Quality Declaration
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GLOSSARY
Enterprise group 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. Freight and cartage expenses Includes pipeline charges, and handling charges and payments to owner/drivers for delivery of minerals. Excludes the cost of delivery by own vehicles and employees, overseas freight and cartage on goods exported, and payments to couriers. Funding from government for operational costs Funding from federal, state and/or local government for operational costs (e.g. wages and salaries, rent, food). Includes bounties, subsidies, export grants, apprenticeship and traineeship schemes, community service obligation, and amounts reimbursed under the Australian Government's Energy Grants (Credits) Scheme. Funding from government for specific capital items Includes capital grants, and low interest or interest free loans made by government to businesses to encourage expenditure on specific equipment (e.g. environmental protection equipment). Gas supply industry Comprises businesses classified to ANZSIC Subdivision 27 and ANZSIC Group 270 Gas supply. This group consists of units mainly engaged in the distribution of gas such as natural gas or liquefied petroleum gas through mains systems. It excludes units mainly engaged in:
Gross fixed capital formation (GFCF) Gross fixed capital formation is measured by the total value of a producer's acquisitions, less disposals, of fixed assets during the reference period, plus certain additions to the value of non-produced assets realised by the productive activity of institutional units. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly or continuously in other processes of production for more than one year. The derivation of GFCF is as follows: Industry value added (IVA) IVA represents the value added by an industry to the intermediate inputs used by the industry. IVA is the measure of the contribution by electricity, gas and water supply businesses to gross domestic product. The derivation of IVA is as follows: However, it should be noted that IVA is a measure of economic activity and is not equivalent to operating profit before tax (OPBT). Wage and salary expenses and most other labour costs are not taken into account in its calculation, and nor are most insurance premiums, interest expenses or depreciation and a number of lesser expenses (see the entry for total expenses for further detail). On the income side, OPBT includes total income whereas IVA only includes sales and service income. The industry value added variable is related to, but different from, the national accounting variable gross value added. For national accounts purposes, gross value added is calculated by adjusting industry value added to include General Government units and to also account for some other effects. Industry value added per person employed IVA of electricity, gas, water and waste services businesses which operated during the year ended 30 June 2007 divided by the number of persons employed by electricity, gas, water and waste services businesses during the last pay period ending in June of that same year. Industry value added to selected labour costs IVA of electricity, gas, water and waste services businesses which operated during the year ended 30 June 2007 divided by their selected labour costs, i.e.industry value added/selected labour costs. Insurance premiums Premiums for fire, general, accident, public liability, optional third-party and comprehensive motor vehicle insurance, professional indemnity insurance, and common law liability. Excludes workers' compensation insurance premiums/costs (included in labour costs), compulsory third party motor vehicle insurance premiums (included in motor vehicle running expenses), and reinsurance premiums paid. Interest coverage The number of times that businesses can meet their interest expenses from their earnings before net interest, tax, depreciation and amortisation (EBITDA) i.e. earnings before interest, tax, depreciation and amortisation / interest expenses. Interest expenses Includes interest paid on loans from banks, finance companies, partners, and related or unrelated businesses, and in respect of finance leases. Also includes interest equivalents such as hedging costs, and expenses associated with discounted bills. Excludes bank charges other than interest, and capital repayments. Interest income Includes interest received from deposits in banks and non-bank financial institutions, loans, advances, finance leases and earnings on discounted bills. Excludes capital payments received, and charges between companies in the same TAU. Intermediate input expenses For details, see the entry for total expenses. Intermediate inputs Intermediate inputs consist of materials and certain services which are used up in the production process. The calculation is: Inventories - opening/closing The value of all inventories of finished goods (including mineral ores), work-in-progress (less progress payments billed), raw materials, fuels and containers at the beginning and end of the reporting period respectively. Investment rate (value added) The proportion of industry value added (IVA) used to acquire capital, i.e. (capital expenditure / IVA) x 100. Motor vehicle running expenses Includes expenditure on registration fees, compulsory third-party insurance premiums, fuel, and repair and maintenance expenses. Excludes expenses for off-road motor vehicles (e.g. fork lifts, mobile plant), and lease payments, optional third party and comprehensive motor vehicle insurance premiums, and depreciation. Natural resource royalties expenses Includes payments under mineral lease arrangements, and resource rent taxes and royalties. Excludes payments for royalties from intellectual property (e.g. patents and copyrights) and expensed computer software licence fees (both of which are included under other operating expenses), and capitalised computer software licence fees (included under capital expenditure). See the entry for total expenses for the definition of other operating expenses. Net capital expenditure The value of total capital expenditure less proceeds received from the disposal of assets. Opening inventories The value of all inventories of finished goods (including mineral ores), work-in-progress (less progress payments billed), raw materials, fuels and containers, at the beginning of the reporting period. Operating profit before tax (OPBT) Profit before extraordinary items are brought to account and prior to the deduction of income tax and appropriations to owners (e.g. dividends paid), i.e. total income - total expenses + change in inventories. Other income Includes natural resource royalties income, dividend income and other income such as net profit (or loss) on the sale of fixed tangible assets, net profit (or loss) resulting from variations in foreign exchange rates/transactions, and funding from federal, state and/or local government for specific capital items. It excludes extraordinary profits or losses, i.e. those not associated with the normal operations of the business and of a non-recurring nature. Other intermediate input expenses Comprises intermediate input expenses less current purchases of goods, materials and services used in production (i.e. excludes any capitalised purchases). Further detail is included in the entry for total expenses. Other selected expenses Includes expenditure on management fees/charges paid to related and unrelated businesses, bank charges other than interest, audit and other accounting expenses, legal fees, advertising expenses, postal and telecommunication expenses, office supplies and printing expenses, travelling, accommodation and entertainment expenses, staff training, payments for royalties from intellectual property (e.g. patents and copyrights), payments to employment agencies for staff, payroll tax, fringe benefits tax, land tax, land rates, and computer software expenses not capitalised. Some of these expense items are treated as intermediate input expenses in the calculation of industry value added. For details, see the entry for total expenses. Profit margin The percentage of sales and service income available as operating profit before tax (OPBT), i.e. (OPBT / sales and service income) x 100. Purchases and selected expenses Purchases of goods and materials, rent, leasing and hiring expenses, freight and cartage expenses, motor vehicle running expenses, repair and maintenance expenses, contract, subcontract and commission expenses, and other selected expenses. Purchases of goods and materials Purchases of materials, components, explosives, containers, packaging materials, fuels, electricity and water, and purchases of other goods for resale (including water for distribution). Also includes capitalised purchases. Excludes purchases of parts and fuels for motor vehicles, but includes fuels for off-road vehicles, such as forklifts and mobile plant. Reference period For each collection year, businesses are asked to report data for the financial year ended 30 June. However, if a business has a different financial year, it is asked to report (apart from employment) for the 12 month period which ends between 1 October of the previous year and 30 September of the current year. This period is then used as a substitute for the financial year ended 30 June. For example, for the 2006-07 collection, a business may have reported data for the year ended 31 December 2006. Rent, leasing and hiring expenses Payments for the rent, leasing and hiring of land, dwellings, other buildings and structures, motor vehicles, plant, machinery and other equipment (including telecommunication equipment). Includes operating lease payments; excludes finance lease payments. Rent, leasing and hiring income For details, see the entry for sales and service income. Repair and maintenance expenses Includes computer and communication software and hardware maintenance, and repair and maintenance of off-road motor vehicles. Excludes wages and salaries of own employees and the repair and maintenance costs of on-road motor vehicles. Sales and service income Includes: Sales of goods
Income from services
Rent, leasing and hiring income
Sales and service income per person employed The value of sales and service income of electricity, gas, water and waste services businesses which operated during the year ended 30 June 2007, divided by the number of persons employed by electricity, gas, water and waste services during the last pay period ending in June of that same year. Selected expenses See the entry for purchases and selected expenses. Selected labour costs See the entry for total expenses. Selected labour costs per person employed The value of selected labour costs paid by electricity, gas, water and waste services businesses which operated during the year ended 30 June 2007, divided by the number of persons employed by electricity, gas, water and waste services businesses during the last pay period ending in June of that same year. Standard Institutional Sector Classification of Australia (SISCA) The SISCA is the central classification among ABS Standard Economic Sector Classifications. It is based on the System of National Accounts 1993 (SNA93) institutional sector classification, and includes the sectors: non-financial corporations, financial corporations, general government, households, non-profit institutions serving households, and rest of the world (which includes only non-resident units, these being excluded from all other sectors). For more information, please refer to Standard Economic Sector Classifications of Australia (SESCA) (cat. no. 1218.0). Superannuation See the entry for employer contributions into superannuation. Total expenses For the purposes of calculating economic and accounting variables, expenses incurred by businesses are divided into several categories. However, some expenses are excluded entirely from all such calculations: excluded are capital repayments, costs associated with the transfer of real estate, dividends, donations, export freight charges, extraordinary losses, foreign exchange losses, goods and services tax (GST), excise and duties payable to governments, income tax and other direct taxes, losses on asset sales, and unrealised gains/losses from revaluations of assets. Those expenses used for calculations are categorised as follows: Intermediate input expenses This category covers the major expenses incurred by businesses in producing and distributing goods and services (except labour costs), and comprises two sub-categories of operating expenses: Purchases of goods, materials and services used in production, which include:
Expenses related to the sale of goods and administrative expenses, which include:
Excluded from intermediate input expenses are selected labour costs and other operating expenses as detailed below: Selected labour costs
Other expenses Some expenses are excluded from the calculation of intermediate input expenses and selected labour costs, but are included in the calculation of the accounting variable operating profit before tax (OPBT). For the Electricity supply and Gas supply industries, these expense items are included in tables 2.1 and 3.1 as: individually listed items:
part of other selected expenses:
For the Water supply, sewerage and drainage services and Waste collection, treatment and disposal services, these items are included in tables 4.1 and 5.1 as: individually listed items
part of cost of sales:
part of other operating expenses:
Total income Comprises sales and service income, interest income, funding from government for operational costs, and other income (for details, see the entries for these items). Trading profit A measure of profit directly attributable to trading in goods and services. It is derived by subtracting the cost of sales from the value of sales and service income. It should not be inferred that all of this profit is available as surplus, as other expenses such as selected labour costs, depreciation, insurance premiums, royalties, bad debts and interest have not been taken into account. Also, other income items such as funding from government and interest income have not been included. Type of activity unit (TAU) The TAU is the statistical unit used by the ABS to represent businesses, and for which statistics are reported, in cases where the ABN unit is not suitable for ABS statistical needs. The TAU comprises 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 (and the TAU is classified to the relevant subdivision of the ANZSIC). Where a business cannot supply adequate data for each industry, a TAU is formed which contains activity in more than one industry subdivision. Wages and salaries The gross wages and salaries (including capitalised wages and salaries) of all employees of the business. The item includes severance, termination and redundancy payments, salaries and fees of directors and executives, retainers and commissions of persons who received a retainer, bonuses, and annual and other types of leave. Provision expenses for employee entitlements (e.g. provisions for annual leave and leave bonus, long service leave, sick leave, and severance, termination and redundancy payments) are also included, as are salary sacrificed earnings and remuneration of employees in the form of share based payments and stock options. (Note that in previous issues of this publication, salary sacrificed earnings and remuneration of employees in the form of share based payments and stock options were reported under related expense items. For example, salary sacrificed for superannuation was included in employer contributions into superannuation.) Payments to self-employed persons such as consultants, contractors and persons paid solely by commission without a retainer are excluded. The drawings of working proprietors are also excluded. Wages and salaries per person employed The value of wages and salaries paid by electricity, gas, water and waste services businesses which operated during the year ended 30 June 2007, divided by the number of persons employed by electricity, gas, water and waste services businesses during the last pay period ending in June of the same year. Waste collection, treatment and disposal services industry Comprises businesses classified to ANZSIC Subdivision 29, which consists of ANZSIC Groups 291 Waste collection services and 292 Waste treatment, disposal and remediation services. Group 291 comprises two classes:
Excluded from Group 291 are:
Group 292 comprises two classes:
Excluded from group 292 are:
Water supply, sewerage and drainage services industry Comprises businesses classified to ANZSIC Subdivision 28 and ANZSIC Group 281 Water supply, sewerage and drainage services. This group comprises two classes:
Workers' compensation premiums/costs Workers' compensation is a compulsory insurance cover to be taken out by all employers, except for self-insured workers, according to legislative schemes to cover employees suffering injury or disease in the course of or arising out of employment. Document Selection These documents will be presented in a new window.
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