Employment and Earnings, Public Sector, Australia methodology

This publication contains estimates of public sector employees and cash wages and salaries obtained from the annual Survey of Employment and Earnings (SEE).

The conceptual framework used in SEE 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 employment and earnings statistics, and the sources and methods used in compiling these estimates, are presented in Labour Statistics: Concepts, Sources and Methods.

Estimates of employee earnings presented in this publication are based on the Australian conceptual framework for measures of employee remuneration. For further details, see Comparability of results.

The organisations that contribute to the statistics in this publication are classified:

• by institutional sector, in accordance with the Standard Institutional Sector Classification of Australia (SISCA), which is detailed in Standard Economic Classifications of Australia (SESCA);
• by industry, in accordance with the Australian and New Zealand Standard Industrial Classification (ANZSIC), (Revision 2.0);
• by state and territory; and
• by level of government.

Although earnings estimates relate to the full twelve months of the financial year, employment estimates relate to the last pay period ending in June of the given year. As a result, estimates of wages and salaries per person employed may be affected by any fluctuations in employment during the reference period. Given these differences, the ABS does not recommend using these components together to calculate average earnings.  

Financial data incorporate all units in scope of the SEE that were in operation at any time during the financial year.

All Commonwealth, State/Territory and Local government units are represented in this survey except:

• ANZSIC class 6330 Superannuation funds;
• ANZSIC class 7552 Foreign government representation;
• ANZSIC 9559 Other interest group services n.e.c. with SISCA 5000 Non profit institution serving households; and
• ANZSIC subdivision 96 Private households employing staff and undifferentiated goods-and-service-producing activities of households for own use.
   

Also excluded are the following employees who are not regarded as employees for the purposes of this survey:

• members of the Australian permanent defence forces;
• employees of overseas embassies, consulates, etc.;
• employees based outside of Australia;
• employees on workers' compensation who are not paid through the payroll;
• directors and office holders of public sector organisations who are not paid a salary.
   

The sample for SEE, like most Australian Bureau of Statistics (ABS) business surveys, is selected from the ABS Business Register (ABSBR) which is primarily based on registrations to the Australian Taxation Office (ATO) Pay As You Go Withholding (PAYGW) scheme. The ABSBR is updated quarterly to take account of:

• new businesses;
• takeovers and mergers;
• changes in industry classification;
• changes in the number of employees;
• businesses which have ceased employing; and
• other general business changes.
   

The estimates include an allowance for the time it takes newly registered businesses to be added to the survey population.

Businesses which have ceased employing are identified when the ATO cancels their PAYGW registration. In addition, businesses which have not remitted under the PAYGW scheme for the previous five quarters are removed from the population.

The SEE uses a sample survey methodology and collects information using web form questionnaires. Approximately 2,000 public sector employing units, selected from the ABS Business Register (ABSBR), are included in the survey.

The statistical unit for the survey comprises all the activities of a public sector employer in a particular state or territory based on the Australian Business Number (ABN) unit or Type of Activity Unit. Each statistical unit is classified to an industry which reflects the predominant activity of the business. The statistical units are stratified by state, industry and employment size, and within each stratum, statistical units are selected with equal probability.

A sample redesign and small domain estimation methodology were implemented for the 2013-14 survey. Both changes improved State by Level of Government estimate. The small domain estimation methodology involves adjusting the estimation weights to ensure that benchmark totals in each State by Level of Government cell within a stratum are met. This calibration to benchmark totals draws strength from the relationship between the data items and the benchmark variable to improve the State by Level of Government estimates.

The Economic Units Model is used by the ABS to determine the structure of Australian businesses and other organisations. The model consists of:

• The Enterprise Group (EG)
• Legal Entities (LEs)
• Type of Activity Units (TAUs)
• Location Units.
   

The EG and LE are institutional units and the TAU and Location are producing units.

The LE and the TAU are the main institutional and producing units used by the ABS to produce statistical outputs.

Diagram 1 illustrates the nature of the relationships between the different units within the model.

* The legal entity (LE) statistical unit is generally equivalent to a single ABN registration
 

The Legal Entity (LE) is an institutional unit covering all the operations in Australia of an entity which possesses some or all of the rights and obligations of individual persons or corporations, or which behaves as such in respect of those matters of concern for economic statistics. Examples of legal entities include companies, partnerships, trusts, sole (business) proprietorships, government departments and statutory authorities. Legal entities are institutional units. In most cases the LE is equivalent to a single ABN registration.

The Enterprise Group (EG) is an institutional unit that covers all the operations within Australia's economic territory of legal entities under common control. Control is defined in Corporations legislation. Majority ownership is not required for control to be exercised.

The Type of Activity Unit (TAU) comprises one or more Legal Entities, sub-entities or branches of a Legal entity that can report productive and employment activities. TAUs are created if accounts sufficient to approximate Industry Value Added (IVA) are available at the ANZSIC subdivision level.

A Location is a producing unit comprised of a single, unbroken physical area from which an organisation is engaged in productive activity on a relatively permanent basis, or at which the organisation is undertaking capital expenditure with the intention of commencing productive activity on a relatively permanent basis at some time in the future.

Various classifications are applied to the units in the ABS Economic Units Model. The main classifications applied are:

• ANZSIC
• Type of Legal Organisation (TOLO)
• Type of Business Entity (TOBE)
• Standard Institutional Sector Classification of Australia (SISCA)
• Public / Private classification.
   

ANZSIC is used to classify the industry in which the TAU has productive activity. Further information on this classification can be found in Australian and New Zealand Standard Industrial Classification (ANZSIC).

SISCA provides a framework for dividing the Australian economy into institutional sectors. Further information on this classification can be found in Standard Economic Sector Classifications of Australia (SESCA).

The ABSBR is a list of businesses and organisations operating in Australia and is based on the Australian Business Register (ABR). Organisations are included on the ABR when they register for an Australian Business Number (ABN). The Commonwealth Government requires all government departments and agencies to make use of the ABR to reduce government imposed reporting load, and to use the ABN as the primary reference number for all dealings between government and business. The ABSBR is used to create frames for the various business surveys run by the ABS.

The results of these statistics are based, in part, on ABR data supplied by the Registrar to the ABS under A New Tax System (Australian Business Number) Act 1999 which requires that such data is only used for the purpose of carrying out functions of the ABS. No individual information collected under the Census and Statistics Act 1905 is provided back to the Registrar for administrative or regulatory purposes. Any discussions of data limitations or weaknesses is in the context of using the data for statistical purposes, and is not related to the ability of the data to support the ABR's core operational requirements. Legislative requirements to ensure privacy and secrecy of the data have been followed. Only people authorised under the Australian Bureau of Statistics Act 1975 have been allowed to view data about any particular firm in conducting this survey. In accordance with the Census and Statistics Act 1905, results have been confidentialised to ensure that they are not likely to enable identification of a particular person or organisation.

It is not practicable for the ABS Economic Units Model to be applied to all ABR registrants and is organised into two parts: the profiled population, and the non-profiled population.

Profiled Population: Businesses and other organisations which are considered sufficiently complex and significant, are profiled according to the Economic Units Model. These enterprise groups typically have multiple legal entities, multiple TAUs and are among the largest contributors within industries.

Non-Profiled Population: Businesses and other organisations with less complex structures. They are regarded as an enterprise group with a single legal entity and a single TAU in accordance with the Economic Units Model. Information for units in the non-profiled population is largely sourced from the ABR.

The two populations are mutually exclusive and cover all organisations in Australia which have registered for an ABN.

Estimates of employee remuneration for the public sector are one of the inputs into the gross domestic product component of the Australian National Accounts, specifically "compensation of employees" estimates. The private sector component of compensation of employees estimates is provided by the Quarterly Business Indicators Survey which is published in Business Indicators, Australia. For further details see Australian System of National Accounts: Concepts, Sources and Methods.

The SEE was not conducted as a stand-alone survey in respect of 2010-11 or 2015-16. The 2010-11 and 2015-16 estimates of public sector employment and cash wages and salaries were produced from the Major Labour Costs Survey. However, the conceptual framework used is the same and the estimates can be compared with other years.

Estimates of employee earnings in this publication have been produced in accordance with the Australian conceptual framework for measures of employee remuneration. For details of this framework refer to the Employee Remuneration chapter of Labour Statistics: Concepts, Sources and Methods.

The measure of employee earnings presented for the annual series is 'cash wages and salaries', which is regular and irregular wages and salaries in cash, including amounts salary sacrificed.

Care should be taken when comparing data for the public sector over time. Estimates of public sector employment and earnings can change over time due to: changes in the sample design; privatisation of public financial and public trading enterprises; machinery of government changes; and other changes to statistical unit structures, including industry classification, resulting from periodic updating of the Profiled population (refer ABS Business Register).

Caution should be exercised when comparing estimates of numbers of employees from the SEE with those published monthly in Labour Force, Australia as there are a number of differences between the two collections. The SEE is a business survey that collects information from a sample of employers about their employees, whereas the Labour Force Survey is a household survey that collects information from the occupants of selected dwellings. The two collections use different sample design and survey methodologies and there are differences in scope and coverage.

SEE covers public sector organisations, including Commonwealth and state/territory government organisations, local government authorities, public corporations, universities, government controlled non-profit institutions, government marketing boards, legislative courts, municipal authorities and other statutory authorities. For the purposes of SEE, allocating an organisation to a Level of Government is undertaken by determining the institutional unit (i.e. Commonwealth, state or local government) deemed to exercise control. As such, where scoping and classification differences exist, SEE results may differ from other published sources.

Where figures have been rounded, discrepancies may occur between sums of the component items and totals.

The following publications contain related information:

• Australian Labour Market Statistics;
• Average Weekly Earnings, Australia - issued biannually;
• Employee Earnings and Hours, Australia - issued biennially;
• Labour Costs, Australia;
• Labour Force, Australia - issued monthly;
• Labour Statistics: Concepts, Sources and Methods; and
• Wage Price Index, Australia - issued quarterly.

As the estimates from the Survey of Employment and Earnings are based on information related to a sample of public sector employers rather than a full enumeration, they are subject to sampling variability. That is, they may differ from the estimates that would have been produced if the information had been obtained from all public sector employers. This difference, called sampling error, should not be confused with inaccuracy that may occur because of imperfections in reporting by respondents or in processing by the ABS. Such inaccuracy is referred to as non-sampling error and may occur in any enumeration whether it be a full count or a sample. Efforts have been made to reduce non-sampling error by careful design of questionnaires, detailed checking of returns and quality control of processing.

The sampling error associated with any estimate can be estimated from the sample results. One measure of sampling error is given by the standard error which indicates the degree to which an estimate may vary from the value that would have been obtained from a full enumeration (the ‘value’). There are about two chances in three that a sample estimate differs from the true value by less than one standard error, and about nineteen chances in twenty that the difference will be less than two standard errors.

An example of the use of standard error on levels is as follows. If the estimated number of employees was 1,400,000 with a standard error of 3,000, then there would be about two chances in three that a full enumeration would have given a figure in the range 1,397,000 to 1,403,000 and about nineteen chances in twenty that it would be in the range 1,394,000 to 1,406,000.

Another measure of the sampling error (for level estimates only) is the relative standard error (RSE), which is obtained by expressing the standard error as a percentage of the estimate to which it refers. Level estimates with an RSE between 25% and 50% are subject to sampling variability generally considered to be too high for most practical purposes and should be used with caution. Level estimates with an RSE of 50% or more are considered to be too unreliable for general use. Level estimates with an RSE of more than 25% are annotated in this publication.

The following table shows the standard errors for published estimates for states and territories and level of government for 2019-20. Standard errors for other estimates are available on request.