Entrepreneurship Indicators Programme (EIP)

ENTREPRENEURSHIP INDICATORS PROGRAMME (EIP) - TIMELY INDICATORS

Australia

Sources

The Australian Bureau of Statistics Business Register (ABSABR)
The Australian Business Register (ABR) - Short definition

Links

8165.0 - Counts of Australian Businesses, including Entries and Exits, Jun 2003 to Jun 2007 (ABS)
Business.gov.au (Entries - Delivery of the ABN: Australian Business Number + data with a GST role)
ITSA (The Insolvency and Trustee Service Australia) (Information on Personal Bankruptcies)
Australians Securities and Investment Commission (ASIC) - firm entries and firm insolvencies

Units

Businesses (legal units) with a GST role (GST: Goods and Services Tax).

For a relatively small number of businesses, the ABN unit is not suitable for ABS economic statistics purposes and the ABS maintains its own units structure through direct contact with businesses. These businesses consitute the ABS maintained population (ABSMP ). This population consists typically of large, complex and diverse groups of businesses. In the ABSMP, a type of activity unit (TAU) equates to one business.

The other population is the Australian Tax Office maintained population (ATOMP).

It is possible for a business entity to register for a single ABN regardless of the number of commercial activities.

There is a size threshold in terms of turnover (< $50,000 pa) but not in terms of employment (employing and non-employing businesses are counted).

In June 2007, there were 839,938 (42%) employing businesses and 1,171,832 (58%) non-employing businesses.

Coverage

The ABS-ABR is using the national ABR as a primary source of information. Thresholds and filters are then applied.

Out of scope:

Entities without an ABN (Mainly individuals whose business activities fall under the threshol for GST compliance and whose taxation obligations can be satisfied under the Personal Income Tax System)

ABNs without a GST role (GST: Goods and Services Tax) (Mainly businesses with turnover of < $50,000 pa, not-for-profit insitutions with turnover of < $100,000 pa or entities whose activity does not involve trading in goods or services (eg. investment vehicles))

Entities which are not considered to be actively trading in the market sector: Central bank, General government, NPISHs, Rest of the world; Charitable institution, Social and sporting clubs, Trade unions and other associations, Other unincorporated Entity, Diplomatic or Trade missions, Other foreign government; Other services and Private households employing staff (either not operating in the market sector ot where the majority of similar entities have already been made out of scope).

Large, complex and diverse groups with one single ABN. USe of TAUs instead.

Business.gov.au gives total number of enterprises with an ABR, total number of active units, number of entries per month. with or without a GST role.

Entries

A business entry event is the registration of a new business for an ABN and the allocation of a GST role, or the allocation of a GST role to an existing ABN which previously did not have this role.
Included will be businesses which:

have previously existed and subsequently recommenced activity under their original ABN and GST role; and

had ceased remitting BAS for at least five successive quarters (LTNRs) but had recommenced remitting prior to the next reference period. All businesses falling into these groups will be recorded as business entries.

Thus, a business entry is defined as a business which is actively trading on the business register at 1 June in the reference year but was not actively trading at 1 June the previous year.

Exits

A business exit event is the cancellation of a business's ABN or GST role and/or when a business ceases to remit GST for at least five consecutive quarters in respect of that ABN.
Thus, a business exit is defined as a business which was actively trading on the business register at 1 June in the previous year but was not actively trading at 1 June in the reference year.
It is important to note that a business exit event does not necessarily equate to a business "failure". There may be a number of other reasons why a business exit event has occurred, including events relating to selling a business (e.g. due to an owner/operator retiring), and events relating to changes in a business's structure (e.g. due to merger or takeover activities), etc. Such activities may also result in one or more business exit events occurring.

Insolvency

Companies entering external administration

These statistics show the number of companies entering into a form of external administration for the first time, broken down according to the initial form of administration. The numbers provided are based on documents lodged with ASIC for the given period.

ASIC advises that a company will be included only once in these statistics, regardless of whether it subsequently enters into another form of external administration. The only exception occurs where a company is taken out of external administration, for example as the result of a court order, and at a later date re-enters external administration.

Insolvency appointments

ASIC’s Insolvency Appointments statistics show the number of insolvency appointments recorded, categorised by type of appointment.

As a company can be under more than one form of insolvency administration at any one time and can progress from one type to another, a company can be included in these statistics more than once. For this reason, the number of insolvency appointments will always be greater than the number of companies going into external administration for the first time.

Here are two examples:

A Court may appoint a provisional liquidator to a company. Later, the provisional liquidator’s appointment may conclude when the court appoints a liquidator. These roles differ, and the law treats them as separate appointments. Both sets of statistics record the appointment of the provisional liquidator, but only the Insolvency Appointment statistics count the subsequent appointment of the liquidator.

An administrator is appointed when a company goes into voluntary administration. If the creditors agree with a recommendation that the company enter into a Deed of Company Arrangement, there will be a new appointment of an administrator to the Deed. While both sets of statistics record the initial appointment of the administrator, only the Insolvency Appointments statistics count the subsequent appointment of the deed administrator.

Members voluntary windings up excluded

These appointments relate to companies that are still solvent, and are of no relevance in determining the level of company insolvency. They are therefore not included in either set of statistics.

Frequency

Annual (Entries/exist). Fiscal years, 1st June.

Quarterly (Bankruptcies)

Period covered

Entries/exits: 2004-2007 (from June 2003 to June 2007)

Bankruptcies (Quarterly): June 1986 to December 2009

Breakdowns

Entries/Exits: 16 activities (ANZIC) and employment size ranges (incl. non-employing businesses)

Data