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QUALITY DECLARATION - SUMMARY


INSTITUTIONAL ENVIRONMENT

The statistics presented in this release were derived using data collected directly by the Australian Bureau of Statistics (ABS) under the authority of the Census and Statistics Act 1905.

Please refer to ABS Institutional Environment for more information about the institutional environment of the ABS, including its legislative obligations, financing and governance arrangements and mechanisms for scrutiny of ABS operations.


RELEVANCE

Statistics on public and private sector employees and cash wages and salaries presented in this publication have been obtained from the Major Labour Costs Survey (MLC). The MLC survey is designed to obtain information from employers about the main labour costs incurred as a consequence of employing labour. Similar surveys were conducted annually in respect of the financial years 1985-86 to 1991-92, then 1993-94, 1996-97 and lastly 2002-03.

Estimates of employee earnings are a key input to the gross domestic product component of the Australian National Accounts, specifically compensation of employees estimates. Major economic policy Departments at both the Commonwealth and state/territory levels consider labour costs data to be essential to their needs, for payroll tax purposes, particularly in terms of the breakdown of labour cost components, and also provides a useful role in policy analysis.


TIMELINESS

The Major Labour Costs survey is conducted irregularly, with the last publication being for the 2002-03 reference year. The 2010-11 estimates are scheduled for release in May 2012, eleven months after the end of the reference period.


ACCURACY

Information for the Major Labour Costs Survey is collected via mail questionnaires which are sent to approximately 7,000 public and private sector employers. The employer sample selected is stratified by state, industry division and employment size to ensure adequate state and industry representation.

The ABS aims to produce high quality data from its collections while minimising the reporting burden on businesses. To achieve this, extensive effort is put into survey and questionnaire design, collection procedures and processing.

Two types of error can occur in estimates that are based on a sample survey: sampling error and non-sampling error.

Sampling error occurs when a sample, rather than the entire population, is surveyed. It reflects the difference between estimates based on a sample and those that would have been obtained had a census been conducted. One measure of this difference is the standard error. There are about two chances in three that a sample estimate will differ by less than one standard error from the figure that would have been obtained if all businesses had been included in the survey, and about nineteen chances in twenty that the difference will be less than two standard errors.

Another measure of sampling error is the relative standard error, which is obtained by expressing the standard error as a percentage of the estimate to which it refers. The relative standard error 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. Relative standard errors of key estimates are available in a Technical Note on Data quality in Labour Costs, Australia, 2010-11 (cat. no. 6348.0).

Non-sampling error arises from inaccuracies in collecting, recording and processing the data. Every effort was made to minimise reporting error, by the careful design of questionnaires, intensive training of survey analysts, and efficient data processing procedures.

Non-sampling error also occurs when information cannot be obtained from all businesses selected in the survey. For the 2010-11 survey of Major Labour Costs, there was a 89.5% response rate from all businesses that were surveyed and found to be operating during the reference period. Data were imputed for the remaining 10.5% of operating businesses. This imputation contributed 10.9% to the estimate of total labour costs for all selected industries.


COHERENCE

The conceptual framework used in Major Labour Costs Survey aligns closely with the standards and guidelines set out in the International Labour Organisation's Resolutions of the International Conference of Labour Statisticians. Descriptions of the underlying concepts and structure of Australia's employment and earnings 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).

In addition to the Major Labour Costs Survey, the ABS conducts a number of other sample surveys of businesses which collect information about employee earnings. These include the Average Weekly Earnings survey, Survey of Employee Earnings and Hours and Labour Price Index Survey. It is important to note that these surveys have different purposes and that there are differences in the concepts, scope, sample selection and estimation methodologies used.


INTERPRETABILITY

The estimates from the Major Labour Costs Survey are only available as original series and are not seasonally or trend adjusted.

The reference period covered by the collection was, in general, the 12 months ended 30 June. Where businesses/organisations were unable to supply information on this basis, an accounting period for which data can be provided was used for data other than those relating to employment counts. Such businesses/organisations make a substantial contribution to some of the estimates presented in this publication, for example the MINING industry. As a result, the estimates can reflect trading conditions that prevailed in periods outside the twelve months ended June in the relevant year.

Although financial estimates relate to the full twelve months of the reference period, employment estimates relate to the last pay period ending in June of the given year. As a result, estimates of costs per employee may be affected by any fluctuations in employment during the reference period.

Further information about terminology and other technical aspects associated with these statistics can be found in the publication Labour Costs, Australia, 2010-11 (cat. no. 6248.0), which contains detailed Explanatory Notes, a Technical Note on Data Quality and a Glossary.


ACCESSIBILITY