EXPLANATORY NOTES


OVERVIEW

1 This publication presents counts of Australian business operators sourced from the 2007 Forms of Employment Survey and the 2006 Census of Population and Housing..

2 The Census and the Forms of Employment Survey are fundamentally different statistical collections (i.e. one is a census and the other is a survey). The Census relies on Australian households to self-report information on Census Night, whereas data collected through the Forms of Employment Survey are directly collected by trained ABS interviewers. In addition, there are a range of concepts and methodologies particular to each collection. It is therefore important to separately discuss these and other issues, with specific reference to their use in Counts of Australian Business Operators.

3 The Explanatory Notes which follow have therefore been separated into two parts. Part A describes data sourced from the 2007 Forms of Employment Survey. Part B describes data sourced from the 2006 Census of Population and Housing.


PART A:

4 Data Sourced from the 2007 Forms of Employment Survey


INTRODUCTION

5 The statistics presented in Section One of this publication were compiled using data collected from the 2007 Forms of Employment Survey. The Forms of Employment Survey was conducted throughout Australia in November 2007 as a supplement to the Monthly Labour Force Survey. Respondents to the Monthly Labour Force Survey who fell within the scope of the supplementary survey were asked further questions.

6 In addition to the information presented in these Explanatory Notes, the publication Labour Force, Australia (cat. no. 6202.0) contains information about survey design, sample redesign, scope, coverage and population benchmarks relevant to the monthly Labour Force Survey, which also apply to supplementary surveys. It also contains definitions of demographic and labour force characteristics, and information about telephone interviewing which are relevant to both the monthly Labour Force Survey and supplementary surveys.


CONCEPTS, SOURCES AND METHODS

7 The conceptual framework used in Australia's LFS aligns closely with the standards and guidelines set out in Resolutions of the International Conference of Labour Statisticians. Descriptions of the underlying concepts and structure of Australia's labour force statistics, and the sources and methods used in compiling these estimates, are presented in Labour Statistics: Concepts, Sources and Methods (cat. no. 6102.0.55.001) which is available on the ABS web site <https://www.abs.gov.au> (Methods, Classifications, Concepts and Standards).

8 In addition to the LFS conceptual framework outlined above, the Forms of Employment Survey uses an employment type conceptual framework, which classifies jobholders to an employment type category on the basis of their main job, that is, the job in which the most hours are usually worked. This framework also allows data presented in Counts of Australian Business Operators to be split between business operators and non-business operators.


SCOPE

9 The Monthly Labour Force Survey is restricted to people aged fifteen years and over and excludes the following people:

• members of the permanent defence forces;
• certain diplomatic personnel of overseas governments, customarily excluded from the census and estimated populations;
• overseas residents in Australia; and
• members of non-Australian defence forces (and their dependants).
• Students at boarding schools, patients in hospitals, residents of homes (e.g. retirement homes, homes for people with disabilities), and inmates of prisons are excluded from all supplementary surveys.

10 The Forms of Employment Supplementary Survey is used to further refine this population. The Forms of Employment Supplementary Survey was conducted in both urban and rural areas in all states and territories, but excluded approximately 120,000 people living in very remote parts of Australia which would otherwise have been within the scope of the survey. The exclusion of these people will have only a minor impact on any aggregate estimates produced for individual states and territories, except the Northern Territory where such people account for approximately 23% of the population.

11 This survey was restricted to employed people aged fifteen years and over who were not contributing family workers in their main job. Questions were asked about employment arrangements in the main job of all employed people.

12 For the purposes of the data included in Section One of this publication, the business operator population comprises all owner managers of incorporated and unincorporated businesses. It excludes persons who are classified to other types of employment status categories [e.g. persons such as employees who do not own businesses (excluding owner managers of incorporated enterprises) and contributing family workers].

13 Non-business operators comprise employed persons not owning their own business and contributing family workers. It excludes business operators as well as those persons who are also excluded from the scope of the Monthly Labour Force Survey and/or Forms of Employment Survey (as described above).


COVERAGE

14 The estimates in this publication relate to people covered by the Forms of Employment Survey in November 2007. In the Monthly Labour Force Survey, coverage rules are applied which aim to ensure that each person is associated with only one dwelling and hence has only one chance of selection in the survey: See Labour Force, Australia (cat. no. 6202.0) for more details.


REFERENCE PERIOD

15 The statistics included in Section One of Counts of Australian Business Operators and sourced from the Forms of Employment Survey were collected throughout Australia in November 2007 as a supplementary to the Monthly Labour Force Survey.


COLLECTION FREQUENCY

16 The Forms of Employment Survey has been collected since August 1998, approximately every three years.

17 Please refer to the sections below entitled "Previous Surveys" and "Next Surveys" for further information about previous and future releases and how these will impact on future releases of Counts of Australian Business Operators.


SAMPLE SIZE

18 Users should note the issues associated with sample size which impact on the estimates in Section One of Australian Business Operators and sourced from the 2007 Forms of Employment Survey.

19 Supplementary surveys (such as the Forms of Employment Survey) are not always conducted on the full Monthly Labour Force Survey sample. Since August 1994 the sample for supplementary surveys has been restricted to no more than seven-eighths of the Monthly Labour Force Survey sample.

20 The initial sample for the November 2007 Monthly Labour Force Survey consisted of 41,091 private dwelling households and special dwelling units. Of the 33,521 private dwelling households and special dwelling units that remained in the survey after sample loss (i.e. one-eighths of the households included in the Monthly LFS sample and those households selected in the survey which had no residents in scope for the Monthly Labour Force Survey, vacant or derelict dwellings and dwellings under construction), approximately 31,934 or 95% were fully responding the Forms of Employment Survey. The number of completed interviews obtained from these private dwelling households and special dwelling units (after taking into account scope, coverage and sub sampling exclusions) was 33,932.


RELIABILITY OF THE ESTIMATES

21 Estimates in this publication are subject to sampling and non-sampling errors:

22 Sampling error is the difference between the published estimate and the value that would have been produced if all dwellings had been included in the survey. For more information please refer to the Technical Note.

23 Non-sampling errors are inaccuracies that occur because of imperfections in reporting by respondents and interviewers and errors made in coding and processing data. These inaccuracies may occur in any enumeration, whether it be a full count or a sample. Every effort is made to reduce the non-sampling error to a minimum by careful design of questionnaires, intensive training and supervision of interviewers and effective processing procedures.


SEASONAL FACTORS

24 The estimates in Section One of Counts of Australian Business Operators are based on information collected in the November 2007 Forms of Employment Survey, and, due to seasonal factors, may not be representative of other months of the year.


CLASSIFICATIONS

25 Counts of Australian Business Operators utilises a range of classifications which are also used in the Forms of Employment Survey. The Forms of Employment Survey uses Australian Standard Classifications where available and appropriate.

26 For example, country of birth data are classified according to the Standard Australian Classification of Countries (SACC), 1998 (cat. no. 1269.0). Occupation data are classified according to the ANZSCO - Australian and New Zealand Standard Classification of Occupations, First Edition, 2006 (cat. no. 1220.0). Industry data are classified according to the ANZSIC - Australian and New Zealand Standard Industrial Classification, 2006 (cat. no. 1292.0).


NOTES ON ESTIMATES

27 In 2007, only owner managers of incorporated enterprises (OMIEs) and owner managers of unincorporated enterprises (OMUEs), were asked if they worked on a contract basis. Employees (excluding OMIEs) were asked if they worked on a fixed-term contract. In 2006, all employed people including OMIEs and OMUEs, were asked if they worked on a contract basis. Users, therefore, need to exercise care when comparing the number of people who worked on a contract basis with previous releases of data in the Forms of Employment Survey.


CONFIDENTIALITY

28 The data presented in Section One have been confidentialised to ensure no single individual can be identified. The confidentialising process applied maximises the availability of data without introducing bias to the estimates.


COMPARABILITY OF TIME SERIES

29 This is the first release of Counts of Australian Business Operators. As such, time-series analysis is not possible and users should exercise caution making comparisons with previous sources of ABS business operators data. However, data pertaining to owner managers of incorporated and unincorporated businesses are available through the Forms of Employment and other ABS Labour Force Surveys.

30 The degree of comparability between data presented in Section One of Counts of Australian Business Operators and the 2007 Forms of Employment Survey is high. This is mainly due to the way in which the business operator population has been defined (i.e. these data are primarily an aggregation of owner managers of incorporated and unincorporated business data, as sourced from the 2007 Forms of Employment Survey). Please refer to the section of the Explanatory Notes entitled "Scope" for further information. As such, users may refer to the 2007 Forms of Employment Survey for additional information regarding the business operators or owner managers of Australian businesses.

31 Whilst Forms of Employment Survey data are considered a suitable source from which to derive counts of Australian business operators, it should be noted that the Forms of Employment Survey forms part of the suite of ABS' Monthly Labour Force Supplementary (sample) Surveys, and as such, is subject to sampling and non-sampling error.

32 It is also important to note that the main function of ABS' Monthly Labour Force Surveys (including the Forms of Employment Survey) is not to collect information on business operators, but is instead focussed on developing high quality estimates of employment and unemployment.

33 Given these conceptual and methodological limitations of Forms of Employment Survey data, care has been taken to present the data at relatively broad levels so as to minimise the potential impact of the conceptual and methodological influences described above.


COMPARABILITY WITH MONTHLY LABOUR FORCE STATISTICS

34 Due to difference in the scope and sample size of the Forms of Employment Survey (which impacts on estimates included in this publication) and that of the Monthly Labour Force Survey, the estimation procedure may lead to some small variations between estimates provided in Section One of Counts of Australian Business Operators and those from the Monthly Labour Force Survey.


COMPARABILITY WITH THE CENSUS OF POPULATION AND HOUSING

35 When comparing ABS Labour Force data (including the data presented in Counts of Australian Business Operators) with Census data, users should be aware of the issue of Census undercount. For further information, please refer to the paper entitled Census of Population and Housing - Undercount, 2006 (cat. no. 2940.0).


PREVIOUS SURVEYS

36 This is the first release of Counts of Australian Business Operators, as such, there are no previous surveys.

37 The Forms of Employment Survey was first conducted in August 1998 then in November 2001, November 2004 and November 2006. Results of previous surveys on employment arrangement have been published in: Forms of Employment, Australia (cat. no. 6359.0) Employment Arrangements and Superannuation, Australia (cat. no. 6361.0)


NEXT SURVEY

38 The ABS plans to conduct the Forms of Employment Survey again in November 2008 and annually thereafter.

39 The next release of Counts of Australian Business Operators is currently scheduled for release during the 2012/13 financial year. These data are expected to source data from the latest available Forms of Employment Survey data.


PART B:

40 Data Sourced from the 2006 Census of Population and Housing


INTRODUCTION

41 The statistics presented in Section Two of this publication were compiled using data collected from the 2006 Census of Population and Housing. The Census is conducted every five years and collects a range of demographic, social and economic information from all people and dwellings (excluding diplomatic personnel and dwellings) in Australia on Census Night.


CONCEPTUAL FRAMEWORK

42 The concepts, sources and methods underpinning the data presented in Section One of this publication are guided by the conceptual framework used to collect the Census.

43 The Census is the largest statistical collection undertaken by the ABS. The Census has two broad objectives. The first of these is to accurately measure the number and key characteristics of people in Australia on Census Night and the dwellings in which they live. The second is to provide timely, high quality and relevant data for small geographic areas and small population groups, to complement the rich but broad level data provided by ABS surveys.

44 The 2006 Census Form included questions which allowed ABS to collect data on those Australians who operated businesses, including small businesses. When matched with data derived from other questions on the 2006 Census Form, this allows ABS to produce business operators data for a range of characteristics.

45 The conceptual basis of the Census topics included in Section Two of this publication are discussed in further detail in The Census Dictionary (cat. no. 2901.0). The Dictionary is a comprehensive reference guide designed to assist users of 2006 Census data to determine and specify their data requirements and to understand the concepts underlying Census data. The Dictionary also provides background information about classifications, a topic index, mnemonic index and data release index for ease of reference, as well as a section on Census data quality.


SCOPE

46 The Census is restricted to all persons and dwellings in Australia and the external Territories of Christmas Island and Cocos (Keeling) islands on Census Night excluding diplomats, their families and diplomatic dwellings, and visitors from overseas who are not required to undergo migration formalities, such as foreign crews on ships. For the purpose of this analysis, we have excluded persons under the age of fifteen, overseas visitors and those persons who provided insufficient information on their Census Form to be included in the business operator population.

47 The business operator population is a subset of this population. Specifically, the business operator population comprises all owner managers of incorporated and unincorporated businesses. It excludes persons who are classified to other types of employment status categories [e.g. persons such as employees who do not own businesses (excluding owner managers of incorporated enterprises), contributing family workers, persons not in the labour force, and the unemployed].

48 Non-business operators comprise employees who do not own businesses and contributing family workers. It excludes business operators as well as persons who were not in the labour force or who were unemployed.

49 In order to produce data on the respective business operator and non-business operator populations, the Census Form was structured such that persons aged fifteen years or more were asked if they had a full or part-time job at any time in the week leading up to the Census. Those persons indicating they did, were then asked if they worked for an employer or in their own business in the "main job held last week" (i.e. the job where the person usually works the most hours).

50 Persons indicating they worked in their own business were then asked if the business was incorporated or unincorporated. These people were also asked whether the business employed people. Responses were classified according to how many people were employed by the business. It is this question about employee numbers which allows ABS to produce data about small business operators.

51 Persons aged fifteen years or more were also asked a series of other questions pertaining to their individual characteristics, such as their occupation, industry, income, place of usual residence and Indigenous status on the Census Form. This allows ABS to match individual business operator and non-business operator records so that data across a wide range of these characteristics can be included in Counts of Australian Business Operators.

52 Persons who provided insufficient information on their Census Form were excluded from the business operator population. Analysis revealed that this adjustment caused minimal change to the proportions being derived from the Census.


CLASSIFICATIONS

53 Counts of Australian Business Operators utilises a range of classifications which are also used in the Census. Specifically, Australian Standard Classifications are used where available and appropriate. Examples of these are the Australian Standard Classification of Occupations (ASCO) and the Standard Australian Classification of Countries (SACC). These classifications are used as the basis on which to build Census-specific classifications such as Birthplace of Individual (which uses SACC).

54 Classifications such as these are reviewed on an irregular basis to reflect changes in the Australian social environment. Where an Australian Standard Classification is not available, classifications specific to Census variables have been developed.


REFERENCE PERIOD

55 The Census was conducted on the night of 8 August, 2006.


COLLECTION FREQUENCY

56 The Census is collected every five years. This practice became mandatory following the 1961 Census, which saw the amendment to the Census and Statistics Act, 1977 (Cth) requiring that "the census shall be taken in the year 1981 and in every fifth year thereafter, and at such other times as prescribed".

57 Please refer to the sections below entitled "Previous Census" and "Next Census" for further information about previous and future releases and how these will impact on future releases of Counts of Australian Business Operators.


RELIABILITY OF THE ESTIMATES

58 The Australian Census is self-enumerated. This means that householders are required to complete the Census form themselves, rather than having the help of a Census Collector. The Census form may be completed by one household member on behalf of others. Error can be introduced if the respondent does not understand the question, or does not know the correct information about other household members. Self-enumeration carries the risk that wrong answers could be given, either intentionally or unintentionally.

59 The data presented in Section Two of this publication may be subject to non-sampling error.

60 These data are not subject to sampling error as the data represents a complete enumeration of those persons who identified themselves as a business operator. However, users should be aware of the issue of undercount which impacts on Census (estimated at approximately 2.5%).

61 It should be noted that the issue of undercount in the 2006 Census is not an issue particular to the production of business operator counts. It is an issue which relates to Census data per se, and can be associated with the scope, coverage, timing, measurement of underlying concepts and methodologies used in the 2006 Census. ABS has published an article which examines these issues in more detail.

62 For further information, please refer to the paper entitled Census of Population and Housing - Undercount, 2006 (cat. no. 2940.0).


CONFIDENTIALITY

63 The data presented in Counts of Australian Business Operators have been confidentialised to ensure no single individual can be identified. The confidentialising process applied maximises the availability of data without introducing any bias to the estimates.


COMPARABILITY OF TIME SERIES

64 This is the first release of Counts of Australian Business Operators. As such, time-series analysis is not possible and users should exercise caution when making comparisons with previous ABS business operators data.

65 Data are however available for a wide range of topics from current and previous Census, much of which may be accessed directly from the ABS website <www.abs.gov.au>. Users are advised to investigate the comparability of data items over time. A useful resource for these purposes is the Census Dictionary (cat. no. 2901.0).


COMPARABILITY WITH MONTHLY LABOUR FORCE STATISTICS

66 The data presented in Section Two of this publication have been confronted with data from a range of Monthly Labour Force Surveys. In most cases, the proportions presented in this publication are broadly comparable with data derived from these surveys. However, users are advised to exercise caution when making data comparisons, and in particular, should consider the scope of each survey before making any comparisons.

67 Users are also reminded of the issue of undercount which impacts on Census estimates. For further information, please refer to the paper entitled Census of Population and Housing - Undercount, 2006 (cat. no. 2940.0).


PREVIOUS CENSUS

68 Information regarding previous Census may be accessed through the ABS website <www.abs.gov.au>.


NEXT CENSUS

69 The next Census of Population and Housing will be conducted in 2011.

70 The next release of Counts of Australian Business Operators is currently scheduled for release during the 2012/13 financial year. This publication is expected to source data from the 2011 Census.