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CONCEPTS The following paragraphs describe various conceptual issues relating to the ACLC Industry Classification.
In Australia, most industry statistics are compiled and analysed based on the Australian and New Zealand Standard Industrial Classification (ANZSIC). ANZSIC was developed jointly by the ABS and Statistics New Zealand in 1993 and revised in 2006, with minor updates in 2012 and 2013. Details of the most recent updates are available in ANZSIC 2006 (Revision 2.0). It provides the basis for the standardised collection, analysis and dissemination of economic data on an industry basis for Australia and New Zealand. ANZSIC 2006 provides a more contemporary classification system in both countries. Prior to 1993, separate national industrial classifications were used in Australia and New Zealand. ANZSIC also endeavoured to align with the International Standard Industrial Classification of All Economic Activities (ISIC) at the higher or subdivision level of the classification. Therefore, use of ANZSIC ensures comparability of industry statistics within Australia and internationally. The conceptual framework adopted for the development of ANZSIC 2006 uses supply-side based industry definitions and groupings. Using this approach, business units engaged in similar productive activities are grouped together. However, the ACLC Industry Classification is 'activity based' or 'purpose based' and designed to serve the needs of a particular segment of the population. It groups businesses whose main activities are to produce goods or provide services which are intended for use by people participating in cultural or leisure activities. It also groups businesses that provide support services to those businesses. Care must be taken when comparing data grouped according to the ACLC Industry Classification (such as employment or turnover for culture and leisure businesses) with data for other industry groups as defined by another classification because of potential overlap between the groups being compared. Comparisons between industry groups are only valid when using data based solely on ANZSIC (or other classifications which are designed to cover the whole economy without duplication) and where the addition of data from all industry divisions or classes always represents the whole economy.
The terms ‘unit’ and ‘business unit’ are used interchangeably throughout the Industry Classification. These terms refer to the business or government organisation, community organisation or other entity being classified or surveyed. In general, a business unit is an accounting unit for which a full set of accounts are maintained, allowing employment, profit and loss, and balance sheet data to be collected. Such a business unit may operate from one or more locations. As a result, units which are part of a larger organisation and have only an informal budget are not defined as separate business units. For example, a corporate museum (operated within another business) which does not keep a separate set of accounts would not qualify as a business unit. However, data on such secondary activities may still be collected. While the ACLC Industry Classification is designed to classify accounting units, it may also be used to classify other statistical units as long as comparison is undertaken with caution. For example, in a household survey, people may be asked to describe the activities undertaken at their place of work and this information may be used to classify the respondent’s industry of employment. However, the place of work may be a component of a larger business and may not have its own set of accounts. Thus, compared with the location at which the respondent works, the larger business may be classified to a different industry. As a consequence, measures of industry employment derived from such a survey are not strictly comparable with those derived from a survey of business (or accounting) units. Any class may contain business units which are a mix of private, government and community organisations as well as individuals undertaking business activities.
All business units can be either classified to a class within the ACLC Industry Classification or considered to be out of scope of the Classification. The process of allocating a business unit to an industry class involves a decision about the main activity or objective of the unit. That is, business units involved in activities belonging to more than one class are coded to the class covering their main activity. Generally this involves determining which activity accounts for the majority of the unit’s revenue or expense and is hence the predominant activity. However, there are exceptions to this method of determining predominance that are explained within the definitions of the individual classes. For example, it is recognised that the major source of revenue for newspaper publishers and for radio and television services is usually advertising. Yet, it is clear that the main objective of a radio station, for example, is to operate a radio service and it would be classified accordingly. There are business units which carry out cultural and leisure activities but the cultural or leisure activities may form only a small part of their overall activities. Such businesses are out of scope of the ACLC Industry Classification. For instance, a business may have an in-house library. However, if the main activity of the business is not related to culture or leisure, the business would be out of scope of the ACLC Industry Classification. Similarly, many government units undertake in-scope activities, but if their main activity is not related to culture or leisure, the units are out of scope. In addition, a business may only be classified to one industry class. For example, a business that engages in both book publishing and literature retailing will only be classified to the Industry Class representing its predominant activity. It is important to acknowledge that any culture and leisure activity of interest may take place in industries both within and outside of the scope of the ACLC Industry Classification and within and outside the scope of the individual industry class which appears most relevant to that activity. Thus, the ACLC Product Classification is designed to list and group cultural and leisure goods and services which may be produced or provided by any business unit in the Australian economy. Using the last example above, regardless of the industry to which the business is classified, it may be asked for data on the books it sells as distinct from the books it publishes. The extent to which data may be obtained for these products will depend on the level of detail in business records.
The ACLC Industry Classification includes and groups businesses based on the intended purpose of the goods and services they are mainly engaged in producing. In contrast, to a large extent, ANZSIC groups together units which engage in the same or similar production or service delivery processes and generally use similar technology. This difference in approach between the two industry classifications is particularly evident in the manufacturing classes and affects some other classes to a similar or lesser extent. In the ACLC Industry Classification, businesses whose main activity is the production of goods for which the intended purpose is cultural or leisure pursuits are grouped according to purpose, e.g. sports and physical recreation. In contrast, in ANZSIC manufacturing businesses are generally grouped according to the inputs and processes used (e.g. wood product manufacturing, metal product manufacturing, etc.). For example, the businesses classified to the ACLC Industry Class 341 ’Sports and physical recreation goods manufacturing' are mainly engaged in producing a range of goods intended for use in sports and physical recreation, such as sports clothes, sports shoes, weightlifting equipment and synthetic sports surfaces. The businesses classified to the ACLC Industry Class 481 ’Other culture and leisure goods manufacturing n.e.c.’ are mainly engaged in producing products used by children and adults for a range of leisure activities, such as watching TV, playing in a playground, playing board games, playing arcade games, gambling on poker machines, taking photos on family outings and listening to recorded music. Because of the different conceptual basis of ANZSIC, many of these businesses are classified to a range of disparate ANZSIC classes and are grouped with businesses such as manufacturing metal, chemical, paper and electronic products which are not used for leisure purposes. It follows that it would not be possible to obtain data for these classes through any standard ABS industry survey. It may be possible to produce estimates of components of these classes via surveys collecting product and industry data, but any attempt to produce aggregate data for these classes should be approached with extreme caution.
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