• Performance and achievements

    Reporting framework

    The ABR constitutes Program 1.3 of the Treasury Portfolio Budget Statement for the ATO.

    The statement identifies an objective and set of deliverables, as well as a set of key performance indicators (KPIs), against which we report on performance.

    Objective

    The ABR provides an authoritative and trusted source of business identity information and issues the ABN to uniquely identify businesses and streamline government and business interaction.

    The objective of the program is to progress the ABR as a whole-of-government resource for streamlining business and government interactions. The ABN acts as the unique identifier enabling these interactions.

    Deliverables

    • Issue and maintain the ABN and AUSkey registrations to support interactions between government and businesses.
    • Promote the ABR, AUSkey and SBR as whole-of-government resources.
    • Provide eligible government agencies with access to details of registered ABN holders.
    • Provide the community with access to publicly available data to assist in verifying core business identity and other government registration information.

    Key performance indicators 

    Our performance in maintaining, enhancing and promoting use of the ABR and AUSkey and working with Treasury and other agencies to implement SBR is reported in this part of the report against the following key performance indicators:

    • Progress new services that support whole-of-government projects.
    • Increase agency awareness and engagement.
    • Improve integrity of the ABR data.
    • Maintain acceptable service standards.

    Australian Business Register

    The ABR is a comprehensive database of identity information provided by businesses and other organisations, including government bodies and non-profit organisations, when they register for an ABN.

    As a unique trusted identifier, the ABN not only accurately identifies businesses in their dealings with government, but it also enables other businesses and consumers to verify the identity of the entities they are dealing with. The publicly available data, searchable using the online ABN Lookup facility, includes entity name, ABN, GST status, and, in the case of charities and non-profits, their government-endorsed status. Business names are being added progressively.

    Government agencies (Australian, state, territory and local) can access more detailed non-publicly available information on the register to support their programs.

    Key outcomes for 2011-12  

    • The number of entities with an active ABN grew by 5.0% to 7,352,523 over the year. The number of individuals with an active ABN grew by 5.1% (9.3% in 2010–11) and companies by 5.6% (2.2% in 2010–11).
    • The rate of growth in active ABNs fell for individuals, trusts and partnerships, but rose for companies and superannuation funds.
    • The slowing growth in the number of individuals with an ABN reflects our stronger compliance efforts to improve the ABR’s integrity, with greater scrutiny of registrations and a more systematic focus on verifying the continuing eligibility of registered entities – leading to a 25% increase in application refusals and Registrar-initiated cancellations almost doubling.
    • The 2011 ABR Survey results reinforce the need for integrity measures, including programs to raise community awareness of the eligibility criteria and the requirements to update ABR details, and processing improvements to improve the accuracy and currency of the ABR.
    • We upgraded the information technology platform, enabling business name registrations to be completed using a link from the ABR website to the ASIC website. This is the first step in a two-phase project, with the second phase to deliver a combined ABN/business name online application – two of the most common registrations for new businesses.
    • The number of government agency partners (with whom we have agreements to use non-public ABR data) increased by 38% to 333, with a new simplified partnering arrangement streamlining the engagement process and providing agencies with greater flexibility in the way they use ABR data.
    • Some 280 million ABN Lookup searches were made during the year, up by 64% over the previous year.

    Registrations

    The total number of entities with an active ABN grew by 5.0% to 7,352,523 over the year, compared with an increase of 6.2% in the previous year. The rate of growth in active ABNs fell for individuals, trusts and partnerships, but rose for companies and superannuation funds.

    Table 2.1 Total change in the number of active ABNs by entity type, three years to 30 June 2012 
    Entity type 2009–10 2010–11 Change
    (%)
     2011–12  Change
    (%)

    Companies

    1,536,022

    1,569,735

    2.19

    1,657,643

    5.60

    Government

    13,108

    12,965

    –1.09

    12,920

    –0.35

    Individuals

    3,037,120

    3,320,837

    9.34

    3,488,994

    5.06

    Partnerships

    719,573

    734,709

    2.10

    749,002

    1.95

    Superannuation funds

    450,221

    471,922

    4.82

    503,650

    6.72

    Trusts

    837,308

    893,874

    6.76

    940,314

    5.20

    TOTAL

    6,593,352

    7,004,042

    6.23

    7,352,523

    4.9

     

    Table 2.2 Number of active ABNs by state/territory, three years to 30 June 2012  
    State/Territory  June 2010 June 2011 June 2012  % of total 2012

    ACT

    90,703

    96,673

    102,152

    1.39

    NSW

    2,137,056

    2,262,752

    2,370,035

    32.19

    NT

    51,069

    54,782

    57,597

    0.78

    QLD

    1,356,118

    1,446,093

    1,515,830

    20.59

    SA

    461,840

    489,968

    512,849

    6.97

    TAS

    113,804

    120,079

    125,131

    1.70

    VIC

    1,676,787

    1,787,615

    1,887,890

    25.64

    WA

    690,187

    735,148

    772,200

    10.49

    Other

    16,063

    17,124

    18,163

    0.25

    TOTAL

    6,593,627

    7,010,234

    7,361,847

    100

    Some figures may vary to those elsewhere in this report due to a system change in May 2012 which changed the way information was recorded.

    Significant increases were recorded in all major industry sectors, with the notable exception of construction, where the number of ABNs increased by less than 1% following an increase of 5.8% in 2010–11 (see appendix 4).

    The slowing growth in active ABNs reflects in part a large increase in the number of Registrar-initiated cancellations, mainly of individuals who were found to be not operating an enterprise, as part of a stepped-up integrity and enforcement program (see ' integrity of ABR data’). The construction sector accounted for 40.3% of all Registrar-initiated cancellations in 2011–12.

    Table 2.3 Number of active ABNs by industry sector, three years to 30 June 2012
    Main industry description  June 2010  June 2011  June 2012  % of total 2012 

    Blank – No main industry code

     

     

    79

    0.00

    Accommodation and food services

    176,361

    187,480

    199,509

    2.71

    Agriculture

    357,046

    364,618

    371,036

    5.04

    Arts and recreation services

    269,911

    293,574

    312,169

    4.24

    Administrative and support services

    259,894

    272,794

    281,960

    3.83

    Construction

    897,529

    949,611

    957,484

    13.01

    Education and training

    157,302

    171,579

    184,237

    2.50

    Electricity, gas, water and waste

    30,199

    35,519

    40,989

    0.56

    Financial and insurance services

    888,512

    913,580

    952,605

    12.94

    Forestry

    13,931

    14,363

    14,506

    0.20

    Fishing

    8,261

    9,326

    9,639

    0.13

    Health care and social assistance

    251,844

    270,146

    287,480

    3.90

    Information media and telecommunications

    108,237

    121,277

    132,813

    1.80

    Manufacturing

    200,328

    204,083

    206,217

    2.80

    Mining

    21,481

    23,669

    26,569

    0.36

    Other services

    925,405

    1,074,741

    1,213,941

    16.49

    Public administration and safety

    29,934

    30,328

    30,605

    0.42

    Professional, scientific and technical services

    587,228

    605,138

    621,033

    8.44

    Rental, hiring and real estate services

    573,980

    587,617

    600,506

    8.16

    Retail trade

    381,495

    410,275

    434,365

    5.90

    Transport, postal and warehousing

    298,359

    308,976

    317,446

    4.31

    Wholesale trade

    156,310

    161,462

    166,659

    2.26

    TOTAL

    6,593,628

    7,010,156

    7,361,847

    100

    Some figures may vary to those elsewhere in this report due to a system change in May 2012 which changed the way information was recorded.

    We received 712,191 applications for registration, a 1.9% increase over the previous year. The number of new registrations and reissued ABNs (total registrations) fell by 2.4%. Of the 712,191 applications 587,333 successfully registered for an ABN. The unsuccessful applications are due to a number of factors including the applicant not being eligible for an ABN and the same applicant submitting more than one application.

    In relation to new registrations and reissued ABNs (total registrations), there was very strong growth for super funds, and significant growth for companies, but continuing declines for individuals, partnerships and trusts.

     

    Table 2.4 Number of total ABN registrations by entity type, three years to 30 June 2012
    Entity type  2009–10  2010–11  Change
    (%) 
    2011–12  Change
    (%) 

    Companies

    107,638

    108,714

    1.00

    117,780

    8.34

    Government

    97

    80

    –17.53

    141

    76.25

    Individuals

    382,831

    354,138

    –7.49

    332,674

    –6.06

    Partnerships

    42,815

    38,215

    –10.74

    37,015

    –3.14

    Superannuation funds

    31,496

    33,209

    5.44

    40,698

    22.55

    Trusts

    72,962

    67,339

    –7.71

    59,025

    –12.35

    TOTAL

    637,839

    601,695

    –5.67

    587,333

    –2.39

    A total of 3,652,360 updates were made to the ABR in 2011–12, a decline of 8.4% over the previous year. The decline reflected a spike in updates experienced in 2010–11 due to the introduction of AUSkey. In addition to the updates initiated by the client directly to the Registrar, some updates are also taken from ATO systems and from information supplied by the Australian Securities and Investments Commission (ASIC).

     

    Table 2.5 Number of ABR updates, three years to 30 June 2012
    June 2010  June 2011  Change %  June 2012  Change % 

    3,272,757

    3,988,688

    21.88

    3,652,360

    –8.43

    ABN registration applications can be made online at the website or on a paper form. In 2011–12, 99.1% of applications were made via the website compared with 96.2% in the previous year.

    Registration processing was adversely impacted by the introduction of the new ABR information technology system platform (see below), with 88.9% of registrations being processed within 28 days (against a service standard of 93%) and 93.7% within 42 days (against a service standard of 99%).

    IT system upgraded

    The ABR’s information technology system was upgraded during the year, reducing the risk of unplanned outages and enabling business name registrations to be completed using a link from the ABR website to the ASIC website from 28 May 2012. This is the first step in a two-phase project, with the second phase to deliver a combined ABN/business name online application – two of the most common registrations for new businesses.

    Publicly available information now includes registered business names.

    Use of ABN Lookup

    Anyone can use the online ABN Lookup facility (www.abr.business.gov.auExternal Link). This facility is hosted by the Department of Industry, Innovation, Science, Research and Tertiary Education and allows access to ABR public data including basic details such as entity name, ABN and GST status.

    The number of searches in 2011–12 increased by 64% over the previous year. Searches via the website (essentially manual searches) accounted for 32% of searches, with the remainder via web services functionality. This facility allows registered users to integrate ABN Lookup with their own software applications. For example, a software application that uses the ABN as a business identifier can interact with ABN Lookup to automatically validate details or populate a database with public information on the ABR.

    Table 2.6 ABN Lookup searches by month, 2011–12
    Month Via website Via web services Total

    July

    7,617,540

    13,741,839

    21,359,379

    August

    7,950,296

    13,159,028

    21,109,324

    September

    7,321,300

    8,288,000

    15,609,300

    October

    7,095,126

    28,993,382

    36,088,508

    November

    8,126,912

    17,934,256

    26,061,168

    December

    5,864,692

    14,796,047

    20,660,739

    January

    5,942,078

    13,057,466

    18,999,544

    February

    7,277,600

    13,897,261

    21,174,861

    March

    7,506,672

    21,542,578

    29,049,250

    April

    6,533,842

    14,222,378

    20,756,220

    May

    8,072,518

    15,322,241

    23,394,759

    June

    7,425,132

    19,301,842

    26,726,974

    Total

    86,733,708

    194,256,318

    280,990,026

    Integrity of ABR data

    As the single ‘source of truth’ for whole-of-government business registrations, the ABR’s integrity is vital not just for the national tax system but for state taxation, superannuation, business confidence and the wellbeing of workers.

    Integrity depends on:

    • the validity of initial and continuing registration, and
    • the accuracy and currency of registration processing.
    • As part of reporting on the operations of the ABR, an annual ABR Survey is undertaken to provide assurance on the integrity of the ABR data and inform strategies to improve data integrity (see ‘ABR survey-key findings and implications'. The ABR Survey is a vital information source for the management of the ABR, with the outcomes informing our policy, planning and day-to-day operations activities.

     The substantial increase in resources allocated to compliance activities this year has allowed higher scrutiny of registrations and continuing registration (resulting in more than double the number of Registrar-initiated cancellations).

    Our integrity and enforcement strategy is risk-driven. We use risk profiling to identify patterns that indicate a higher-than-average risk of ineligible entities being registered. These higher-risk groups are subject to greater scrutiny in registration processing and in verification of continuing registration.

    During the year we focused on strengthening the ABR risk management framework and having it more strongly supported by an intelligence capability. Improvements include the development of a risk-profiling tool, which will provide greater rigour in the identification of ABN holders that need to be checked for eligibility.

    Community education and compliance

    Our efforts to raise awareness in the community around the rules for registration and issuing of ABNs and to counter misunderstandings will be backed up by a stronger focus on enforcement in the coming year and beyond. During 2010–11 we developed a set of messages to support the new penalty regime, which provides for a penalty to be imposed on someone who makes a false statement in relation to applying for an ABN.

    False or misleading statements could result in a penalty of up to $6,600 (refer to PS LA 2012/4 Administration of penalties for making false or misleading statements that do not result in shortfall amounts). The penalty applies to statements made on or after 4 June 2010 but may be remitted or reduced if the person makes a voluntary disclosure about the statement before we contact them.

    To support the application of the new penalty arrangements, we are developing a range of compliance products and processes. These are being trialled with a view to applying them to larger scale review work.

    ABN entitlement

    Entities such as companies, super funds and government entities are entitled to an ABN.

    As individuals are only entitled to an ABN where they are carrying on an enterprise as a sole trader, the online registration process takes the applicant through a series of questions to establish their bona fides before their application is processed.

    Before starting the application process, individuals can also check their entitlement to an ABN by using an online tool, which takes them through a detailed set of questions to help them determine their eligibility.

    In 2011–12, we refused 45,835 applications for an ABN from individuals compared with 36,721 in the previous year, an increase of 25%.

    Table 2.7 Number of ABN applications refused by entity type, three years to 30 June 2012
    Entity type  2009–10  2010–11  Change
    (%)
    2011–12  Change
    (%)

    Companies

    6

    4

    –33.33

    23

    475.00

    Government

    0

    0

    0.00

    0

    0.00

    Individuals

    56,869

    36,721

    –35.43

    45,835

    24.82

    Partnerships

    2

    1

    –50.00

    26

    2,500.00

    Superannuation funds

    22

    1

    –95.45

    0

    –100.00

    Trusts

    0

    0

    0.00

    9

    900.00

    TOTAL

    56,899

    36,727

    –35.45

    45,893

    24.96

     

    Table 2.8 Number of ABN applications refused by state/territory, three years to 30 June 2012
    State/Territory  2009–10  2010–11  Change
    (%)
    2011–12  Change
    (%) 

    ACT

    587

    420

    –28.45

    594

    41.43

    NSW

    14,888

    10,176

    –31.65

    13,051

    28.25

    NT

    684

    476

    –30.41

    709

    48.95

    QLD

    13,374

    8,792

    –34.26

    11,073

    25.94

    SA

    4,006

    2,656

    –33.70

    3,131

    17.88

    TAS

    675

    462

    –31.56

    602

    30.30

    VIC

    16,874

    9,684

    –42.61

    12,582

    29.93

    WA

    5,492

    3,975

    –27.62

    5,578

    40.33

    Other

    72

    64

    –11.11

    57

    –10.94

    TOTAL

    56,652

    36,705

    –35.21

    47,377

    29.08

    Some figures may vary to those elsewhere in this report due to a system change in May 2012 which changed the way information was recorded
    Table 2.9 Number of ABN applications refused by industry sector, three years to 30 June 2012
    Main industry description   2009–10  2010–11  Change
    (%)
    2011–12  Change
    (%)

    Accommodation and food services

    1,370

    1,041

    –24.01

    1,374

    31.99

    Agriculture

    1,195

    576

    –51.80

    734

    27.43

    Arts and recreation services

    742

    713

    –3.91

    1,243

    74.33

    Administrative and support services

    1,289

    921

    –28.55

    1,298

    40.93

    Construction

    15,196

    9,501

    –37.48

    11,574

    21.82

    Education and training

    1,239

    962

    –22.36

    1,373

    42.72

    Electricity, gas, water and waste

    1,068

    611

    –42.79

    884

    44.68

    Financial and insurance services

    299

    232

    –22.41

    313

    34.91

    Forestry

    107

    76

    –28.97

    92

    21.05

    Fishing

    201

    172

    –14.43

    193

    12.21

    Health care and social assistance

    1,340

    1,107

    –17.39

    1,329

    20.05

    Information media and telecommunications

    1,490

    1,152

    –22.68

    1,414

    22.74

    Manufacturing

    945

    530

    –43.92

    673

    26.98

    Mining

    222

    146

    –34.23

    262

    79.45

    Other services

    22,693

    13,438

    –40.78

    16,921

    25.92

    Public administration and safety

    201

    136

    –32.34

    139

    2.21

    Professional, scientific and technical services

    948

    719

    –24.16

    1,092

    51.88

    Rental, hiring and real estate services

    332

    262

    –21.08

    413

    57.63

    Retail trade

    2,707

    2,180

    –19.47

    2,803

    28.58

    Transport, postal and warehousing

    2,358

    1,761

    –25.32

    2,702

    53.44

    Wholesale trade

    710

    469

    –33.94

    551

    17.48

    TOTAL

    56,652

    36,705

    –35.21

    47,377

    29.08

    Some figures may vary to those elsewhere in this report due to a system change in May 2012 which changed the way information was recorded.

    Cancellations

    To maintain the integrity of the ABR, we operate a continuing program to verify eligibility and remove ineligible entities where there are indicators that an entity is not entitled to an ABN. These include where the registrant has not made a lodgment with the ATO for several consecutive years (indicated by factors such as not reporting business income or not lodging activity statements).

    A more systematic focus for the program in 2011–12 resulted in 99,463 ABN registrations being cancelled by the Registrar, almost double the number in the previous year. Sole traders accounted for 98% of Registrar-initiated cancellations, almost all on the grounds that the individual was not in fact carrying on an enterprise.

    Table 2.10 Number of Registrar-initiated cancellations by entity type, three years to 30 June 2012
    Entity type  2009–10  2010–11  Change (%)  2011–12  Change 
    (%)

    Companies

    19,780

    43,991

    122.40

    28

    –99.94

    Government

    0

    0

    0.00

    0

    0.00

    Individuals

    6,247

    3,640

    –41.73

    97,721

    2584.64

    Partnerships

    29

    14

    –51.72

    14

    0.00

    Superannuation funds

    105

    3,245

    2990.48

    354

    –89.09

    Trusts

    44

    213

    384.09

    1,346

    531.92

    TOTAL

    26,205

    51,103

    95.01

    99,463

    94.63

    Table 2.11 Number of Registrar-initiated cancellations by reason1
     Reason  2009–10  2010–11  Change (%)  2011–12  Change (%) 

    Change in structure (letter2)

    3

    4

    33.33

    4

    0.00

    Client deceased (letter)

    4,711

    2,045

    –56.59

    1

    –99.95

    Not operating an enterprise (letter)

    1,030

    748

    –27.38

    97,819

    12,977

    Company deregistered (letter)

    19,634

    46,635

    137.52

    6

    –99.99

    Change in structure (no letter3)

    4

    28

    600.00

    6

    –78.57

    Client deceased (no letter)

    6

    9

    50.00

    3

    –66.67

    Not operating an enterprise (no letter)

    244

    428

    75.41

    1,761

    311.45

    Fraud (no letter)

    482

    1,238

    156.85

    70

    –94.35

    Company deregistered (no letter)

    114

    253

    121.93

    24

    –90.51

    TOTAL

    26,228

    51,388

    95.93

    99,694

    94.00

    1. Some figures may vary to those elsewhere in this report due to a system change in May 2012 which changed the way information was recorded. 
    2. ‘Letter’: after client (or executor) has been informed by letter of our intention to cancel. 
    3. ‘No letter’: after client (or executor) not informed of our intention to cancel. 

    About a quarter of all cancellations in 2011–12 were in the construction sector, reflecting our increased compliance focus on this sector.

    In addition to cancellations by the Registrar, ABN holders themselves voluntarily initiate cancellation of their registration. This sometimes follows our contact with them to discuss their eligibility. There were 137,289 client-initiated cancellations in 2011–12.

    Table 2.12 Number of client-initiated cancellations by entity type, three years to 30 June 2012
    Entity type 2009–10 2010–11 Change (%)  2011–12 Change (%) 

    Companies

    29,775

    31,128

    4.54

    29,526

    –5.15

    Government

    197

    210

    6.60

    180

    –14.29

    Individuals

    55,655

    67,364

    21.04

    65,497

    –2.77

    Partnerships

    22,913

    23,895

    4.29

    22,475

    –5.94

    Superannuation funds

    3,990

    8,341

    109.05

    8,504

    1.95

    Trusts

    9,266

    10,898

    17.61

    11,107

    1.92

    TOTAL

    121,796

    141,836

    16.45

    137,289

    –3.21

    Table 2.13 Number of client-initiated cancellations by reason, three years to 30 June 2012
    Reason  2009–10  2010–11  Change (%)  2011–12  Change (%) 

    Change in structure

    6,524

    5,914

    –9.35

    5,332

    –9.84

    Never operated

    14,940

    18,483

    23.71

    19,374

    4.82

    Not operating in Australia

    69

    541

    684.06

    403

    –25.51

    Ceased operating

    95,769

    109,073

    13.89

    109,603

    0.49

    Other reason provided

    1

    29

    2,800.00

    42

    44.83

    Business sold

    2,904

    2,853

    –1.76

    2,553

    –10.52

    Temporary suspension of business

    208

    184

    –11.54

    190

    3.26

    TOTAL

    120,415

    137,077

    13.84

    137,497

    0.31

    Some figures may vary to those elsewhere in this report due to a system change in May 2012 which changed the way information was recorded. 

    To assess industry-based approaches to improving compliance, we conducted a risk assessment pilot focusing on three industries – taxi, telemarketing and cleaning – identified as high-risk for compliance with the ABN eligibility rules. The review of about 300 ABN holders in each of these sectors found that a significant percentage of those reviewed were not in business, and their registrations were cancelled.

    In the taxi industry there is a compliance risk associated with a streamlined registration process that recognises the requirement for taxi drivers to register for GST (for which an ABN is a prerequisite). In the case of the cleaning and telemarketing industries, the pilot revealed a level of sham contracting practices.

    Table 2.14 Total number of cancellations by industry sector, three years to 30 June 2012
    Main industry description  2009–10  2010–11  Change (%)  2011–12  Change (%) 

    Accommodation and food services

    6,336

    8,035

    26.82

    7,926

    –1.36

    Agriculture

    6,580

    7,186

    9.21

    8,368

    16.45

    Arts and recreation services

    3,092

    3,706

    19.86

    7,681

    107.26

    Administrative and support services

    6,538

    7,662

    17.19

    9,102

    18.79

    Construction

    21,419

    25,777

    20.35

    60,088

    133.11

    Education and training

    2,648

    3,191

    20.51

    4,921

    54.21

    Electricity, gas, water and waste

    779

    986

    26.57

    1,196

    21.30

    Financial and insurance services

    15,068

    24,607

    63.31

    14,440

    –41.32

    Forestry

    215

    321

    49.30

    443

    38.01

    Fishing

    144

    119

    –17.36

    829

    596.64

    Health care and social assistance

    3,966

    4,982

    25.62

    6,066

    21.76

    Information media and telecommunications

    2,691

    3,443

    27.95

    4,781

    38.86

    Manufacturing

    5,652

    7,412

    31.14

    8,037

    8.43

    Mining

    583

    732

    25.56

    686

    –6.28

    Other services

    18,534

    22,247

    20.03

    35,838

    61.09

    Public administration and safety

    857

    1,020

    19.02

    930

    –8.82

    Professional, scientific and technical services

    13,885

    19,962

    43.77

    16,839

    –15.64

    Rental, hiring and real estate services

    8,700

    10,521

    20.93

    7,616

    –27.61

    Retail trade

    12,605

    15,854

    25.78

    18,672

    17.77

    Transport, postal and warehousing

    10,500

    12,549

    19.51

    13,320

    6.14

    Wholesale trade

    5,439

    7,481

    37.54

    5,983

    –20.02

    Other/NIL

    10

    6

    –40.00

    5

    –16.67

    TOTAL

    146,241

    187,799

    28.42

    233,767

    24.48

    Some figures may vary to those elsewhere in this report due to a system change in May 2012 which changed the way information was recorded. 

    These and other compliance risks will be addressed through an expanded integrity and enforcement program under the Towards a better business future (TBBF) program (see 'Challenges and where we are heading').

    A program to cancel the ABNs of deregistered companies was put on hold in 2011–12 while we resolved issues related to the way in which we exchange data with the ASIC (and in the meantime focused on individual ABN holders). With these issues now largely resolved, we will resume the systematic cancellation of deregistered companies’ ABNs.

    To avoid unnecessary cancellations where a company has been deregistered for administrative reasons (such as failure to pay fees) and subsequently reregistered, we will allow a period of ‘grace’, generally 12 months before cancelling the ABN of a deregistered company.

    Table 2.15 Total number of cancellations by state/territory, three years to 30 June 2012  
    State/Territory  2009–10  2010–11  Change (%)  2011–12  Change (%) 

    ACT

    2,159

    2,765

    28.07

    3,187

    15.26

    NSW

    51,756

    66,604

    28.69

    80,996

    21.61

    NT

    1,063

    1,367

    28.60

    2,272

    66.20

    QLD

    31,104

    37,933

    21.96

    51,913

    36.85

    SA

    9,021

    11,273

    24.96

    13,927

    23.54

    TAS

    2,342

    2,952

    26.05

    3,800

    28.73

    VIC

    33,595

    45,519

    35.49

    52,551

    15.45

    WA

    14,762

    18,863

    27.78

    24,267

    28.65

    NIL

    439

    523

    19.13

    854

    63.29

    TOTAL

    146,241

    187,799

    28.42

    233,767

    24.48

    Some figures may vary to those elsewhere in this report due to a system change in May 2012 which changed the way information was recorded.

    Updating ABR records

    Registrants are required to update their ABR details within 28 days of any changes occurring, although this is not widely known (see 'ABR survey)

    AUSkey holders (see 'AUSkey') can electronically update their ABR records.

    The TBBF program (see 'Challenges and where we are heading') includes initiatives to prompt ABN holders to update their details.

    Improving quality of registration processing

    We measure the accuracy of registration processing, which is undertaken by our service providers in the ATO, according to an acceptable quality level (AQL) approach. Against a target of 95%, the AQL for processing of new registrations and updates in 2011–12 was 93.9% compared with 86.7% for the previous year.

    To improve the quality of processing, we have continued to work with the ATO to ensure the products and processes they use are up to date, practical and comply with the law.

    We have developed contact products (scripts for phone contact and proforma letters) and processes for use when reviewing the entitlement of ABN holders in identified high-risk groups. These products are designed to support both small-scale, targeted campaigns, as well as for use in a high-volume work environment. Additional products have also been developed to support the implementation of the new penalty regime.

    When applying for an ABN or maintaining registration details in the ABR it is important that the information applicants or registrants provide is true and correct. Making a false or misleading statement to the Registrar could result in a penalty.

    A particular focus this year has been to assist processing staff to better understand entitlement decisions relating to a request for an ABN and potential refusal of the application.

    A full suite of training products is available for use by ATO staff. Regular meetings also occur to discuss and review options for improvements for both enabling products and resolution of exceptions or improvements to the operating system.

    Data repair

    Other programs to improve the accuracy and currency of data include:

    • ANZSIC Repair program – ABR records for each entity include its Australian and New Zealand Standard Industrial Classification (ANZSIC) code. This code identifies what type of industry the business is in. It is used by a range of partner agencies including the ATO for taxation compliance and local government for economic and infrastructure planning. The main user is the Australian Bureau of Statistics, which uses the ANZSIC code for statistical modelling and economic forecasting. In some cases we contact registrants where there are indications that their ANZSIC code is incorrect.
    • The Integrity Watch process has been designed to identify anomalies that may occur in the register. These anomalies can occur for a variety of reasons, such as errors in information provided by clients. This process includes the ongoing analysis of the ABR data and the development and implementation of treatment strategies to correct the anomalies.

    Snapshot: Who is entitled to an ABN?

    To be entitled to an ABN, an entity must be a:

    • company incorporated under the Corporations Act 2001 in Australia
    • charitable institution or trustee of a charitable fund in Australia
    • deductible gift recipient in Australia
    • religious institution in Australia
    • superannuation fund, or
    • government entity

    OR

    If the entity is not one of these types of entity (for example, it is an individual or partnership), it is entitled to an ABN if all of the following statements apply:

    • its activity is carried out in the
      • form of a business
      • nature of trade, or
      • form of a regular or continuous grant of a lease, licence or interest in property
       
    • its activity is carried out in Australia or it makes supplies that are connected with Australia
    • its activity is not a private recreational pursuit or hobby.

    For partnerships where all or most of the partners are individuals, a reasonable expectation of profit must apply. 

    Feature ABR survey – key findings and implications

    The results of our 2011 ABR survey strongly reinforce the need for increased integrity and enforcement efforts, including a stronger focus on community education, to reduce the number of ineligible entities, particularly individuals, holding ABNs, and encourage ABN holders to keep their details up to date.

    In trend terms, the latest findings broadly align with the findings of previous surveys.

    Eligibility

    Of the ABN holders surveyed, 25% volunteered that their ABN was no longer required. Extrapolated to the entire population, this suggests that approximately 1.8 million of the 7.1 million active ABNs (at the time of the survey) are no longer in use or not required. Of these about 1.3 million would be individuals.

    On the basis of entity types, the percentages who indicated that they still required their ABN were:

    • 61% of individuals
    • 75% of partnerships
    • 87% of companies
    • 91% of trusts
    • 99% of superannuation funds
    • 100% of government agencies.

    Accuracy of key data fields

    Of the ABR data fields:

    • the legal/main name was correct for 99% of entries
    • the trading name was correct for 96% of entries
    • the postal address was correct for 88% of entries
    • the business address was correct for 77% of entries.

    Individuals who volunteered that they no longer required an ABN were more likely to have incorrect address details on the ABR. This suggests that cancelling ABNs no longer required significantly improves the accuracy of address records.

    Only 51% of ABN holders were aware of the requirement to update ABR details within 28 days of any changes.

    The survey was conducted over the phone (for the second year) based on a sample of 1,650 ABN holders, of whom contact could be made with 51%. Other evidence, such as voice messages, suggested that the phone contact numbers were correct for 62% of the sample. Only 34% of ABR entries had a usable email address.

    Analysis of the results suggests that the accuracy of an ABN record diminishes over time.

    The impact of inaccurate records

    Shortcomings in the accuracy of the ABR have implications for agencies that use ABR data. Relying on inaccurate records affects the quality of research and analysis activities and the targeting of government programs, and results in unnecessary administrative costs.

    Inaccurate address data, in particular, has implications for agencies that are using such information in regulating business activities and in planning disaster recovery and economic modelling.

    Community awareness and compliance

    Improving the integrity of the ABR has both an external and internal focus. On the one hand, we need to improve community awareness of and compliance with the eligibility criteria and the requirement for ABN holders to update their details, such as address and contact information, when they change. Internally, we need to improve the quality of processing and maintenance of data.

    It’s not enough for eligibility criteria to be satisfied when entities first register for an ABN. If their circumstances change and they are no longer eligible they are required to cancel their ABN. The survey revealed that some ABN holders believe, incorrectly, that their ABNs would be automatically cancelled if not used.

    Many ABN holders, and their agents and advisers, are unaware of the requirement to update their ABR records within 28 days of any changes. Some believe, incorrectly, that updating such details on income tax returns, for example, will not only update their tax records, but also their ABR record. This is not necessarily the case as only some updates are passed from ATO systems to the ABR. In any event, the lodgment of such information with the ATO may not satisfy the requirement to update ABR records within 28 days.

    Where they have an AUSkey, ABN holders and their agents can update their details online, but awareness of this is not widely known even among agents.

    Third parties have a big influence on compliance with the requirements of the ABR.

    There is anecdotal evidence, supported by the ABR Survey results, that people may be prompted to apply for an ABN by third parties – such as employers/clients, retailers and educational institutions – even where they are not eligible.

    Agents and advisers are also a key leverage point for the integrity of the ABR, as for many ABN holders their agent manages their ABN registration.

    Agency awareness and engagement

    The ABR is a comprehensive database of identity information provided by businesses when they register for their ABN.

    While anyone can use the ABN Lookup facility http://www.abr.business.gov.au/External Link) to access ABR public data (basic details such as entity name, ABN and GST status), non-public data (including details of the entity’s business activities and associates) is only available to Australian, state, territory and local government agencies under conditions set by the ABN Act.

    Agencies use non-public data in a wide range of ways, including in service delivery, licensing, education on regulatory requirements, compliance activities, and pre-filling and validation of data in forms lodged by businesses online. Many councils also use ABR data to monitor local business activity and trends for planning and economic development purposes.

    With another 128 partner agencies engaged during 2011–12, taking the total to 387, we now have a critical mass of customers whose use of ABR is becoming embedded in their business models. Of the 387 partner agencies we have 333 using non-public data (a full list of our partner agencies is included as appendix 1).

    The number of agency partners, particularly local councils, is increasing as they become aware of how existing users are benefiting from the use of ABR data.

    Table 2.16 Number of partner agencies 2010–11 and 2011–12
      2010–11 2011–12 Change %
    Local

    157

    213

    35.67

    State and territory

    87

    128

    47.13

    Australian Government (federal)

    28

    46

    64.29

    TOTAL

    272

    387

    42.28

    Following a presentation by the Registrar at a national conference of the Australian Local Government Association (ALGA) in Canberra in June 2012, in which he outlined the many different ways in which councils are using the ABR data, ten local government agencies signed agreements to become ABR partners. Of the ten new partner agencies, seven were directly attributed to the attendance of an agency delegate at the ALGA conference.

    Table 2.17 Number of local government partner agencies by state/territory at 30 June 2012
    ACT

    0

    NSW

    67

    NT

    4

    QLD

    26

    SA

    22

    TAS

    11

    VIC

    54

    WA

    29

    TOTAL

    213

    Partner agency satisfaction is measured each year through a service review survey. In 2011–12, satisfaction levels were comparable with the previous year, except for data quality. Satisfaction with data quality declined from 95.3% to 91.5%.

    Table 2.18 Partner agency satisfaction rating
      2010–11 
    (%)
    2011–12 
    (%)
    Data quality

    95.30

    91.50

    Data delivery services

    98.40

    98.40

    Client support service

    100.00

    100.00

    Agency access agreements

    To simplify and streamline the partnering process, we introduced a standard terms and conditions agreement for ABR partnerships during the year to replace MOUs (memorandum of understanding). The standard agreement provides a speedier, less resource-intensive and more flexible way of providing agencies with access to data while ensuring that legal requirements for access are met.

    Previously, agencies wanting access to ABR non-public data were required to sign a tailored MOU, which would need to be amended whenever the agency wanted to change their use of the data in any significant way.

    Now agencies wanting access to ABR non-public data complete a Terms and Conditions for access to ABR information. This designates an officer of the partner agency as an ‘entrusted person’ (under the ABN Act), who is empowered to make an assessment against the Act on the agency’s use of the data without further reference to the Registrar.

    We annually renew a sample of agencies to ensure they are using the data correctly.

    Agency partners are generally being transitioned to the standard terms and conditions as the MOUs come up for annual re-accreditation. Under the new arrangements, there will no longer be a requirement for annual re-accreditation. Our partnership managers will maintain regular contact with their clients to help them maximise the value they receive from ABR data and realise its full potential.

    Access tools

    Agencies can access ABR data via the secure Bulk Data Exchange (BDE) electronic portal, on disk, or via Fed Link (Australian Government agencies only). Most agencies are now starting to use BDE, as it is fast and efficient.

    To analyse the data, many agencies use our ABR Query software application, which allows users to sort and filter ABR data. Following feedback from agency partners, the tool was enhanced during the year with additional indicator fields for easier filtering of entity types and ABNs of interest.

    Currently, ABR Query is used by more than 100 agencies, mainly local councils and others that use small data sets. Developing an analysis tool for all agencies to improve ease of use of ABR data is part of a proposed body of work for 2012–13.

    This year we also started using an online web-based system, Webbex, to provide training in the use of ABR Query and to demonstrate use of ABR data generally. We also use Webbex as an online conference facility to demonstrate the potential of ABR data.

    Table 2.19 Number of bulk data extracts issued
      2010–11  2011–12 
    Bulk data extracts (data disc)

    553

    450

    Bulk data extracts (bulk data exchange)

    247

    788

    TOTAL

    800

    1,238

     

    Table 2.20 Partner access to ABR data by channel
    Number of partners accessing via:  2010–11  2011–12 

    Bulk data extracts (data disc)

    226

    107

    Bulk data extracts (bulk data exchange)

    120

    229

    Online subscription to an ABN (Agency services)

    6

    6

    ABN Lookup (public data)

    196

    239

    Case study

    ABR helps identify key business resources for fire recovery

    Victorian local councils drew on non-public ABR data to help local communities recover from Victoria’s devastating Black Saturday bushfires in 2009.

    For example, Nillumbik Shire Council used ABR data to identify home-based businesses and primary producers impacted by the fires. They were able to provide them with information on the various government assistance programs available to help them rebuild, including emergency grants, low-interest loan schemes, and free business advice and counselling services.


    Councils use ABR to verify who they are dealing with

    One city council uses ABR data to check an entity’s details and confirm address information for sending compliance notices, ensuring they are sent to the correct legal entity.

    The ABR data also provides details about an entity’s directors and associates, and this is used to locate them for recovery of unpaid rates.

    This council also uses the ABR data to validate tender submissions, verifying the ABN details of an entity and ensuring the details provided are valid and correct. It is a mandatory for the supplier to provide a valid ABN before the tender submission is considered.

    Significant efficiencies have been gained by using the ABR data to check entity information before contracts are awarded. Previously all checks were made through commercial information brokers.

    Another council in western Sydney has recently begun using ABR data to identify and verify entity details to ensure rates rebates and exemptions, such as those available to agricultural enterprises and charities, are applied fairly.

    New services to support whole-of-government projects

    ABN business names project

    We have upgraded the ABR’s information technology system, enabling business name registrations to be completed using a link from the ABR website to the ASIC new business name registration service. This service replaced state and territory trading name registration systems on 28 May 2012.

    Work is progressing for the next system changes due in late November 2012. These will deliver a combined ABN/business name online application – two of the most common registrations for new businesses. Users will only need to enter their details once to apply for an ABN and register a business name.

    Business names registered with ASIC from 28 May 2012 will be included on the entity’s ABR record and be shown on ABN Lookup. While business names registered before 28 May 2012 on a state or territory register have been automatically transferred to the ASIC business names register, they will only be included on the entity’s ABR record and shown on ABN Lookup where the entity provides their ABN to ASIC.

    Supporting other current government initiatives that will rely or impact on ABR

    Work is underway to support other current government initiatives that will rely or impact on ABR, including:

    • changes to the superannuation industry following the Cooper Review
    • establishment of the Australian Charities and Not-for-profits Commission.

    Challenges and where we are heading

    Under the TBBF program, the Government provided $68.5 million over four years from 2012–13 to improve the operation of the ABR through four key projects:

    • improving the integrity of information on the ABR – to ensure the information on the register is up to date and that ABNs are only issued to and retained by eligible entities
    • enhancing entity details on the register (including details of branches, more comprehensive information on associates and geocoding of business addresses/locations) so that information is more useful for all levels of government
    • developing tools that will make sharing, extraction and analysis of data on the register easier for Australian Government, state and local authorities in support of compliance activities, policy development, infrastructure and service delivery planning
    • modernising the ABR and AUSkey websites to enhance the user experience.

    The integrity and enforcement initiatives were estimated in the Budget to increase tax revenue by an estimated $97.7 million over the period by refusing or cancelling the registration of people who are more correctly identified as employees. This will require them to be engaged under the pay as you go regime.

    These initiatives will include:

    • contact with 660,000 registrants (generally by letter or text) asking them to update their ABR details
    • 30,000 desk reviews of eligibility
    • 6,000 field reviews of eligibility
    • contact with 30,000 registrants to check the accuracy of their ANZSIC industry code.

    In addition, there will be reviews of 200,000 ABR records under an ongoing program that involves cancelling ABNs and advising the entity where there is evidence that they are no longer eligible.

    Case study

    ABR data – the constant critical component in council projects

    In the future, when a late night shift worker rides the bus in the City of Auburn in Sydney western suburbs they could have the ABR to thank.

    The council is using ABR data to scope and target services in an innovative new project to provide community support to transport disadvantaged workers in the region.

    Using industry codes and address details, the council is approaching large employers operating multiple work shifts in the most disadvantaged areas to gauge the possible need for transport assistance among their employees.

    At the same time, the council is using the data to identify potential project partners – both within the transport industry and from licensed clubs or sports and physical recreation clubs where privately-owned minibuses may be available during club downtimes.

    In addition to the local transport project, the council relies on ABR data to:

    • target its bilingual small business forums (in partnership with other local councils and the University of Western Sydney)
    • monitor changes and trends in industry sectors, as well as growth in particular suburbs
    • identify emerging businesses and sectors to prepare for growth and to provide necessary services and infrastructure to the region
    • identify all stakeholders for the National Broadband Network rollout in Auburn City
    • collaborate with all tiers of government in the development of projects.

    The data is used to support the council’s community strategic plan, corporate planning process, economic development strategy and digital economy strategies

    Jenny Coppock, the manager of Economic Development for Auburn City Council, said that ABR data is critical to economic development in the region.

    ‘ABR data underpins our economic development initiatives – helping us to assist local business managers to manage, strengthen and grow their businesses, create jobs, attract investment and enhance the sustainability of the local and wider economy.’

    ‘The ABR data has also been invaluable in supporting the NBN rollout across our region,’ she said. ‘It is the constant critical component in any of our projects.’

    Brisbane City Council profiles its resources boom

    As one of the largest local councils in Australia, Brisbane City Council is positioning itself as a global hub for the resource and service industry.

    Lord Mayor Graham Quirk said Brisbane was at the hub of a global resources boom, which currently contributes $25 billion each year to the city’s economy.

    ‘In addition to this figure, a further $165 billion worth of new resource projects are expected to be rolled out in Queensland over the next 10 years,’ Mr Quirk said.

    ‘The challenge for Council is to maximise the economic return from the global resources boom in our city to all sectors over the long term.

    ‘One of my top priorities this term will be to promote the economic development of our city, and to achieve this I have allocated more than $15 million in this year’s budget towards economic development.’

    The mining industry is a key contributor to Brisbane’s economy with every mining job created generating up to 15 jobs in industries that support mining. The city is also the location of headquarters for some of the world’s leading mining and energy companies.

    Brisbane City Council has an Economic Development Plan that ensures the city will continue to attract companies and gain a competitive advantage by providing a well connected business environment for resource industry technologies and services.

    In developing its Economic Development Plan 2012–2013, Brisbane City Council used ABR data to profile the mining sector. Before this analysis, Council was aware there were a large number of mining companies in Brisbane, but was pleasantly surprised by the results.

    The analysis identified over 170 mining companies registered in the local government area, as well as a large number of companies providing goods, services and technologies to this sector. They also discovered that a world class mining equipment manufacturer was based in Brisbane.

    Using the ABR Query tool, the council identified entities using the ANZSIC code, entity type and GST status, and used address commonalities to find sizable companies.

    Going forward, the ABR data will allow the council to track the growth of mining and associated industries.

    Using the ABR data to profile the mining industry has highlighted to Brisbane City Council the potential for analysis of other industries that are important to the city’s economy.

    AUSkey

    AUSkey is a whole-of-government authentication solution that provides ABN holders with a cost effective, secure and easy-to-use way of digitally verifying their identity for online transactions with government agencies.

    AUSkey is a single digital key to access government online services. Its growing acceptance as the preferred national authentication solution is reducing the need for businesses and other organisations to maintain multiple identifiers and passwords to interact with government online.

    Key outcomes for 2011–12

    • The number of active AUSkeys grew by more than 60% during the year to over 750,000.
    • 15 government agencies had adopted AUSkey as an authentication solution for 24 government online services at 30 June 2012, compared with 13 agencies and 17 services a year earlier.
    • We are working with another 17 agencies to implement AUSkey authentication for their online services.

    User trends

    Following the strong initial take-up in 2010–11 (AUSkey was introduced in May 2010), the past year saw further growth. There were 751,452 active AUSkeys at 30 June 2012 (representing 375,254 entities), an increase of 63% and 43% respectively over the year.   

     

    Table 2.21 Number of active AUSkeys by entity type, 30 June
    Entity type  Number of active AUSkeys % of total AUSkeys 

    Companies

    367,483

    48.9

    Government

    9,793

    1.3

    Individuals

    175,110

    23.3

    Partnerships

    70,594

    9.4

    Superannuation funds

    15,847

    2.1

    Trusts

    112,625

    15.0

    TOTAL

    751,452

    100.0

     

    Table 2.22 Number of AUSkeys per entity, 30 June 2012
    Number of AUSkeys issued to entity  % of all entities for which an
    AUSkey has been issued 

    1

    61.0

    2

    21.9

    3

    7.9

    4

    3.4

    5 to 9

    4.3

    10 to 19

    1.1

    20 to 29

    0.3

    50 to 99

    0.1

    100 or more

    0.0

    TOTAL

    100.0

    Most of the increase was accounted for by entities registering for their first AUSkey, but the number of entities with multiple AUSkeys also grew significantly. Some 61% of entities for which an AUSkey has been issued have a single AUSkey, 21.9% of entities have two AUSkeys and 17.1% three or more AUSkeys – see table 2.22. While an AUSkey can only be used for transactions by the entity to which it is registered, the digital keys are issued to individuals associated with that entity. Therefore, an entity can have more than one AUSkey.

    The number of online service authentications over the year primarily reflects ATO lodgement cycles. AUSkey became the sole online authentication solution for transactions with the ATO following the expiry of all remaining ATO public key infrastructure (PKI) digital certificates in May 2012.

    There was steady growth, albeit from a low base, in the number of authentications for other government agency services, which target specific client groups or in some cases involve pilot services. We expect to see the use of AUSkey continue to increase, as more agencies adopt it for their online services, and community awareness grows.

    Table 2.23 Number of active AUSkeys by industry sector, 30 June 2012
    Main industry description    Number of active AUSkeys % of total AUSkeys 

    Accommodation and food services

    17,608

    2.34

    Agriculture

    22,256

    2.96

    Arts and recreation services

    10,814

    1.44

    Administrative and support services

    28,422

    3.78

    Construction

    64,138

    8.54

    Education and training

    17,367

    2.31

    Electricity, gas, water and waste

    5,179

    0.69

    Financial and insurance services

    88,275

    11.75

    Forestry

    547

    0.07

    Fishing

    310

    0.04

    Health care and social assistance

    30,058

    4.00

    Information media and telecommunications

    15,995

    2.13

    Manufacturing

    30,980

    4.12

    Mining

    8,010

    1.07

    Other services

    62,570

    8.33

    Public administration and safety

    6,214

    0.83

    Professional, scientific and technical services

    201,332

    26.79

    Rental, hiring and real estate services

    42,979

    5.72

    Retail trade

    44,203

    5.88

    Transport, postal and warehousing

    22,636

    3.01

    Wholesale trade

    31,556

    4.20

    NIL/Other

    3

    0.00

    TOTAL

    751,452

    100.00

    Agency awareness and engagement

    We work with government agencies that are seeking authentication solutions for new and existing online services.

    New AUSkey adopters during the year include the Australian Prudential Regulation Authority, the Australian Government Department of Health and Ageing and the Victorian State Revenue Office.

    Agencies are adopting AUSkey for a range of reporting requirements including SBR-enabled lodgements (see appendix2).

    Currently, 17 agencies are working to implement AUSkey as an authentication solution for their business online services. These services, scheduled for release over the next two years, will see the use of AUSkey continue to expand beyond its initial focus on tax and financial reporting (including via the SBR channel) to encompass support for a broad range of government services including industry, community services and environment and natural resources programs.

    As well as business-to-government reporting, the new services include government-to-government interactions.

    We support agencies implementing online services to make informed decisions about authentication. When they have decided to implement AUSkey, we work with them to communicate with stakeholders and clients about how to access and use AUSkey and to address technical challenges that arise during implementation. We also provide ongoing support after the services go live.

    We are working with the Australian Government Information Management Office (AGIMO) with the aim of having AUSkey accredited under the Gatekeeper Public Key Infrastructure (PKI) Framework. The accreditation process is expected to be completed by the end of 2012.

    Gatekeeper accreditation will increase the level of confidence in AUSkey by agencies that are considering its use as an authentication solution for new and existing online services. The accreditation also gives assurance that the AUSkey system and AUSkey holder information is well managed, with adequate safeguards in place.

    Table 2.24 Number of agencies with government online services accepting AUSkey
      30 June 2011  30 June 2012  Change 
    (%)
    Australian Government agencies

    5

    7

    40

    State and territory agencies

    8

    8

    0

    TOTAL

    13

    15

    15

    User experience

    The online registration process for AUSkey allows ABN holders to register, download and install their AUSkey, and then use it almost immediately. Where online verification of a user’s identity is not possible, their application can usually be processed offline within 48 hours.

    The AUSkey registration process has been enhanced to provide improved instruction, descriptors and support to new users through online help backed up by phone support where necessary.

    Feedback from across the spectrum of AUSkey users, from large complex organisations to small businesses and tax professionals, has been very positive in relation to how easy AUSkey is to install and use. Demand from users for technical support continues to fall as they become more familiar with the software and as the user and system issues experienced during implementation have been resolved.

    However, feedback from users also indicates that further improvements are needed to the online credential manager and the AUSkey credential renewal process, and also to processes when the AUSkey solution is rolled out for a specific online service. Enhancements are being developed to address these issues.

    AUSkeys are designed to automatically renew at the end of a two-year period. As the first AUSkeys issued approached their initial expiry date, a system issue was identified that was preventing auto-renewals. The system was updated to correct the problem and the issue was addressed in the interim through client advice and the promotion of the existing AUSkey functionality that enables AUSkey holders to obtain an additional AUSkey.

    Snapshot: AUSkey, ABR, ATO and Business – a collaborative partnership delivering benefits for business

    Many large businesses across Australia see having efficient, timely and intuitive electronic interactions as fundamental to their continued commercial success. This includes fast and easy access to the ABR and the ATO. AUSkey provides these organisations with the necessary security and flexibility to access the electronic gateway needed to fulfil their lodgement and reporting obligations with both the ATO and ABR.

    The ongoing commitment to continuously improve electronic solutions for large business is supported by a collaborative approach when developing systems and processes that evolve with the needs of business. Recent examples for large business include enhanced processes that streamlined the migration of large numbers of digital certificates to AUSkeys and the creation of cross-entity authorisations that give large business with many associated entities a simpler and quicker way of accessing the ATO Portal.

    As the Group Tax Manager in one of Australia’s financial services organisations said, ‘Together, we continue to improve the processes that help us manage our AUSkeys and access to the Business Portal. We look forward to us all working together in developing processes that enable us to engage with the ATO and ABR when and where we need.’

    Challenges and where we are heading

    • The AUSkey solution is now technically stable, and our major challenge lies in working with prospective AUSkey adopters (agencies that accept AUSkey authentication) to help them understand the benefits of and implement the solution for their online services.
    • Planned improvements to enhance the user experience include enhanced support for users to self-manage their credentials and to renew their AUSkey credentials.
    • We will continue to monitor and review potential security threats in line with the expansion of online services adopting AUSkey as their chosen authentication credential.

    Case study Department of Health and Ageing uses AUSkey for Aged Care Benchmarking System

    In September 2011, the Department of Health and Ageing (DoHA) implemented a new online service, the Aged Care Benchmarking System.

    This service enables representatives of aged care providers to access the Aged Care Benchmarking portal using their AUSkey and submit information about performance against a number of criteria. Reports can then be generated providing comparisons against the industry and similar services. These comparative reports enable aged care providers to identify opportunities to improve operations and financial performance.

    The AUSkey solution provides both the department and its clients, the aged care providers, with assurance that individuals accessing the online service have been verified via established authentication processes.

    Standard Business Reporting

    Business-to-government reporting can be unnecessarily complex due to the lack of standard definitions across the large number of government forms. Businesses may have to interpret terms for one agency that have a different meaning for another, or use a variety of terms for different agencies that actually mean the same thing.

    Standard Business Reporting (SBR) is a whole-of-government initiative to reduce the burden on business of government reporting requirements.

    SBR streamlines reporting across government forms and agencies, through:

    • a common reporting language in the form of a data dictionary (the SBR Definitional Taxonomy) that simplifies reporting by rationalising the range of data items – eliminating unnecessary or duplicated data items
    • a channel for businesses to report electronically to government agencies directly from their own business systems using SBR-enabled software.

    Even where users continue to lodge paper forms, the SBR program will help reduce the cost of business-to-government reporting by rationalising the range of data items that software developers need to support.

    SBR has been co-designed by the Australian, state and territory governments in partnership with the business community, particularly the accounting profession and business software suppliers.

    Our role in SBR is to develop and host the infrastructure for SBR in collaboration with the Treasury. Our scope of work includes developing standard taxonomies in conjunction with other participating agencies and the software industry. We also host the system platform (the core system) that interfaces between the users’ systems (running SBR-enabled software) and those of the agencies receiving the reports (participating agencies).

    Key outcomes for 2011–12

    • The SBR Definitional Taxonomy was endorsed as a standard for cross-agency interaction under the National Standards Framework for Government.
    • Development of the Definitional Taxonomy in the three years to 30 June 2012 has seen 28,661 data items rationalised to just 6,195 – that is, for the forms that have been included in the scope of SBR, there has been a greater than 75% reduction in the number of data items that need to be described and coded in reporting software.
    • SBR lodgements grew steadily from 556 in 2010–11 to 22,493 in 2011–12, with lodgements almost doubling in the last quarter.
    • The core SBR Production system was available 100% of the time apart from planned outages.

    Developing the taxonomies

    A key part of the work involved in enhancing SBR is developing the taxonomies that define the data items (the Definitional Taxonomy) and the reporting structures (the Reporting Taxonomy).

    SBR provides standard data definitions, so that business and accounting concepts such as ‘asset’, ‘income’ and ‘employee’ have the same meaning when being used by the reporting business’s systems and those of the government agencies to which it is sending the reports.

    The data elements are defined once and reused across multiple forms and multiple agencies. By reusing common data elements, businesses only need to understand and report to government on these data elements, which minimises the reporting burden. The Definitional Taxonomy also reduces the need for software developers to interpret government legislation in developing software.

    During the year we progressed and released changes to the Definitional and Reporting taxonomies as approved by the whole-of-government Taxonomy Approval Committee. These changes provide for:

    • updates to seven ATO forms and two accompanying schedules to reflect legislative changes to take effect from 1 July 2012
    • updates to 15 Australian Prudential Regulation Authority forms to align to adjustments to the market risk framework by the international Basel Committee on Banking Supervision to take effect from 1 January 2012.

    The SBR Definitional Taxonomy, which applies the International Financial Reporting Standard, was endorsed during the year as a standard for cross-agency interaction under the National Standards Framework for Government, managed by the Department of Finance and Deregulation. This is expected to encourage more widespread use of the taxonomy beyond those agencies that currently participate in the SBR program.

    Figure 2.1 Progress in rationalising the number of data items since the SBR program began

    Figure 2.1 represents the below table 2.25 in a line graph

    Table 2.25 Progress in rationalising the number of data items since the SBR program began
      At 30 June 2010  At 30 June 2011  At 30 June 2012 
    Initial number of data items in forms within the scope of SBR

    9,648

    26,537

    28,661

    Rationalised number of data items in SBR Definitional Taxonomy

    2,838

    5,923

    6,195

    Core system availability and stability

    SBR provides a set of shared capabilities that is used by agencies to deliver services to business. These capabilities were stable with the lodgment channel available 100% of the time except for scheduled outages.

    Use of SBR channel

    During the year, 3,555 business entities lodged a total of 22,493 returns and other reports via the SBR channel. Very strong growth in the last quarter and at the beginning of 2012–13 suggests that this trend will continue.

    Figure 2.2 SBR monthly usage 2010-12

    This figure represents the data found in Table below

     

    SBR monthly usage 2010-12
    Month Monthly
    Total 2010-11
    Monthly
    Total 2011-12
    July 3 4349
    August 4 5054
    Sep 12 1113
    Oct 15 596
    Nov 23 915
    Dec 28 537
    Jan 8 312
    Feb 46 579
    Mar 32 444
    Apr 105 808
    May 113 1369
    Jun 167 6422

    At 30 June 2012, 12 participating agencies had signed a memorandum of understanding (MOU) to participate in SBR, and about 400 reporting obligations could be met through SBR.

    Software vendors now offer SBR-enabled accounting and payroll software products that support a wide range of reporting obligations to the ATO. There are also a limited number of SBR-enabled software products that support financial reporting to ASIC and payroll tax reporting to state and territory revenue offices.

    The SBR channel not only eliminates the need to lodge paper forms, but is also a more streamlined channel than web-based electronic lodgment that requires the user to log on to an agency’s website, authenticate their identity and re-enter data. The SBR channel relies on AUSkey to authenticate the user’s identity.

    Even where businesses choose to continue lodging paper forms, the SBR channel has the potential to streamline reporting by enabling the business system to download information from the agency’s system – for example, to pre-fill forms.

    The year saw growth in both the number of software developers actively engaging with SBR and the products they support. At 30 June 2012:

    • 15 software developers offered SBR-enabled software products
    • 41 software developers were in the design, build and test phase
    • 44 software developers had registered for SBR but were not yet testing (see appendix 3).

    We are developing new self-help tools, the Taxonomy Information Management System (TIMS) and the Automated Taxonomy Testing Environment (ATTE), to enable software developers and agencies to maintain their own taxonomy content.

    Increasing agency awareness and engagement

    The ATO has decided to transfer lodgement services currently provided by the Electronic Lodgment Service (ELS), which is used by most tax agents to lodge tax returns, to SBR by 1 July 2015. Decommissioning of the ELS will commence a year later.

    A substantial body of work will be necessary to support this transition.

    Another major project, SuperStream, will see use of the SBR Definitional Taxonomy extended to business-to-business (B2B) transactions for the first time. SuperStream supports the Government’s Stronger Super reforms in response to the Cooper Review of the superannuation system, which advocated use of SBR-compatible data standards.

    Due to take effect on 1 July 2013, the reforms introduce new requirements for business in relation to employer contributions and transfers between super funds. While processing of these B2B transactions is outside the scope of SBR, use of e-commerce based on the SBR Definitional Taxonomy will be progressively mandatory from July 2013.

    We have been working closely with industry to finalise the SuperStream data standards during the year.

    We have also been working with Treasury and the Insolvency and Trustee Service Australia (ITSA), which is responsible for the administration and regulation of the personal insolvency system in Australia, to help ITSA understand SBR’s potential to streamline reporting. ITSA’s participation will depend on funding.

    In working with agencies, we encourage them to think in terms of reporting of data rather than lodging electronic versions of existing paper forms. To get the full benefits of SBR, agencies need to design for electronic reporting rather than making existing paper-based concepts fit the electronic channel.

    SBR governance

    The SBR Program has two formal governance bodies:

    • The SBR Program Board (of which the Registrar is a member), which provides overall guidance, endorses strategic plans, ensures the program remains within agreed scope and strategic intent, and where appropriate resolves strategic issues. It is chaired by the Program Sponsor, the Secretary to the Treasury, and meets quarterly.
    • The SBR Program Steering Group, which provides operational assurance and guidance for the program in relation to design, performance against project plans and financial plans, program outcomes, and resolution of cross agency issues. It is chaired by the Executive Director Markets Group, Treasury and meets quarterly.

    Challenges and where we are heading

    • Monitoring and refining the SBR system – to ensure that SBR continues to develop and deliver the benefits that it promises to the community.
    • Supporting agencies and software developers as the scope of SBR expands and new reporting taxonomies become available.

    More information

    More information on the SBR program is available at www.sbr.gov.auExternal Link

    Objections and appeals against decisions by the Registrar

    Objections

    If an applicant for an ABN or an ABN holder disagrees with certain decisions made by the Registrar of the Australian Business Register (ABR), they may lodge an objection under Part IVC of the Taxation Administration Act 1953.

    Objections can be lodged against the following decisions:

    • decision to refuse an application for ABN or an AUSkey
    • decision to refuse to cancel an ABN or AUSkey
    • decision to cancel an ABN or AUSkey
    • date of effect set for registration of an ABN
    • date of effect set for the cancellation of an ABN
    • refusal of an application not to disclose ABR details publicly.

    Objections must be lodged within 60 days of the date the decision was made.

     

    Objections, 2011–12
      Objections Total

    Outstanding objection at 30 June 2011

     

    24

    Received in 2011–12

     

    560

    Allowed

    212

     

    Disallowed

    164

     

    Withdrawn

    60

     

    No further action

    48

     

    Total finalised in 2011–12

     

    484

    Outstanding objections at 30 June 2012

     

    100

    Appeals

    Anyone dissatisfied with an objection decision, may:

    • apply to the Administrative Appeals Tribunal (AAT) for a review of the decision, or
    • appeal to the Federal Court against the decision.
    • An application to the Administrative Appeals Tribunal to review a decision:
    • must be in writing
    • must be made within 60 days after service of the notice of the decision
    • must set out a statement of reasons for the application
    • may be made in accordance with the prescribed form.

    An application fee is normally payable.

    The tribunal can confirm, vary or set aside the decision.

    • Last modified: 09 Dec 2013QC 442