TECHNICAL NOTE STATE AND TERRITORY ESTIMATES


INTRODUCTION

1 The 'Australian industry by division' data cube contains annual state and territory estimates for Australian industry for the 2007-08 to 2012-13 reference periods. The estimates use a combination of data directly collected in the Economic Activity Survey (EAS) and Business Activity Statement (BAS) data sourced from the Australian Taxation Office (ATO).


ESTIMATION METHODOLOGY

2 EAS state estimates are produced for Employment, Wages and Salaries and Sales and Service Income. For the purpose of compiling the estimates in this publication, data for businesses as recorded on the ABS Business Register (ABSBR) contribute via one of three categories (or 'streams') in accordance with significance and collection-related characteristics. The data is produced using a combination of estimation methods. The estimation method depends on the stream:

• Stream 1: Completely enumerated and medium size multistate businesses
• Stream 2: Sampled sector units
• Stream 3: Micro Non-Employing Units (MNEUs).

Stream 1: Completely enumerated and medium size multistate businesses

3 This stream consists of units recorded on the ABSBR as having employment of at least 300, plus medium size businesses (e.g. employment in the range 20-299) which according to information recorded on the ABSBR operate in more than one state or territory.

4 Stream 1 units contribute to the state and territory estimates via state data reported in the EAS.
Stream 2: Sampled sector units

5 This stream comprises of units selected in EAS which are not in Stream 1 and have turnover, in aggregate, above the bottom 2.5 percentile of BAS turnover for that industry, or are identified as employing businesses (based on ATO information).

6 Stream 2 units contribute to the state estimates via proration of their data across the states and territories.

7 State stratification is not used for selecting the EAS sample. As a result, state estimates can be inaccurate due to under or over representation of some states in the selected sample. To minimise this risk, ABS uses a synthetic estimation method. The data reported by Stream 2 units is prorated across the states using state proration factors. State proration factors are produced based on ABSBR survey frame information. For sales and service income, BAS turnover is used; for wages and employment, BAS wages. The proration factors are calculated at the stratum level.

Stream 3: Micro Non-Employing Units (MNEUs)

8 This stream comprises non-employing businesses whose BAS turnover, in aggregate, is below the bottom 2.5 percentile of BAS turnover for that ANZSIC subdivision. Stream 3 units contribute to state estimates for the main state of operation.

9 Stream 3 units are not sent a survey form, but enumerated based on data sourced from the Australian Tax Office (ATO). Data for Stream 3 is produced using BAS turnover to model sales and service income. The modelling parameters were based on the relationship between BAS data and reported data for small businesses in the direct collect sample over 3 years and were defined at the industry level. Wages and salaries were modelled as 0 since these businesses were non-employers. Employment was based on the business type of (legal) structure.

10 For Stream 3 units, it is assumed that the business only operates in one state. This is a reasonable assumption, given these units have no staff and very low turnover. As such, all of their reported data for the above variables contributes to the estimates of their main state of operation.