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EXPLANATORY NOTES


INTRODUCTION

1 These data are estimates relating to persons whose principal (or main) source of income is from their own unincorporated business(es). The estimates include the number of persons, their income from own unincorporated business and their total income from all sources. This is the last time data will be released in this series only for the main source of income from Own unincorporated business(es). In future data will be provided for all persons receiving any income from this source.

2 These data have been compiled from the Australian Taxation Office (ATO) Individual Income Tax Return Database and are part of the Australian Bureau of Statistics' (ABS) program to increase the range of regional statistics available, particularly through the use of administrative information collected by other government agencies.

3 Data are available for various levels of the Australian Standard Geographical Classification (ASGC), including Statistical Local Areas (SLAs) and Local Government Areas (LGAs), in each state and territory of Australia for the income tax years 2004-05 and 2005-06. The income tax year refers to the financial year ending 30 June.

4 Data for the years 1996-97 to 2003-04 are available in the previous release of this publication, accessible from the Past & Future Releases tab.

5 The ABS wishes to acknowledge the support the ATO has provided in compiling these statistics and in assisting the ABS in its aim to increase the range of regional data available to users of regional statistics. Without such support the wide range of statistics published by the ABS would not be available.


CONFIDENTIALITY

6 All individual income tax statistics provided to the ABS by the ATO are in aggregated form, at the SLA level. Information about individual taxpayers has not been released to the ABS.

7 Prior to being provided to the ABS, the statistics have also been subjected to a confidentiality process that randomly adjusts cells in tables with small values. This includes altering some small cells to zero. Caution should therefore be exercised in deducing that there are no people in an area with certain characteristics and, in general, no reliance should be placed on cells with small values in tables. Applying a confidentiality process to the data prevents the risk of inadvertently releasing any information that may identify an individual while, for most purposes, not impairing the overall information value of the statistics.


SCOPE AND COVERAGE

8 The scope of the statistics presented in these data relate only to persons whose principal (or main) source of income is from own unincorporated business(es). These persons may also have other sources of income.

9 Persons whose principal source of income is from own unincorporated business(es) have been defined as:

• persons aged 15 years and over who have submitted an Individual Income Tax Return and for whom income from their own unincorporated business, or businesses, was the principal (or main) source of their personal income for the financial year.

• net business income (or loss): the amount of income (or loss) derived by the individual from primary and/or non-primary production business activities after deduction of relevant business expenses.
• distribution from partnerships: the individual's share of the partnership's income or loss, less any attributed foreign income or foreign source income of the partnership(s) on which the taxpayer is assessed. Partnerships generally do not pay tax in their own right. Members of the partnership pay tax at their individual tax rate on their share of partnership income included on their individual tax return.
• distribution from trusts (primary production only): the individual's share of the trust's income or loss (for primary production), less any attributed foreign income or foreign source income of the trust on which the taxpayer is assessed, and the whole or part of a net capital gain of the trust on which the taxpayer is assessable.
• net personal services income: the net income received by persons, including contractors and consultants, as a reward for their personal efforts or skills. It applies to persons receiving such income as a sole trader and is calculated by deducting operating expenses from the income generated by the business activity. Examples of personal services income include: income of a professional practitioner in a sole practice; income payable under a contract which is wholly or principally for the labour or services of a person; income derived by a professional sportsperson or entertainer from the exercise of professional skills; and income derived by consultants from the exercise of personal expertise.

• wage and salary (including allowances, earnings, tips and director's fees);
• Commonwealth of Australia government pensions, allowances and other payments;
• superannuation and annuities;
• investments (i.e. aggregate of gross interest, dividends, net rent and distributions from trusts - non-primary production); and
• other income (e.g. foreign source income).

• $10,000 wage and salary income
• $7,000 distribution from partnerships - non-primary production
• $5,000 personal services income (as a sole trader)
• $2,000 dividends, and
• $500 gross interest.

• $10,000 wage and salary income
• $12,000 own unincorporated business income (aggregate of $7,000 distribution from partnerships - non-primary production and $5,000 personal services income (as a sole trader)), and
• $2,500 investment income (aggregate of $2,000 dividends and $500 gross interest).

• Data for 2004-05 has been provided for LGAs, SLAs and other ABS standard boundaries based on 2005 ASGC boundaries.
• Data for 2005-06 has been provided for LGAs, SLAs and other ABS standard boundaries based on 2006 ASGC boundaries.

• in New South Wales, the Statistical Local Area of Tamworth Regional (A) - Part A was created from Parry (A) and part of Tamworth (C), while the Statistical Local Area of Tamworth Regional (A) - Part B was created from part of Barraba (A), all of Manilla (A) and Nundle (A) and part of Parry (A) - Part B
• in Queensland, the Statistical Local Area of Guanaba-Springbrook was created from part of Guanaba-Currumbin Valley and part of Mudgeeraba

• minimises confidentiality restrictions as data are not output for postcodes with small populations;
• enables the data to be more easily compared with standard ABS output;
• enables the data to be output for other standard ABS geographic areas such as Statistical Divisions, Statistical Subdivisions and LGAs; and
• provides flexibility so that data can be provided for the different regions of interest being studied by users of regional data (which are usually groupings of SLAs and/or LGAs).

• in applying the concordances (based on total population only) it is assumed that the particular characteristics of any data item are uniformly distributed across a postcode area and therefore concorded data may not truly reflect the distribution of the characteristics of the population. In some cases, where the same postcode is split across two or more SLAs and there are no other contributing postcodes, distinct numerical estimates will be derived but rates or averages will be identical for each SLA (as these will be equivalent to the original rate or average of the contributing postcode);
• some official postcodes (such as post office boxes, etc.) do not correspond to residential areas but may still have been reported under the current home address field on the income tax return. Data for these and other ‘invalid’ postcodes, such as those due to incorrect reporting or processing errors, have been included in an ‘unknown’ category for each state and territory and for Australia where the state or territory was not known; and
• concorded figures have been rounded so discrepancies may occur between sums of the component items and totals.

• Local Government Area (LGA): These spatial units represent the whole geographical area of responsibility of an incorporated Local Government Council in any state or territory, and Aboriginal or Island Council in Queensland or a Community Government Council in the Northern Territory. The various types of LGAs are Aboriginal councils (AC), areas (A), boroughs (B), cities (C), community government councils (CGC), district councils (DC), island councils (IC), municipalities (M), regional councils (RegC), rural cities (RC), shires (S) and towns (T).
• Statistical Local Area (SLA): These geographical areas are in most cases identical with, or have been formed from a division of, whole LGAs. In other cases, they represent unincorporated areas. In aggregate, SLAs cover the whole of a state or territory without gaps or overlaps. In some cases legal LGAs overlap Statistical Subdivision boundaries and therefore comprise two or three SLAs (Part A, Part B and, if necessary, Part C).
• Statistical Subdivision (SSD): These are of intermediate size, between SLAs and SDs. In aggregate, they cover the whole of Australia without gaps or overlaps. They are defined as socially and economically homogeneous regions characterised by identifiable links between the inhabitants. In the non-urban areas an SSD is characterised by identifiable links between the economic units within the region, under the unifying influence of one or more major towns or cities.
• Statistical Division (SD): These consist of one or more SSDs. The divisions are designed to be relatively homogeneous regions characterised by identifiable social and economic units within the region, under the unifying influence of one or more major towns or cities.
• State and Territory (S/T): These spatial units are political entities with fixed boundaries. States and Territories consist of one or more SDs. In aggregate, they cover Australia without gaps or overlaps.

• personal income tax cuts
• the introduction of new measures such as the 30% child care tax rebate, the 25% entrepreneurs' tax offset, transitional incentives to contribute to superannuation, and
• transition to retirement rule - people aged over 55 can now access superannuation benefits without having to retire or leave their job.

• personal income tax cuts
• introduction of the mature age worker tax offset. Workers aged 55 years and over may be entitled to the offset, based on the amount of income they receive from working.