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Introduction This publication presents counts of businesses based on snapshots of actively trading businesses as at June 2003, 2004, 2005 and 2006 from the Australian Bureau of Statistics Business Register. 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. This publication harmonises two previous publications; Australian Bureau of Statistics Business Register, Counts of Businesses (cat. no. 8161.0.55.001) and Experimental Estimates, Entries and Exits of Business Entities, Australia (cat. no. 8160.0.55.001). Those releases used different data sources and definitions. The scope of this release is significantly changed from that used in Counts of Businesses. This release only includes businesses which actively traded in goods or services during the reference period in question. Data Source 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), which is maintained by the Australian Taxation Office (ATO). Information about the ABR can be obtained from the ATO web site <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 also for business counts. Businesses with annual turnover of $50,000 and above and non-profit organisations with annual turnover of $100,000 and above, are required to register for an ABN. Businesses below these thresholds may choose to register for an ABN. Businesses are required to notify the ABR when their registration details change, including if they cease business. Statistical Unit 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 comprise what is called the Australian Tax Office maintained population (ATOMP) and the Australian Bureau of Statistics maintained population (ABSMP). 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. The vast majority of businesses included on the ABS Business Register are in the ATOMP. Most of these businesses have simple structures and the unit registered for an ABN satisfies ABS statistical requirements. For these businesses, the ABS statistical units structure directly aligns with the ABN unit, therefore one ABN equates to one business. 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 ABSMP. This population consists typically of large, complex and diverse groups of businesses. In the ABSMP, a type of activity unit (TAU) equates to one business. 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. The statistical unit referred to as a "business" thus consists of ABNs from the ATOMP and TAUs from the ABSMP. Interpretation of units It is possible for a business entity to register for a single ABN regardless of the number of commercial activities it undertakes. 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. Therefore, caution should be used in equating the number of businesses, represented by ABNs in this publication, with number of business operations. Scope Counts of businesses produced from the ABSBR comprise actively trading businesses in the Australian economy. Actively trading businesses are: Coverage There are businesses which have not registered for an ABN, either because they do not have any obligations under the Goods and Services Taxation (GST) legislation or are under the threshold for registration and have chosen not to register. These businesses may be actively trading but cannot be identified or quantified and so are not included in counts presented in this publication. Comparability with frames for ABS business surveys The basis for business counts in this release is broadly consistent with that for frames used in most ABS business surveys. There are two exceptions to this: Reference Period Counts of businesses provided in the Counts of Australian Businesses including Entries and Exits suite of products are based on snapshots of the ABSBR as at 1 June 2003, 1 June 2004, 1 June 2005 and 1 June 2006 and of changes and continuity between those periods. Business Life Cycle Events This release contains not only snapshots of counts of active businesses at regular points in time but also provides a disaggregation of this count to enable the identification of the flows of businesses into and out of the economy and a measure of the length of time that businesses continue to survive. Business entry and exit counts are restricted to new or ceasing businesses. The counts do not include the establishment of new locations associated with an existing business. Over the course of a business' life cycle it is possible that its characteristics such as industry, employment size or business legal structure may change. However, investigations show that the majority of such changes to characteristics on the ABSBR are the result of previous errors being corrected rather than real world change. For reasons of data comparability and interpretation, changes over time to business characteristics will not be reflected in this publication. Counts of business entries, exits and stock for all referenced periods in this publication reflect the characteristics of the business as at June 2006, in the case of businesses which exited prior to June 2006, the latest available data is used. Entries 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. Included will also be businesses which have previously exited and subsequently recommenced activity under their original ABN and GST role. Also included are a relatively small number of businesses which had ceased remitting but had recommenced remitting by the time of the next reference period. These two instances are termed "reactivations" and both contribute insignificantly to the various counts in this release. Thus, a business entry is defined as a business which is actively trading on the business register at 1 June in the reference year but was either not included or not actively trading at 1 June the previous year. Exits A business exit event is the cancellation of the ABN and/or cessation of remitting GST in respect of that ABN. Thus, a business exit is defined as a business which was actively trading on the business register at 1 June in the previous year but was either not included or not actively trading at 1 June in the reference year. Survivals A surviving business is defined as a business which continues to be active on the ABSBR at 1 June and was also previously active. In this release, two types of survivors are recorded: Businesses who were on the ABSBR at 1 June 2003. Due to the changed basis of the ABSBR, 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 1 June 2004, 2005 or 2006, respectively. Businesses who were entries in 2003-04. That is, they were not actively trading at 1 June 2003 but were on 1 June 2004. The survival of these businesses is measured in terms of whether they were still on the ABSBR at 1 June 2005 or 2006, respectively. Intra-year entries and exits It is possible that a business can enter after 1 June in a given year and exit before 1 June in the following year. An insignificant number of such instances occur in any given year. This release excludes those instances in order to assist interpretation of results. Data Quality The counts in this publication may be 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 businesses in the ATOMP, most classificatory data items reflect information provided to the ATO at the time of ABN registration. The exception is Number of Payees, which is updated annually by the ATO, and turnover, which is based on BAS reporting. In the ABSMP, classificatory data items for the most significant businesses are updated annually. Businesses on the next level of significance are updated biennially. Other businesses in the ABSMP are not routinely updated, but may be updated as a result of ABS survey feedback or other maintenance activity. It is possible that a small proportion of businesses identified as "long term non-remitters" and which are excluded from counts, are in fact still actively trading. It is expected that these units will be identified and re-included in counts in subsequent periods when they recommence active remittance of GST. There is also the possibility that in future the inclusion/exclusion status of specific groups of businesses may change in light of improved identification of business activity. Counts are also subject to revision due to review and correction of classificatory information. Business Size The sizing classifications presented in this release are based on employment and turnover reported by businesses. Employing units are defined as:
§ in the ABSMP, businesses report "employment" defined as the number of persons who work for a public or private employer and receive remuneration in wages or salaries (including working proprietors and working partners), or is paid a retainer fee by his/her employer. Employment excludes non-salaried directors; volunteers; persons paid by commission only; and self employed persons such as consultants and contractors. Turnover is based on data reported to the ATO on Business Activity Statements (BAS) and includes imputation for missing periods. For businesses in the ABSMP, turnover reported on BAS for ABNs is apportioned to the relevant TAUs. Turnover has only been properly estimated for businesses who were on the ABSBR from 1 June 2004. As noted in Paragraph 22, all classifications have been held constant and so businesses on the ABSBR at 1 June 2003 who were also present in later periods have a turnover figure of comparable quality to units who entered in later periods. However, turnover has been imputed for businesses who were present at 1 June 2003 but who exited before 1 June 2004. For most of these businesses, auxiliary information such as employment has allowed imputation of sufficient quality for the purposes of these turnover size ranges. For a small number of businesses, no such auxiliary information was available and so these businesses have been classified at random in accordance with the distribution of businesses which were operating at the start of the 2003-04 financial year. As such, comparisons between years of exits by turnover size should be treated with caution. Main State Businesses can operate in more than one state/territory. For businesses in the ATOMP, Main State is derived from the main business address. For businesses in the ABSMP, Main State is the state or territory with the highest employment. Therefore, for some businesses in the ABSMP, Main State is not necessarily the state or territory of the main business address. Industry Each ABN unit or TAU on the ABSBR has been classified (by the ATO and the ABS respectively) to a single industry class, irrespective of any diversity of activities undertaken. The industry class allocated is the one which provides the main source of income, which is generally based on a description provided by the business. Confidentiality The data presented in tables have been confidentialised to ensure no individual business can be identified. The confidentialising process applied maximises the availability of data without introducing any notable bias to the estimates. Comparison With Other Business Counts Data 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 between surveys, as well as variations due to sampling and non-sampling errors. The definition of employing/non-employing in the ABS can also vary according to collection methodology, data sources, and user requirements and uses. 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. Counts of businesses included in this publication are not comparable with those provided in Australian Bureau of Statistics Business Register, Counts of Businesses (cat. no. 8161.0.55.001, 002 and 003) due to differences in the scope of units included. The primary scope difference between this publication and 8161.0.55.001 is that the latter included all businesses with any one or more non-cancelled tax role. These roles included GST, ITW and ITIP. The scope of counts in this publication only includes businesses which are actively remitting GST. Therefore, entities with only an ITIP or ITW tax role, or which have not remitted GST in the previous 5 quarters are excluded from the counts on the basis that these are not actively trading businesses. Counts of business entries and exits included in this publication are not comparable with those previously released in Experimental Estimates, Entries and Exits of Business Entities (cat. no. 8160.0.55.001). Previous estimates were based on registered ABN units only, not on businesses as defined by the ABS (see Paragraphs 6-10 (Statistical Unit)). Included were all units with any non-cancelled tax role. In addition, cat. no. 8160.0.55.001 separately identified reactivated business entities. A "reactivation'" was a previously identified exit that had subsequently revived its ABN and tax role(s). These reactivated business entities were not considered business entries but were included in stock estimates. In this publication "reactivated" businesses have been included in entry counts in the period in which their ABN again became active and they recommenced remitting GST. For further details see the Explanatory Notes section of the relevant publications. Additional Data Further detailed data (with more detailed industry and size breakdowns) will be available in the extended spreadsheets which will accompany the release of this publication through www.abs.gov.au. Detailed cross-classified data cubes will be available on the ABS web site from April 2007. ABS Data Available on Request As well as the statistics included in this and related publications, the ABS may have other relevant data available on request and for a charge. Inquiries should be made to the ABS National Information and Referral Service on 1300 135 070. Information is also available on-line via a selection of industry-specific theme pages. To access these theme pages, go to the ABS web site home page <www.abs.gov.au>. Open the Industry link shown under THEMES (located in the left-side navigator 'Quick links'), then select one of the links shown under Industry.
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8165.0 - Counts of Australian Businesses, including Entries and Exits, Jun 2003 to Jun 2006
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 26/02/2007
This page last updated 13 December 2007