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EXPLANATORY NOTES


INTRODUCTION

1 This publication presents results from an Australian Bureau of Statistics (ABS) survey of the activities of pub, tavern and bar businesses and hospitality club organisations for the reference year 2004-05. This is the sixth time the ABS has conducted this survey. Previous surveys were conducted in respect of the 1986-87, 1991-92, 1994-95, 1997-98 and 2000-01 financial years.

SCOPE

2 The scope of the 2004-05 Clubs, Pubs, Taverns and Bars Survey was significant employing and non-employing businesses on the ABS Business Register, classified to the Australian and New Zealand Standard Industrial Classification (ANZSIC) Classes 5720 - Pubs, Taverns and Bars and 5740 - Clubs (Hospitality). For the purposes of these surveys significant employing and non-employing units were defined as those with turnover in 2004-05 of $400,000 or more. Non-employing units were excluded from previous surveys.

3 The scope included pub, tavern and bar businesses in Australia that generated income predominantly from the provision of alcoholic beverages for consumption on the premises, or in selling alcoholic beverages for consumption on or off the premises (e.g. from bottle shops at such premises) and hospitality club organisations that generated income predominantly from the provision of hospitality services (i.e. drinking facilities, gambling, meals and other hospitality services) to members. Businesses mainly engaged in the provision of accommodation, retailing alcoholic beverages for consumption off the premises, or organisations mainly engaged in operating licensed clubs were excluded from these surveys.

STATISTICAL UNITS DEFINED ON THE ABS REGISTER

4 The ABS uses an economic statistics units model on the ABS Business Register to describe the characteristics of businesses, and the structural relationships between related businesses. The units model is also used to break groups of related businesses into relatively homogeneous components that can provide data to the ABS.

5 In mid-2002, to better use the information available as a result of The New Tax System, the ABS changed its economic statistics units model. The new units model allocates businesses to one of two sub-populations. The vast majority of businesses are in what is called the Australian Taxation Office (ATO) Maintained Population, while the remaining businesses are in the ABS Maintained Population. Together, these two sub-populations make up the ABS Business Register population.

ATO Maintained Population

6 Most businesses and organisations in Australia need to obtain an Australian Business Number (ABN), and are then included on the ATO Australian Business Register. Most of these businesses have simple structures; therefore the unit registered for an ABN satisfies ABS statistical requirements. For these businesses, the ABS has aligned its statistical units structure with the ABN unit. The businesses with simple structures constitute the ATO Maintained Population, and the ABN unit is used as the economic statistics unit for all economic collections.

ABS Maintained Population

7 For the population of businesses where the ABN unit is not suitable for ABS statistical requirements, the ABS maintains its own units structure through direct contact with the business. These businesses constitute the ABS Maintained Population. This population consists typically of large, complex and diverse businesses. The new statistical units model described below has been introduced to cover such businesses:

• Enterprise Group: This is 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.
• Enterprise: The enterprise is an institutional unit comprising (i) a single legal entity or business entity, or (ii) more than one legal entity or business entity within the same Enterprise Group and in the same institutional subsector (i.e. they are all classified to a single Standard Institutional Sector Classification of Australia subsector).
• Type of Activity Unit (TAU): 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 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.

Comparison Over Time

9 Prior to the 2004-05 survey, the Clubs, Pubs, Taverns and Bars Survey used the management unit as the statistical unit. The statistical unit in the 2004-05 survey was the ABN unit for businesses with simple structures, and the TAU for businesses with complex structures. In most cases, ABN/TAU units concord with the management units used in previous surveys.

COVERAGE

10 The frame used for the Clubs, Pubs, Taverns and Bars Survey, like most ABS economic surveys, was taken from the ABS Business Register. The ABS Business Register is updated monthly to take account of new businesses and businesses which have ceased employing.

IMPROVEMENTS TO COVERAGE

11 Data in this publication have been adjusted to allow for lags in processing new businesses to the ABS Business Register, and the omission of some businesses from the register. The majority of businesses affected, and to which the adjustments apply, are small in size.

12 Adjustments have been made to include new businesses in the estimates in the periods in which they commenced operations, rather than when they were processed to the ABS Business Register. Adjustments of this type will continue to be applied in future periods.

13 For more information on these adjustments, please refer to the ABS publication Information Paper: Improvements to ABS Economic Statistics, 1997 (cat. no. 1357.0).

COMPARISON WITH OTHER ABS STATISTICS

14 Annual industry data for clubs, pubs, taverns and bars are also published in Australian Industry (cat. no. 8155.0). There are important differences between the statistics published in the Australian Industry and Clubs, Pubs, Taverns and Bars publications and users should exercise caution when making comparisons between the two sets of estimates.

15 The Australian Industry publication presents annual summary statistics at the ANZSIC class level. It shows the relative performance of each industry class, and allows patterns of change or growth to be analysed across particular segments of the Australian economy. The industry estimates presented in Australian Industry are used in the compilation of the National Accounts, and in the derivation of economy-wide indicators such as GDP.

16 The Clubs, Pubs, Taverns and Bars publication supplements the annual industry summary statistics with a detailed examination of the performance, structure and activities of pub, tavern and bar businesses and hospitality club organisations for the reference year of the survey.

17 One reason the two sets of estimates vary relates to the use of different industry coding practices. For the Australian Industry publication, businesses are coded to ANZSIC industry classes on the basis of the activity reported to the ATO when they registered for an ABN, or for more complex businesses, on the basis of information reported directly to the ABS (see Explanatory Notes paragraphs 4-8). On the other hand, Clubs, Pubs, Taverns and Bars presents estimates for ANZSIC Classes 5720 and 5740 based on detailed financial data reported in the survey.

18 Other differences in results relate to scope and coverage variations between the two surveys. All non-employing businesses were included in the scope of Australian Industry, however only significant employing and non-employing businesses were in scope of Clubs, Pubs, Taverns and Bars (see paragraphs 2-3 of the Explanatory Notes).

HISTORICAL COMPARISONS

19 While comparisons are made between the 2004-05 and 2000-01 survey results, the reader should bear in mind that the 2004-05 survey was not designed to support accurate estimates of change, and should exercise caution when comparing 2004-05 results to the 2000-01 results. The 2004-05 Clubs, Pubs, Taverns and Bars Survey has changed in scope from the 2000-01 survey. The following changes were made to the scope of the 2004-05 survey:

• inclusion of non-employing units with a turnover of over $400,000
• use of a partial frame for employing units with a turnover of over $400,000.

21 The inclusion of significant non-employing businesses in the 2004-05 Clubs, Pubs, Taverns and Bars Survey is estimated to have contributed an additional 3.9% to financial estimates for pubs, taverns and bars and 0.2% to financial estimates for hospitality clubs.

RELIABILITY OF DATA

22 When interpreting the results of a survey it is important to take into account factors that may affect the reliability of estimates. Such factors can be classified as either sampling or non-sampling error.

23 The estimates are based on information obtained from a randomly selected stratified sample of clubs, pubs, taverns and bars in the Australian business population. Consequently, the estimates in this publication are subject to sampling variability, that is, they may differ from the figures that would have been obtained if all units had been included in the survey (that is, if a census was conducted). One measure of the likely difference is given by the standard error (SE), which indicates the extent to which an estimate might have varied by chance because only a sample of units was included.

24 There are about two chances in three that a sample estimate will differ by less than one SE from the figure that would have been obtained if a census was conducted and approximately 19 chances in 20 that the difference will be less than two SEs.

25 Sampling variability can also be measured by the relative standard error (RSE), which is obtained by expressing the SE as a percentage of the estimate to which it refers. The RSE is a useful measure in that it provides an immediate indication of the sampling error in percentage terms, and this avoids the need to refer also to the size of the estimate. The following tables contain estimates of RSEs for a selection of the statistics presented in this publication.

RELATIVE STANDARD ERRORS FOR TABLE 1.1 PUBS, TAVERNS AND BARS, Summary of operations
		Businesses with gambling facilities	Businesses without gambling facilities	All businesses
		%	%	%
Businesses at end June		4.4	3.3	3.9
Premises at end June
	Capital cities and suburbs	4.3	1.3	3.1
	Other	4.4	0.7	3.4
	Total	3.6	0.6	2.6
Premises at end June
	With poker/gaming machines	2.8	. .	2.8
	With Keno	5.3	. .	5.3
	With TAB betting facilities	2.7	. .	2.7
Paid live performances		11.5	38.6	13.3
Employment at end June
	Licensed gaming staff	2.1	. .	2.1
	Other	7.0	2.2	4.7
	Total	5.0	2.2	3.8
Income
	Sale of liquor and other beverages	6.9	5.5	4.7
	Gambling income	5.0	. .	5.0
	Takings from meals and food sales	4.7	5.0	4.7
	Other	8.9	13.4	9.4
	Total	4.3	3.9	3.2
Expenses
	Labour costs	4.1	5.4	2.6
	Poker/gaming machine and other gambling taxes and levies	4.3	. .	4.3
	Purchases	6.5	3.7	5.2
	Other	4.0	3.4	3.0
	Total	4.6	3.8	3.4
Operating profit before tax		3.4	6.6	3.5
Operating profit margin		4.1	5.8	3.8
Industry value added		3.2	5.1	2.6
. . not applicable

RELATIVE STANDARD ERRORS FOR TABLE 2.1 CLUBS (HOSPITALITY), Summary of operations
		Organisations with gambling facilities	Organisations without gambling facilities	All organisations
		%	%	%
Organisations at end June		2.2	10.2	3.3
Premises at end June
	Capital cities and suburbs	0.4	17.2	3.6
	Other	3.0	14.3	3.6
	Total	1.9	10.1	2.9
Premises at end June
	With poker/gaming machines	2.0	. .	2.0
	With Keno	4.3	. .	4.3
	With TAB betting facilities	1.4	. .	1.4
Paid live performances		3.5	35.4	2.7
Employment at end June
	Licensed gaming staff	3.2	. .	3.2
	Other	2.1	3.7	2.1
	Total	1.5	3.7	1.4
Income
	Sale of liquor and other beverages	1.3	10.6	1.8
	Gambling income	2.5	. .	2.5
	Takings from meals and food sales	1.7	16.5	1.7
	Other	5.2	10.5	4.6
	Total	2.1	9.7	2.0
Expenses
	Labour costs	1.7	11.2	1.5
	Poker/gaming machine and other gambling taxes and levies	2.6	. .	2.6
	Purchases	1.4	9.0	1.9
	Other	2.6	7.8	2.4
	Total	2.0	8.9	1.8
Operating profit/surplus before tax		4.3	72.1	4.8
Operating profit/surplus margin		2.7	64.5	3.1
Industry value added		2.7	10.8	2.5
. . not applicable

26 As an example of the above, an estimate of total income for pubs, taverns and bars during 2004-05 was $11,114.3m and the RSE was estimated to be 3.2%, giving a SE of approximately $355.7m. Therefore, there would be two chances in three that, if all units had been included in the survey, a figure in the range of $10,758.6m to $11,470m would have been obtained, and 19 chances in 20 (i.e. a confidence interval of 95%) that the figure would have been within the range of $10,402.9m to $11,825.7m.

27 The sampling variability for estimates at the state/territory level was higher than for Australian level aggregates. Within states/territories, the sampling variability, and therefore the RSEs of estimates for smaller states/territories are higher than for larger states. Survey estimates for the smaller states/territories should therefore be viewed with more caution than those for other states.

28 Errors other than those due to sampling may occur in any type of collection and are referred to as non-sampling error. For this survey, non-sampling error may result from such things as deficiencies in the register of businesses from which the sample was drawn, non-response, imperfections in reporting and/or errors made in compiling results. The extent to which non-sampling error affects the results of the survey is not precisely quantifiable. Every effort was made to minimise non-sampling error by careful design and testing of the questionnaire, efficient operating procedures and systems and the use of appropriate methodology. Survey estimates subject to a high level of non-sampling error have been suppressed or provided with relevant cautions.

29 Estimates that have an estimated relative standard error between 10% and 25% are annotated with the symbol '^' . These estimates should be used with caution as they are subject to sampling variability too high for some purposes. Estimates with an RSE between 25% and 50% are annotated with the symbol '*', indicating that the estimate should be used with caution as it is subject to sampling variability too high for most practical purposes. Estimates with an RSE greater than 50% are annotated with the symbol '**' indicating that the sampling variability causes the estimates to be considered too unreliable for general use.

ROUNDING

30 Where figures have been rounded, discrepancies may occur between the sum of the components and the total. Similar discrepancies may occur between a proportion or ratio, and the ratio of the separate components.

REFERENCE PERIOD

31 Data contained in the tables in this publication relate to pub, tavern and bar businesses and hospitality club organisations in Australia during the year ended June 2005. Financial estimates included the activity of any business or organisation that ceased or commenced operations during the year. Counts of businesses/organisations and premises included only those that were operating at 30 June 2005. Employment included only those persons working for a club, pub, tavern or bar during the last pay period ending in June 2005.

ACKNOWLEDGMENT

32 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated; without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.

DATA AVAILABLE ON REQUEST

33 Inquiries about these statistics and more detailed statistics than those presented in this publication should be made by telephoning the contact shown on the front page.