raw food to make a restaurant meal (provide a service).

Work-in-progress
(Q32b) consists of goods that still require work to reach the condition they are to be sold in, such as partially assembled machinery. The value of work-in-progress inventories should be reported net of progress payments billed.

Finished goods
(Q32c) consist of goods that are to be sold in their current condition, including goods for resale.

Inventories do not include depreciable assets of the business.

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CAPITAL EXPENDITURE AND DISPOSAL OF ASSETS

How should I report capital expenditure?
What is capitalised work done by own employees?


How should I report capital expenditure?

Capital expenditure refers to the amount spent by a business in the current reporting period on the acquisition of non-current assets. It does not represent the value of asset holdings purchased prior to the current reporting period and does not include additions to inventories. It is reported under Capital expenditure including capitalised work done by own employees (Q33).



What is capitalised work done by own employees?

Capitalised work done by own employees occurs when a business uses its own employees to add to the value of its assets by virtue of project work. Examples include:
  • employees carry out work to build a structure, such as an outbuilding
  • employees carry out work to develop an in-house software inventory control system.

In these cases, the cost of the project - both wages and salaries paid to employees and materials used for the capital work - may be capitalised, so that the cost can be amortised over more than one reporting period.

If the project work relates to a non-current asset, it should be included in the relevant section of the question Capital expenditure including capitalised work done by own employees (Q33). Capitalised work done by own employees should also be reported under the Capitalised wages and salaries (Q34a) and Purchases of materials for capital work (Q34b). That is to say that Capital work done for own use or for rental or lease (Q34c) is a subset of Capital expenditure including capitalised work done by own employees (Q33).

Capitalised wages and salaries and purchases of materials reported at Q33 must only be those that relate to capital works. If they are wages and salaries or purchases relating to the daily operations of the business, they should be reported as an expense item in other relevant parts of the survey.

The following are examples of how some common types of acquisitions should be reported under Capital expenditure including capitalised work done by own employees (Q33). (The value reported should be the purchase price of the asset acquired.)
  1. (Registered) cars, trucks and trailers - in Road Vehicles (Q33a).
  2. Aeroplanes, trains and ships - in Other transport vehicles and equipment: (Q33b).
  3. Excavators, jack hammers, ore crushers and off-road vehicles - in Industrial machinery and equipment (Q33c).
  4. Audio visual equipment, electric lighting or signs, transformers and generators - in Electronic equipment and electrical machinery (Q33f).
  5. Scientific equipment, furniture and fencing - in Other plant and equipment (Q33h).
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MULTI-STATE OPERATIONS

How do I report income from sales of goods and services by state (Q33)

Income from sales of goods and services should align with amounts reported in Questions 4, 5, 6 and 9. It should be reported against the state or territory where the sale was made or the service was provided. For export sales, report against the state or territory from which the sale was made.

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CHECKLIST

The purpose of this checklist is to assist you, if you wish, to check the information which you have supplied in the survey before submitting it to ABS. Use of the checklist may reduce the need for us to contact you with further enquiries. The points covered reflect some of the most common reporting errors.

Employment (Q3)
  • Are the reported numbers a headcount of persons working for the business? (Should not be FTE.)
  • Have you reported only those who worked for the business in the last pay period ending in June 2014? (i.e. Regardless of your reporting period, and not including casual/seasonal employees who did not work during that pay period.)
  • Working proprietors and partners (Q3a) should only be reported for an unincorporated business, not if the business is incorporated (e.g. Pty Ltd).
  • If the business had offices/locations with staff in more than one state or territory, does the total for Australia (Q37) equal Total number of persons in Q3(d)?

Financial information
  • Are all reported financial items reported in $'000s( thousands)? For example, if business income for the year were $123,456, it should be reported as 123 on the survey.
  • Have the nature and amount of the main components of 'Other...' items been provided in Q10 (Other income), Q25d (Other contract, sub-contract and commission expenses), Q27 (Other operating expenses) and Q33h (Capital expenditure - Other plant and equipment)?
  • If income from sales of minerals and other goods produced by the business has been reported (in Q4a), have associated purchases been reported correctly, i.e. as Purchases of materials, components, explosives, containers and packaging materials, electricity, fuels and water...(Q17a)?
  • If income from sales of minerals and other goods not produced by the business has been reported (in Q4b), have associated purchases been reported correctly, i.e. as Purchases of minerals and other goods for resale (Q17b)?
  • Have the values of both opening and closing inventories reported in Q32, where applicable?
  • If Capitalised work done by own employees (in Q34c) is reported, the value must be less than or equal to the sum of Capital expenditure items reported in Q33.

Other information
  • Have you provided comments on any unusual movements regarding the information you have supplied. By taking the opportunity to do this you will enhance the value of the data you supply as well as minimising the chance of ABS staff being required to call you directly for clarification.
  • Have you provided an estimate of the time taken to complete this survey? (Please note that we use the time taken information to help us to design effective surveys while minimising the burden on our providers.)


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