EXPLANATORY NOTES
INTRODUCTION
1 This article provides an analysis of the characteristics and international trading activities of Australian exporters in 2005-06. Although the ABS has released a series of articles on the number and characteristics of Australian exporters covering the 2001-02, 2002-03 and 2003-04 reference periods care should be exercised when comparing these previous estimates with 2005-06 data. The reasons for this break in series are outlined in paragraphs 2 and 3.
2 Estimates relating to exporters of merchandise goods are compiled from data sourced from the Australian Customs Service (Customs) and from the Australian Taxation Office (ATO) Australian Business Register. The methodology used to derive numbers of goods exporters has recently changed and estimates for 2005-06 cannot be compared to previous years. More details about this revised methodology are contained in the feature article New Methodology for Deriving Counts of Australian Exporters, issued on 7 April 2006.
3 Estimates relating to exporters of services are derived from the ABS Survey of International Trade in Services (SITS). The coverage of SITS was improved during 2005-06 with the identified population of businesses exporting and/or importing services increasing from 3,299 to 4,615. Of these, 2,513 were identified as active exporters in 2005-06. For more information about these changes please refer to Changes to International Trade in Services Statistics, August 2006 released with the August 2006 issue of International Trade in Goods and Services (cat. no. 5368.0).
WHAT IS AN EXPORTER?
4 An exporter is defined as the owner of the exported good or the provider of the exported service. Using balance of payments principles, if an export takes place, it must involve a resident selling something to a non-resident i.e. it involves a change of ownership from an Australian resident to a non-resident. International trade in services statistics are compiled on balance of payments principles and only cover transactions between Australian residents and non-residents.
5 Information on exporters of goods is compiled from merchandise trade statistics and are usually, but not always, consistent with balance of payments principles. In a small number of cases a non-resident may own the goods at the time of departure. As there would have been a transaction between an Australian resident and a non-resident prior to the goods physically leaving Australia, it is assumed, for the purpose of these statistics, that all owners of goods at the time of their export are Australian residents and are therefore included in the counts of exporters.
6 There are a number of situations that impact on the interpretation of the count and characteristics of exporters including:
- Exports of goods excludes export consignments with a value of less than $2,000. Prior to July 2002 exports of goods excluded individual transaction lines (within an export consignment) with a value of less than $500.
- Australian businesses that sell goods or services to other Australian businesses which undertake the exporting function are excluded, for example:
- many agricultural products are exported from Australia by wholesalers (such as commodity marketing boards) rather than by the producer
- a principal consultant may export a consultancy service which comprises the work of a number of Australian sub-consultants
- a business may export a product which is assembled from components made by a number of Australian businesses.
- Some analysts include the individual businesses providing commodities, components, other goods or services for export in their definition of 'exporters' or at least consider them to be involved in export-related activity. However, unless the businesses actually own the goods or provide the service at the time of export, they are not included in the ABS count of exporters.
- Service exporters include businesses which provide services from their Australian base to consumers offshore, i.e. supply modes 1 and 4 in the classification used by the World Trade Organisation. However, smaller and/or occasional exporters are unlikely to come to ABS notice and are therefore not included in the estimates. The number of excluded businesses may be significant, but the value of their exports is not thought to be appreciable in the totality of service exports. The ABS continues to try to identify these businesses and incorporate them into its estimates.
- Service exporters exclude businesses that only supply goods or services to foreign tourists or students in Australia (supply mode 2), such as hotels, restaurants, retail, tourist facilities, transport, theatres, educational institutions, etc. In concept these businesses should be included in counts of exporters. However, estimates of these services are compiled from information obtained from the consumers of these services rather than from the businesses providing the services.
- Goods and services exporters exclude Australian-owned businesses located overseas supplying goods or services in or from the country in which they are located (supply mode 3 and usually called foreign affiliates trade), because their trade does not directly contribute to Australia's exports of goods and services.
7 Apart from the exclusions mentioned above, businesses which export goods or services in a particular year are counted as exporters regardless of the value or frequency of their exports. Table 1 and table 2 in this article present the number of exporters by a range of export values, and table 2 presents exporter counts by the frequency of export transactions in 2005-06. This information could be analysed when considering issues such as the identification of businesses with an export focus.
CHARACTERISTICS INFORMATION OBTAINED FROM THE ABR
8 To help readers interpret data on the number and characteristics of exporters, the Australian Business Number (ABN) is used to obtain selected information on businesses from the Australian Taxation Office Australian Business Register (ABR).
9 The information obtained from the ABR includes:
- industry of the business based on the Australian and New Zealand Standard Industry Classification (ANZSIC)
- main state of business location, based on main business address or state with the highest employment
- states in which the business is located
- number of payees and Goods and Services Tax (GST) turnover range. These indicators are used in determining the size of the business.
10 The following issues should be considered when interpreting information from the ABR about exporters:
- information may have been valid when a business initially registered to the ABR but may not have been subsequently updated following changes, like establishing a new location in another state;
- a business may have more than one ABN and the ABN quoted on export documentation may be the ABN of a part of the business not actually producing the exports. As a result, characteristics obtained from the ABR (eg. the main state or the industry of the business) could relate to a corporate head office;
- a business located in a particular state may export goods produced in different states.
11 The characteristics listed above can not be obtained for exporting businesses without an ABN.
12 The ABS is developing a business longitudinal database that will provide a better basis for analysing information about the characteristics of businesses. It is anticipated that for the small and medium sized businesses, the business longitudinal database will provide the opportunity to compare the characteristics of exporting and non-exporting businesses engaged in similar activities. Further information on the business longitudinal database can be obtained from Ashley Bartlett by emailing <ashley.bartlett@abs.gov.au> or by phoning (02) 6252 5402.
BUSINESS SIZE
13 Exporter counts are presented by business size. The ABS discussed the size classification to be used for counts of businesses in the information paper, A Statistical View of Counts of Businesses in Australia, 2005 (cat. no. 8161.0). The size classification recommended in that information paper only used number of payees. Despite this, additional criteria have been added for the purpose of the exporter data to cover businesses with large value domestic and/or export sales but relatively few employees. This non-standard definition has been retained to maintain consistency with previous articles and because it caters for exporters that do not have an ABN or have more complex structures, e.g. the ABN reported on the export documentation may not be same as the ABN used for employment purposes.
14 The criteria are:
- small businesses - having fewer than 20 payees and estimated annual GST turnover range less than $1m and exports of less than $1m during the reference period
- large businesses - having 200 or more payees or estimated annual GST turnover range of $20m or more or exports of $20m or more during the reference period
- medium businesses - all businesses other than those defined as small or large.
CHARACTERISTICS OBTAINED FROM EXPORT DOCUMENTATION
15 The following information can be obtained or derived from export documentation for all goods exporters including those without an ABN:
- value of exports
- state of origin of the commodity
- industry of origin of the commodity.
16 The state of origin of the commodity recorded on export documentation can be used to identify the state from which the exported goods were sourced. State of origin is the state in which the final stage of production or manufacture occurs. Determining a single state of origin is difficult when there may be several stages in the manufacturing process, each of which may take place in a different state. For example, fruit may be grown in one state, canned in another, and exported from another.
17 The industry of origin of the commodity is derived by linking each statistical code in the Australian Harmonised Export Commodity Classification (AHECC) to an ANZSIC industry based on the primary activities of the industries with which they are most commonly associated. These are the industries most likely to have produced the exported goods. Industry of origin of the commodity is a different concept from the industry of businesses recorded on the ABR. While each AHECC statistical code is allocated to one primary industry of origin, commodities can be produced and/or exported by businesses classified to a number of industries.
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