For the purpose of reporting under the Government’s portfolio budget statements framework, the ABR constitutes Program 1.3 of the Treasury Portfolio Budget Statement for the ATO, with the following objective, deliverables and key performance indicators.
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. AUSkey is a common authentication solution and SBR provides the development and management of the operating solution for businesstogovernment online services.
Maintain and manage the ABR, AUSkey registrations and systems including the integrity of the data and information.
Progress the ABR, AUSkey and SBR operating solutions as whole-of-government resources to streamline interactions between government and business.
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 the use of the ABR, AUSkey and SBR is reported against the following key performance indicators:
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 online using ABN Lookup, includes entity name, ABN, GST status, and in the case of charities and non-profits, their government-endorsed status. New national business names are being added progressively.
Government agencies at all levels can access more detailed, non-publicly available information on the register to support their programs. The scope of this data is currently being extended with the addition of geocoding of business addresses and by extending to branchby-branch details for business entities that operate in multiple locations. Funded under the Towards a better business future program this project is building an increasingly rich warehouse of data to support the delivery of public services.
The information will be particularly useful to many agencies including the Australian Bureau of Statistics, which draws on ABR data along with other sources to produce a wide range of information for business, research institutions, government agencies and the community as a whole.
Key outcomes for 2012-13
Growth in ABNs slowed in 2012–13 to 2.1%. This rate of growth is broadly in line with the GDP. The construction sector, for example, show a marginal decline in the number of ABN holders (-0.2%), following growth of 0.8% in 2011–12 and 5.8% in 2010–11.
With the support of funding from the TBBF program, we reviewed over 1 million ABN holders as part of our compliance and integrity work, with ABN cancellations more than doubling to almost 0.5 million, mainly due to Registrar-initiated cancellations rising from around 100,000 in 2011–12 to more than 350,000.
The slowdown in growth of ABNs over the past three years, culminating in growth broadly in line with movement in GDP in 2012–13, suggests that the integrity of the ABR is improving.
Public use of ABN Lookup to search for ABNs and other entity details increased sharply during the year, with website searches (essentially one-off manual searches) increasing by 27% and automated software searches increasing by 35%.
The number of partner agencies entitled to use ABR data increased by 36 to 423 over the year.
The total number of entities with an ABN grew by just 2.1% to 7,507,663 over the year, compared with an increase of 5.0% in the previous year.
The number of individuals with an ABN remained steady over 2012–13, after growing by 5.1% in 2011–12.
In the case of companies, there was growth in ABNs but at a slower rate than in the previous year, whereas the rate of growth rose marginally for super funds and trusts and significantly for partnerships.
There was a fall of 2.5% in the number of government entities with an ABN (See Figure 2).
Figure 2: Number of ABNs by entity type, three years to 30 June 2013
More detail on these figures is provided in table 4.1 in Appendix 5.
The change in the number of ABNs year on year reflects both the number of successful applications for registration and the number of cancellations over that year.
We received 695,487 applications for registration, a decline of 2.4% over the previous year, following an increase of 1.9% over 2010–11. Of these 695,487 applications, 92% were successfully registered for an ABN, compared with 82% in the previous year. Applications may be unsuccessful for a number of reasons including rejection due to the applicant not being eligible for an ABN or the same applicant submitting more than one application.
The number of registrations grew by 8.4% to 636,680 in 2012–13, following a decline of 2.4% over the previous year. Total registrations of super funds grew by 2.3%, trusts by 3.5%, partnerships by 5.8%, companies by 7.5% and individuals by 10.7%.
The number of cancellations more than doubled in 2012–13 to 485,242, with Registrar-initiated cancellations increasing from around 100,000 in 2011–12 to more than 350,000, while client-initiated cancellations were marginally down to 130,000. The high rate of cancellations is the result of our stepped-up compliance program (see Accuracy of ABR data).
The growth in the number of ABNs has slowed over the past three years (see Figure 3: Percentage growth in ABNs, seven years to 2012–13).
While growth in the number of entities with an ABN could be expected to broadly track the growth of the economy generally, the number of ABNs far outpaced growth in the gross domestic product (GDP) until 2012–13 (except for 2007–08 when growth in ABNs temporarily stopped with the start of the Registrar-initiated cancellations program).
Figure 3: Percentage growth in ABNs, seven years to 2012-13
More detail on these figures is provided in table 4.28 in Appendix 5.
Figure 4 compares economic growth and growth in ABNs, with the green line showing the gap between growth in ABNs and movement in the GDP in terms of percentage points for each year. The slowdown in growth of ABNs over the past three years, culminating in growth broadly in line with movement in the GDP in 2012–13, suggests that our compliance efforts are proving successful.
Figure 4: Comparison of percentage growth in ABNs with percentage growth in GDP, 10 years to 2012-13
More detail on these figures is provided in table 4.29 in Appendix 5.
Of the largest industry sectors by the number of ABN holders, ‘other services’ recorded growth of 7.0%, while accommodation and food services, financial and insurance services, health care and social assistance, and education and training all recorded growth of between 3% and 4%.
The construction sector recorded a marginal decline in the number of ABN holders (-0.2%), following growth of 0.8% in 2011–12 and 5.8% in 2010–11. Small declines were also recorded in professional, scientific and technical services (-0.5%), and transport, postal and warehousing (-0.7%), while manufacturing (-2.7%) and administrative and support services (-2.7%) declined significantly.
Around one-third of all entities with an ABN had an active GST role. The proportion of ABN holders with an active GST role ranged from 16.2% for super funds to 60.9% for government entities.
Just one in five individual ABN holders had an active GST role compared with around half of partnerships, trusts and companies.
A total of 4,180,036 changes were made to ABR records in 2012–13, an increase of 14.5% over the previous year.
Changes are made as a consequence of an ABN being cancelled or change of details such as address, associates, tax roles and charity status.
Some 72% of the changes were initiated by electronic lodgments of tax returns and statements to the ATO, less than 1% by paper lodgments to the ATO, 13% from other sources (mainly ASIC business name updates), and 13% as a result of manual updating by our staff as a consequence of direct interaction with ABN holders.
Only 1.3% of updates were made directly by ABN holders using their AUSkey digital key.
Registrants are required to update their ABR details within 28 days of any changes occurring. They can do this online via the ABR website (using their AUSkey), by calling the ABR, submitting a paper form or asking their tax agent to do it on their behalf.
Information from our survey work tells us that only about 60% of ABN holders were aware of this responsibility.
ABN registration applications can be made online at the abr.gov.au website or on a paper form. In 2012–13, 99.4% of applications were made via the website compared with 99.1% in 2011–12 and 96.2% in 2010–11. This increasing use of online applications represents a more effective and lower cost delivery of services.
Where an applicant satisfies the eligibility criteria and provides appropriate proof of identity they are generally issued with an ABN on the spot under an automated decision-making process. Otherwise the application will either be refused as ineligible or referred to a staff member for further checking and a decision.
We achieved a significant improvement against the service standard for processing registrations in 2012–13 with 55.6% of applications being processed on the spot and 94% of registrations being processed within 28 days (against a service standard of 93%, and up from 88.8% in the previous year).
Performance in the previous year had been adversely impact by the introduction of a new information technology system, with implementation issues now resolved.
As the single ‘source of truth’ for whole-of-government business registrations, the ABR’s integrity is vital for the national and state taxation systems, the superannuation system, the planning and delivery of government support and infrastructure for business, as well as business-to-business confidence and the wellbeing of employees.
The integrity of the ABR depends on ensuring the validity and accuracy of initial and continuing registration. This assurance involves both a compliance focus and data management focus.
Our compliance strategy is based on:
The program provides for a major improvement in community education to raise awareness of the role and benefits of the ABN and the eligibility requirements and risk-driven active compliance work involving large-scale contact with ABN holders via letters, desk reviews and field visits.
Entities such as companies, super funds and government agencies are generally entitled to an ABN as a matter of course, while individuals are only entitled to an ABN where they are carrying on an enterprise as a sole trader.
No amount of compliance verification work can achieve a high level of compliance with the ABN rules, including the eligibility rules, without a high level of community awareness and support.
Our communication objectives are to:
To overcome an apparent widespread lack of awareness and/or motivation in the community, we are leveraging off the influence and communication channels of government agencies with a role in regulating business and employment, intermediaries including tax agents and other business advisers and government-operated business support services.
Our messages through these channels cover the requirement for ABN holders to update their details on the ABR within 28 days of any changes. Our research indicates only about half of ABN holders are aware of their obligations to keep their ABN details up-to-date.
The implementation of a penalty regime for making false or misleading statements in applying for an ABN has sharpened the focus in this area. Our messages about the potential consequences will be included in communications; however, this will not be the primary focus.
In our consultations with tax professionals, the view has been expressed that more emphasis on education and awareness is needed before penalties become part of routine compliance responses. We have accepted that advice and are moving ahead on that basis.
During the year we developed a range of print and online communication products directed at prospective ABN applicants focusing on eligibility. These include advising people that they can’t be forced to apply for an ABN by third parties such as employers who want to avoid their responsibilities to their workers.
We are also alerting tax professionals to our increased compliance activities under the Towards a better business future program and asking them to help us maintain the accuracy of the ABR by encouraging and helping their clients to keep their ABR registration up to date.
We will also be undertaking media activities around the Towards a better business future field activities. As well as informing the community about ABR staff directly contacting business in specific locations, the media releases have provided information about the requirement for ABN holders to update their ABR entry when their details change and how ABR data is used by all levels of government to support planning, investment and service delivery.
In 2012–13, we refused 59,812 applications for an ABN from individuals, where the applicant was not entitled to an ABN. This is 30.5% more than the previous year. The rate of refusals has steadily increased over the three years to 2012–13. See Figure 5.
The construction sector accounted for 26.8% of refusals, and ‘other services’ 34.6%, similar shares to the previous year.
Figure 5: Number of refusals, three years to 2012-13
More detail on these figures is provided in tables 4.11, 4.12 and 4.13 in Appendix 5.
Our active compliance work for 2012–13 and following three years has two main components, the specially funded Towards a better business future and the business as usual program.
In 2012–13, we met or exceeded these targets:
On top of this Towards a better business future work, under the business-as-usual program we sent 204,109 letters to ABN holders advising that their ABNs had been cancelled. These cases were selected because evidence suggested they were not operating an enterprise.
In total we reviewed over 1 million ABN holders as part of our compliance and integrity work.
Active compliance work often involves matching with third party data such as ATO returns to identify entities that are no longer trading or have not traded.
As a result of learnings from these compliance efforts, work across the different contact channels will be more integrated in 2013–14 and beyond. Desk reviews and field visits will focus on particular geographic areas, creating an intensity and visibility of compliance activities among at-risk groups of ABN holders. This visibility helps raise awareness of ABN eligibility criteria.
To support this more intense compliance effort we are enhancing our risk management approaches and building workforce and systems capability.
Where opportunities present we collaborate with other agencies to make the best use of our compliance resources and achieve greater effectiveness and efficiency in our compliance work.
This mainly involves sharing intelligence and other information with the ATO’s tax compliance arms and in some cases conducting joint investigations where there are indications of more serious compliance risks. For example, we undertook a joint investigation with the ATO during the year into the activities of certain labour hire entities where there were, among other compliance issues, indications that workers were being pressured to apply for an ABN irrespective of the nature of the work.
To embed information sharing in our compliance processes we are developing referral channels with a number of government agencies, including, the ATO and Fair Work Building and Construction.
The number of cancellations more than doubled in 2012–13 to 485,242. Client-initiated cancellations were marginally down, while Registrar-initiated cancellations increased from around 100,000 in 2011–12 to more than 350,000 (see Figure 6).
We initiate cancellations (with or without giving prior notice to the ABN holder depending on the circumstances) where there are indicators that an entity is not entitled to an ABN, for example where the registrant has not reported income to the ATO for several consecutive years.
Individuals accounted for 86% of Registrar-initiated cancellations, almost all on the grounds that the individual was not in fact carrying on an enterprise. Companies accounted for 13.9% of Registrar-initiated cancellations. This followed the cancellation of the company registration by ASIC.
In terms of industry sectors, ‘other services’ accounted for 80,000 or 23% of Registrar-initiated cancellations, while 50,000 (14% of the total) were in the construction sector, up by 25% over the previous year. Other sectors in which there were large numbers of Registrar-initiated cancellations were professional, scientific and technical services, retail trade, arts and recreation services, and administrative and support services.
Of all Registrar-initiated cancellations, only a very small number resulted in a request for review of the decision by the ABN holder (see Objections and appeals against decisions by the Registrar).
Figure 6: ABN cancellations, three years to 2012-13
More detail on these figures is provided in tables 4.14 to 4.20 in Appendix 5.
A penalty can be imposed on someone who makes a false statement in relation to applying for an ABN (refer to PS LA 2012/4 Administration of penalties for making false or misleading statements that do not result in shortfall amounts). No penalties were applied in the 2012–13 year as the compliance work developed.
There are significant issues with some ABR entries in relation to the accuracy of their ANZSIC code. The ANZSIC classification is jointly managed by the ABS and Statistics New Zealand and forms the basis of the collection and analysis of statistics on economic activity.
Currently, when applicants apply online for an ABN, the nature of their business activity is captured in two data fields. The applicant must first nominate the main industry in which they operate from a drop-down box containing 21 options. This drop box, which forms part of the application process, is used to nominate the ‘main industry code’ (see Table 4.7 in Appendix 5).
Next, the applicant is asked to describe the main activity of their business in a free-text field, currently without any system prompts. This response is analysed by an autocoder that attempts to allocate an ANZSIC code based on the activity description, succeeding in about half of all applications. Where the autocoder is unable to allocate a code the application is referred for manual allocation of the ANZSIC code.
Currently, there are over 1 million ABR entries without a valid ANZSIC code, reducing the utility of ABR data.
We are addressing this shortcoming in two ways supported by Towards a better business future program funding:
Working with the ABS we are developing a more effective process for allocating an ANZSIC code as part of the application process. This is planned for implementation in a system change due by December 2013. When the applicant enters their business activity they will be given options that will allow them to select an industry description that is usable for autocoding. This is expected to improve the autocoding success rate from about 50% to close to 100%.
Existing ABNs without a valid ANZSIC code are being reviewed manually with priority given to those where the lack of a valid ANZSIC code may indicate broader compliance risks. This resource-intensive task is being undertaken over time. In 2012–13 we contacted around 34,000 registrants to check the accuracy of their ANZSIC code.
Snapshot: How do we decide whether to issue an ABN?
The Registrar’s decision on an ABN application is based on interpreting the ABN Act as it applies to the applicant’s specific circumstances as revealed in an automated application process.
Entities such as companies and superannuation funds are automatically entitled to an ABN.
An individual or partnership is generally entitled to an ABN if they carry on an enterprise in Australia (that is, undertake an activity in the ‘form of a business’ or ‘nature of trade’ and have a reasonable expectation that it will make a profit). But having an ABN doesn’t mean everything an individual does in the nature of work constitutes carrying on an enterprise rather than employment or something done as a hobby. For example, an individual could legitimately have an ABN for the purpose of operating a business, but also have a part-time job doing something else in the role of an employee. The fact they have an ABN doesn’t determine the legal status of a working relationship.
For individuals, the online registration process takes the applicant through a series of questions to establish their eligibility. In some circumstances the application may be referred to our staff for further checking before a decision is made.
Applicants who are refused registration may object to the decision. A person who disagrees with a decision to refuse their application may also seek an informal review of their entitlement. Before or as an alternative to lodging a formal objection.
If their objection is refused they may apply to the Administrative Appeals Tribunal for a review and/or lodge an appeal to the Federal Court (see Objections and appeals against decisions by the Registrar).
Before starting the application process, individuals can anonymously 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. Use of this tool is not linked to a specific application and the result does not affect an application.
The latest ABR survey suggests an improvement in the number of ABN holders who legitimately need an ABN.
The annual survey, conducted for the first time in 2012 by an independent research firm, measures the extent to which ABN holders still use their ABN, the currency and accuracy of key data fields, and the understandings and attitudes of ABN holders in relation to keeping their information up to date.
Our aim in sponsoring this and previous surveys is to assess the health of the ABR for the purposes of both reporting to the Minister and Parliament on the administration of the ABN Act and to give us a better understanding of how effective the Register is as a reliable source of information on Australian businesses.
The survey was carried out over the phone on behalf of the Registrar. Telephone contact was attempted with a sample of ABN holders, with the aim of interviewing the entity’s authorised contact person. There was a high non-contact rate – of the 7,129 ABN holders with whom contact was attempted, 1,504 were successfully interviewed.
In general, the results of this survey echoed those of previous surveys. However, caution is needed in comparing the latest results with those of previous surveys as the methodology has changed. More importantly, we recognise there are significant shortcomings in the survey methodology, and are exploring ways of overcoming these.
Despite these limitations the results are useful, particularly for identifying those aspects of the ABR that are more or less likely to be accurate – and for designing our responses accordingly.
Where interviews were held, 83% of respondents said they were still using their ABN, up from 75% in the previous year. However, this varied greatly across different entity types, from 76% and 78% of individuals and partnerships respectively still using their ABN, to more than 90% for all other entity types (see table 2.1).
While the questions asked in this survey to assess the level of accuracy of each ABR data field were different to those asked previously, a comparison of the results showed the following trends:
There was a statistically significant improvement in the reported accuracy of the ‘Legal/ main name’ field on the ABR from Survey 17 (91%) to Survey 18 (97%).
The level of accuracy of the ‘Business address’ field on the ABR also improved from Survey 17 (75%) to Survey 18 (80%).
The level of accuracy of the ‘Email address’ field on the ABR declined from Survey 17 (84%) to Survey 18 (80%).
The level of accuracy of ‘Business/industry activity’ field on the ABR improved from Survey 17 (89%) to Survey 18 (93%).
Addresses are less likely to be correct than other fields, possibly due to addresses changing more often than other business details – especially among individuals and partnerships.
* No equivalent question for contact name in previous survey.
As in previous years, this survey found that the accuracy of an ABR entry declines over time. The longer an entity has held an ABN, the more likely it is that their details are no longer correct. As the original entries on the ABR are now more than 12 years old this reinforces the need for effective strategies to get ABR records updated when an ABN holder’s details change.
Overall, 60% of respondents were aware of the obligation to update the ABR when details change. The level of awareness was significantly higher for trusts (73%), companies (68%) and superannuation funds (80%) than for individuals (50%), partnerships (55%) and government entities (44%).
Respondents who had previously updated details on the ABR (either on their own behalf or for a client) were asked how easy or difficult they found the process. Overall, 51% of respondents found the process to be easy.
Overall, 43% of all respondents were aware of AUSkey, with awareness significantly lower among individuals (23%) and partnerships (43%) than other entity types. Superannuation funds (75%) had the highest level of awareness of AUSkey.
Anyone can use the online ABN Lookup search facility (abr.business.gov.auExternal Link), which allows access to ABR public data including basic details such as entity name, ABN and GST status.
Website searches in 2012–13 were 27% higher than the previous year (see Figure 7).
Searches via the website (essentially manual searches) accounted for 30% of searches, with the remainder via web services functionality. Web services allow 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. Searches via web services increased by 35% in 2012–13.
ABR Lookup is hosted by the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education. The website was available for 99.7% of the time in 2012–13.
Figure 7: ABN Lookup searches, three years to 2012-13
More detail on these figures is provided in tables 4.22 and 4.21 in Appendix 5.
Agencies at all levels of government have access to non-public data on the ABR under conditions set by the ABN Act.
Agencies use ABR data for a wide range of functions including service delivery, licensing and registration, compliance and enforcement, grant funding, research and analysis, community consultation and education, disaster recovery and procurement.
Data is used in many different ways. For example, entity-specific data is used to help reduce compliance and administrative costs via pre-filling and validation of online forms while aggregated data is analysed in increasingly sophisticated ways for planning and delivery of services.
The number of partner agencies increased by 36 to 423 in the year to 30 June 2013, with 43 new local government partners and a small decline in federal, state and territory agency partners. These include 385 agencies that are eligible to access non-public data (see full list of agency partners in Appendix 1).
In providing agencies with access to ABR data, we continue to transition partner agencies to a standardised terms and conditions agreement, replacing an access framework based on a memorandum of understanding (MOU). During 2012–13, we converted 189 MOUs to a terms and conditions agreement, providing greater flexibility in the way that agencies access and use the data while ensuring that the legal requirements are met. As at 30 June 2013, 404 partner agencies were using a terms and conditions agreement.
Every year through an integrity program we review a sample of partner agencies to ensure they are storing, using and disposing of ABR data correctly.
Work on a range of data attribute improvements for the ABR commenced in 2012–13 under Towards a better business future budget funding. Specifically, data quality will be improved by introducing:
Geocoding involves adding the latitude and longitude to all business addresses, extending to premises-by-premises details for business entities that operate in multiple locations (such as retail chains). Details for each location will include contact details and an ANZSIC code specific to that location.
Applicants will be required to list all associates of the entity (including directors, company secretary and top 20 shareholders for unlisted companies, trustees and beneficiaries for closely held trusts), and proof of identity will be required for all associates. This information will strengthen the utility of the ABR as a compliance tool for government agencies.
These enhancements are expected to be implemented in a system change due by December 2013. From this point the new data attributes will be captured for new registrants. However, it will take time for existing records to be updated.
Currently, 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 use BDE.
As part of the next major system change due by December 2013, users will be able to access ABR data through a new online repository. This will allow them to more easily access and analyse the data, including the new geocoding, branching and entity associates data being added to the Register.
In 2013–14 we are looking to achieve further work in the following areas:
Case study one: ABR data helps Lockyer Valley recover from flooding
Two years on from the Queensland flood event of January 2011, lessons learnt and new processes have had a significant bearing on how the region would prepare for another major flood event
In an Australian first, Lockyer Valley Regional Council has laid the path for councils across Australia to better deal with the aftermath of a disaster, in particular the way in which properties are dealt with.
After being impacted by another major flood event over the 2013 Australia Day long weekend, Council’s Regional Development Team decided to overlay the ABR data with the rapid assessment maps from the Queensland Fire and Rescue Service to get a clearer picture of exactly which properties and businesses were affected and to what degree.
Part of the ongoing problem was that some businesses which received very little to no damage, but which were in the vicinity of a businesses that was heavily impacted, were labelled incorrectly as being flood affected.
The ABR data enabled the team to produce maps that provided a clear picture of the scale of the flood event and the impact on the region’s businesses. By enabling the team to identify the industries affected, the ABR data served as a valuable tool in planning economic recovery actions for the region’s economy.
The mapping also allowed the Regional Development Team to identify issues affecting local businesses and to provide targeted recovery assistance.
Case study two: ABR data helps identify employers without adequate insurance cover
WorkCover Queensland is a statutory authority which provides and manages workers’ compensation insurance for Queensland employers and their workers.
In Queensland it is mandatory for businesses who engage workers to have a WorkCover Queensland Accident Insurance Policy. This policy covers the employer for claim costs should an injury occur at their workplace. WorkCover also assists the injured worker with their rehabilitation and return to work.
Claim costs from a workplace injury can be substantial – extending to hundreds of thousands of dollars, and if an employer doesn’t have the required cover, they would be leaving themselves or their businesses at risk. Uninsured businesses are responsible for reimbursing WorkCover for both statutory and common law claims costs and they may be liable for a penalty of up to 50% of those costs for not having a policy in place.
Through a sophisticated compliance program which incorporates extensive data matching and data mining activities, WorkCover is able to identify businesses that are either uninsured or underinsured. A data sharing arrangement with the ABR is part of this program, and WorkCover has recently started an initiative to match ABNs issued against those ABNs associated with WorkCover policies.
ABN holders who don’t have a WorkCover policy are contacted to advise them of their obligations to insure under the Worker’s Compensation and Rehabilitation Act 2003. This is particularly aimed at those ABN holders/employers who are engaging workers as defined under the Act.
As a result of this initiative, 4,400 policies have been taken out in the current financial year to May 2013. This means that these 4,400 employers now have insurance to cover them for the costs of any work related injuries, including weekly compensation and medical expenses for their injured worker. It also means the worker will receive assistance from WorkCover in their rehabilitation and return to work.
By using this data sharing agreement, WorkCover has raised awareness of the importance of accident insurance policies, not to mention the legal requirement on employers to have this insurance. Ultimately, the goal is to ensure that all workers in Queensland return home safely at the end of each day, and that businesses do not have to bear the costs that result from workplace injuries.
This initiative is a clear demonstration of the benefits which can be achieved from data sharing between government organisations. ABR data will continue to inform WorkCover’s compliance program to educate employers on their obligations.
Case study three: Monitoring industrial chemical use with the aid of ABR data
The National Industrial Chemicals Notification and Assessment Scheme or NICNAS is the national regulator of industrial chemicals introduced for commercial purposes within Australia.
All importers and manufacturers of industrial chemicals in Australia are required to be registered with NICNAS under the Industrial Chemicals (Notification and Assessment) Act 1989.
NICNAS uses the ABR as well as other information sources to identify potential introducers of industrial chemicals.
A compliance monitoring project using ABR data identified approximately 150 potentially unregistered manufacturers of industrial chemicals. NICNAS will now engage with these companies to determine if their business activities fall within the scope of the Act and to help them meet their legal obligations if required.
As well, the NICNAS is using address details in the ABR to contact businesses for the purposes of awareness raising, registration, compliance and debt recovery activities.
Case study four: ABR data for disaster response and recovery
In response to the number of natural disasters recently experienced in Australia, we are improving the way we provide ABR data to government agencies with responsibility for disaster prevention, preparation, response and recovery.
The ABR data for disaster response and recovery project is working with agencies at all levels of government to develop a streamlined process for the provision of ABR data when disasters occur. The objective is to embed a process that can be readily activated to engage with agencies at the time of natural disasters and provide the right data, at the right time, to the right people.
ABR data has already been used by government agencies to help communities affected by emergency events and natural disasters.
For example, ABR data was used after Victoria’s 2009 bushfires to identify businesses impacted by the fires, so they could be provided with information on government assistance programs. The ABR’s postcode and industry coding information was used to identify businesses that could potentially assist with reconstruction work.
In January 2013 data was provided to local, state and federal agencies to support recovery from bushfires in Tasmania and floods in Queensland. In these regions, the ABR data is assisting with reporting and planning of recovery activities and government support.
These events highlighted the need to engage with government agencies before disaster strikes to help them understand how ABR data can be used to assist with disaster response and recovery. We want to move on from the current ad-hoc approach to take on a more proactive systemic approach where ABR data is seen as a whole-of-government resource for responding to emergencies and natural disasters.
While ABR data has previously been used to support disaster recovery functions, a range of ABR data can be used to support all phases of disaster management – planning, preparation, response and recovery.
For example, ABR data can be used to help identify businesses for hazards detection, warning communications, community education and engagement, and targeted relief and assistance.
We have been consulting with federal, state and local government agencies to understand how ABR data can be of benefit and how we can provide the data to best support their needs. Recent meetings with agencies have indicated a high level of interest and support – particularly in the geocoding of businesses that will enable more accurate identification of businesses in affected areas.
Previously many government agencies simply relied on local knowledge, unaware that ABR data can provide them with a better understanding of businesses in disaster-affected areas.
Working closely with key internal and external stakeholders, we are developing streamlined methods to provide critical business information to government in the event of a disaster or emergency. This includes leveraging off a broader project to develop a website-based portal to provide direct online access to ABR data for our government agency partners. The portal will incorporate specific functionality to support disaster management processes.
If an applicant for an ABN or an ABN holder disagrees with certain decisions made by the Registrar of the ABR, they may lodge an objection under Part IVC of the Taxation Administration Act 1953.
Objections can be lodged against the following decisions:
Objections must be lodged within 60 days of the date the decision was made.
Before, or as an alternative to lodging a formal objection, a person who disagrees with a decision by the Registrar to refuse an application or cancel a registration may seek an informal review of their entitlement. We are working with our ATO service providers to ensure we provide people with the most effective and efficient way of questioning entitlement decisions.
Outstanding objections at the start of year
No Further Action
Outstanding objections at end of the year
There were no appeals to the Administrative Appeals Tribunal (AAT) or the Federal Court during 2012–13 in regard to objections that were disallowed against reviewable ABN decisions made by the Registrar.
AUSkey is a whole-of-government authentication solution that simplifies how businesses interact electronically with government – by providing a single digital key to access government online services. In July 2010, the Government appointed the ATO and the Department of Innovation, Industry, Science and Research as joint lead agencies for the provision of authentication services for both business-to-government services and government-to-government services, with Innovation’s – VANguard Service providing TrustBroker services for all AUSkey authentications.
AUSkey’s 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. It reduces business costs by providing cost effective, secure and easy to use access to online services through sharing common authentication infrastructure and support services across government.
The number of active AUSkeys grew by more than 11% to over 830,000.
Use of AUSkeys to authenticate government services grew by 21%.
21 government agencies have adopted AUSkey as their authentication solution for 34 online services at 30 June 2013, compared with 15 agencies and 24 services a year earlier.
We are working with another 13 agencies to implement AUSkey authentication for their online services.
AUSkey has continued to demonstrate strong growth since its introduction in May 2010. There were 416,678 entities with an AUSkey and 834,741 active AUSkeys at 30 June 2013, an increase of 11.1% and 11.0% respectively over the year (see Figure 8). (An active AUSkey is one that has neither expired nor been cancelled.)
AUSkeys were used to authenticate government services over 38 million times in 2012–13, a 21% increase over the previous year.
The number of online services accepting AUSkey has progressively increased.
Some 61.5% of entities for which an AUSkey has been issued have a single AUSkey, 21.8% of entities have two AUSkeys and 16.7% three or more AUSkeys – see Table 4.23 in Appendix 5. (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 the entity, so that an entity can have more than one AUSkey.)
The flow of online service authentications over the year primarily reflects ATO lodgment cycles. There was also continued growth 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.
Figure 8: Number of active AUSkeys by entity type, two years to 30 June 2013
More detail on these figures is provided in table 4.23 in Appendix 5.
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 Financial Security Authority (previously known as the Insolvency and Trustee Service Australia), the Department of Education, Employment and Workplace Relations and the Department of Immigration and Citizenship.
Agencies are adopting AUSkey for a range of reporting requirements including SBRenabled lodgments (see SBR).
Currently, 13 agencies are working to implement AUSkey as an authentication solution for their 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 to encompass support for a broader range of government services that include industry, education, community services, environment and natural resources programs.
As well as business-to-government reporting, the new services include governmenttogovernment 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 into production.
In May 2013 AUSkey was granted Gatekeeper accreditation for the SBR community of interest. Gatekeeper accreditation provides assurance that AUSkey is compliant with whole-of-government policy. Gatekeeper accreditation represents formal recognition by the Gatekeeper competent authority (AGIMO) of our competence in administering AUSkey for the SBR community and for agencies that are considering its use as an authentication solution for new and existing online services.
The online registration process (now integrated with the ABN application) 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.
Informal feedback from users and participating agencies has been generally 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 system compatibility issues are addressed and resolved.
However, there are challenges in supporting AUSkey for all conceivable mixes of computer operating systems and web browsers, particularly given that these are constantly evolving. We are looking to improve the process for users who currently experience difficulties in downloading and installing AUSkey. This occurs sometimes due to a conflict between operating systems and other standard third-party software being utilized by AUSkey.
Case study: AUSkey
Online service for bankruptcy notices
In February 2013, the Australian Financial Security Authority (AFSA) – previously known as the Insolvency and Trustee Service Australia – implemented a new online service for the issue of a bankruptcy notice.
This service enables creditors to securely log on with their AUSkey to the AFSA’s online services and submit an application for the issue of a bankruptcy notice.
The online services allow creditors to lodge and verify information in notices in real time and upload supporting documentation in addition to tracking the progress of their application. These new services have delivered significant improvements and efficiencies in information quality to provide easy to use, flexible and consistent services for business creditors and the AFSA.
The AFSA is planning to release other AUSkey enabled online services in 2013–14.
SBR is a whole-of-government initiative that aims to reduce the burden of business-to-government reporting. SBR provides electronic reporting through a standard language and an online gateway using AUSkey (see AUSkey) as the authentication solution, for use in commercial software and agency business systems.
The program, which became operational on 1 July 2010, allows businesses to lodge a range of reports to 12 Commonwealth, state and territory agencies.
The program’s scope of work includes providing policy advice and strategic planning for SBR, developing and hosting SBR’s infrastructure, and 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).
Two current initiatives will increase the benefits SBR provides to its users and increase its adoption by business:
Development of the Definitional Taxonomy (see next section) in the four years to 30 June 2013 has seen over 33,500 data elements rationalised to approximately 6,600 – that is, for the forms that have been included in the scope of SBR there has been a reduction of over 80% in the number of data elements that need to be described and coded in reporting software.
Use of the SBR online gateway increased sharply during 2012–13, with more than 148,000 reports lodged, about seven times the number in the previous year.
The increasing availability of SBR-enabled software has been instrumental in the growth of SBR. The number of commercial software developers licensed to develop SBR has increased to 128 (from 85 at June 2012), with 34 self-certified under conditions established by the SBR program, to have product in the market.
The Government consolidated administration of the SBR Program by relocating the SBR policy and strategic team from the Treasury to the Registrar of the ABR. The change was made to improve information sharing and stakeholder engagement and ensure more efficient use of resources.
A key part of the work in the SBR program is developing the taxonomies that define the data items (the Definitional Taxonomy) and the reporting structures (the Reporting Taxonomy). The taxonomies are dictionaries organised hierarchically rather than alphabetically.
SBR taxonomies provide standard data definitions, so that business and accounting concepts such as ‘asset’, ‘income’ and ‘employee’ have the same meaning when used by the reporting business systems as when being processed by different government agencies.
The data elements are defined once and reused across multiple forms and multiple agencies. This minimises the work required by software developers to interpret government legislation when developing their products.
The SBR Definitional Taxonomy was further developed during the year, with a continuing program of work to identify, consolidate and rename duplicate data items across agencies and reporting forms. By 30 June 2013, the number of data elements had been reduced from over 33,500 (unharmonised) to approximately 6,600 (harmonised) – see Figure 9.
The usefulness of the SBR Definitional Taxonomy has been enhanced through the development of the Australian Reporting Dictionary (ARD), an online tool which presents a searchable and easy to understand view of the taxonomy’s business reporting terms and their definitions.
As well as widening the utility of the SBR taxonomy beyond those with technical ICT knowledge, the plain English ARD addresses concerns about the ever-increasing number of terms arising from new reporting requirements on business. User testing of the prototype commenced in February 2013, with the production version going live on 1 July 2013.
At present, the ARD represents the current SBR taxonomy, but is expected to quickly evolve to include definitions from other agency reports across all levels of government. The ARD will promote understanding of information already being reported by business, which will in turn facilitate the re-use of terms wherever possible when designing new legislation.
Figure 9: Rationalisation of the number of data items since the SBR Program began
More detail on these figures is provided in table 4.30 in Appendix 5.
The use of SBR by business increased sharply in 2012–13, with more than 148,000 reported lodgments, compared with approximately 22,500 for 2011–12 (see table 2.4). During the year:
More than 2,200 entities (including intermediaries) lodged 17 distinct form types.
Reports were received for six of the 12 participating agencies, including the first successful lodgments of Victorian and Western Australian monthly payroll tax returns, the first financial report to the Australian Securities and Investments Commission, and the first SBR lodgments of the following ATO reports: trust tax returns, partnership tax returns, self managed super fund annual returns and family trust election revocation and variation reports.
Activity statements, pay as you go reports and tax file number declarations lodged to the ATO accounted for the vast majority of SBR lodgments. Other lodgments, including those to state revenue offices, remained modest.
Activity statement lodgments increased steadily, mainly via tax agents and BAS agents, while lodgments directly from businesses remained low. A wider range of software products were used to lodge activity statements.
As well as lodgments, the SBR channel supports a range of information transactions including listing of reporting obligations, pre-filling of fields in reports using data already held in agency systems, and pre-submission validation of reports. There were more than 225,000 successful information transactions over 2012–13.
The increasing availability of SBR-enabled software has been instrumental in this growth (see Software developer engagement).
Figure 10: SBR monthly usage 2010-13
More detail on these figures is provided in table 4.27 in Appendix 5.
Excluding scheduled outages, the SBR online gateway was available 100% of the time during 2012–13. This has remained the case since July 2011.
The Stronger Super measures, announced in September 2011 in response to the Cooper Review of the superannuation system, include the SuperStream project, which is designed to improve the ‘back office’ efficiency of superannuation processes.
SuperStream extends use of the SBR Definitional Taxonomy and messaging standards to business-to-business transactions for superannuation fund rollovers, member contributions and member registration. In addition, SuperStream provides for SBR’s online gateway to be used in enabling services in support of these business processes. SBR standards will be used for information transactions for rollovers between superannuation funds from 2013–14 and for member contributions from the following two years.
The standards are backed by regulations made in early December 2012, and the Superannuation Data and Payment Standards 2012 Legislative Instrument, which was registered on 11 January 2013, following public consultation. The legislative instrument is supported by an explanatory statement and other documents that outline how the standards are to be implemented.
This has given the industry sufficient lead time for systems development before the first tranche of the mandated standards take effect on 1 July 2013 in relation to APRA regulated funds.
The reporting taxonomies for rollovers and contributions were released as final versions in March 2013. The final taxonomy, when combined with the published schedules and other supporting documentation, will enable software developers and industry to develop the products and systems necessary to adopt and conform to the standard.
The SuperStream reforms have provided SBR with the opportunity to further reduce costs for business by adopting the ebMS3/AS4 messaging standard. This international standard, managed by the Organisation for the Advancement of Structured Information Standards (OASIS), sets out how to exchange messages between multiple trading partners. Adoption of this standard would extend the existing SBR offering and facilitate additional functionality, including support for synchronous messaging and handling of bulk transactions.
The SBR Steering Group has agreed in principle to adopt ebMS3/AS4 as the messaging standard for SBR. The potential benefits include a single messaging platform and method for the SuperStream and ELS to SBR projects, with reduced costs for software developers.
The Commissioner of Taxation announced in 2012 that the ATO would transition its ELS to SBR by 1 July 2015. We are working with the ATO to ensure a smooth transition.
ELS, which is used by tax agents to lodge about 20 million returns and other forms a year, is now over 20 years old and provides an overlapping and competing lodgment service to that offered by SBR. The transition to SBR is likely to result in a significant increase in use of the SBR national gateway.
The active participation of software developers and tax agent clients is critical to the project’s success. As use of SBR increases:
The SBR Program worked with the Australian Government Information Management Office in 2012–13 on the adoption of the SBR messaging standard as a whole of government standard. The proposal is scheduled to be considered for endorsement later in 2013.
In other developments:
To canvass options for the use of SBR for lodging financial reports to ASIC, including whether its use should be mandatory, the Government released a discussion paper (Use of SBR for financial reports) for public consultation. Twenty-four submissions, with a range of views on the issues, were received.
Positive signs have emerged, including at the Council of Australian Governments (COAG), that states and territories will be giving higher priority to investigating the potential use of SBR within their jurisdictions. We convened an all-day symposium for state and territory central agency representatives on 18 March 2013 to identify opportunities for the wider use of SBR.
Work is underway in several jurisdictions to assess the benefits of adopting SBR or other forms of online reporting. For example, the Queensland Government has completed a review of agency reporting obligations, and is considering whether SBR can be extended to other areas of reporting beyond the payroll reporting currently in scope.
We contributed to the development of proposals for COAG’s new reform agenda of reducing reporting burdens on business and encouraging wider use of SBR by the states and territories. The Red Tape Challenge has been identified by COAG as a priority area of regulatory reform, and the wider use of SBR is seen as a key tool in addressing the business reporting burden problem.
The number of commercial software developers licensed to develop SBR products grew from 85 to 128 over 2012–13, with 66 actively testing, and the number self-certified for one or more SBR reports doubled to 34.
This growth is in part due to the superannuation industry’s response to the progressive introduction of SBR as the standard platform for superannuation transactions under the SuperStream reforms.
Further development and support of SBR-enabled products by software developers is central to increasing use of SBR.
We continue to liaise and engage with software developers to help them incorporate SBR into their software as efficiently as possible.
Figure 11: Number of software developers engaged with SBR to 30 June 2013
More detail on these figures is provided in table 4.31 in Appendix 5.
The 2013–14 Budget provided additional funding to enhance SBR and reduce compliance costs and the regulatory burden for businesses and their intermediaries. This is being used to:
Case study one: SBR transforms BAS agent’s busy bookkeeping practice
In a year that has seen a strong increase in the use of SBR – more than seven times higher than the previous financial year – BAS agents have emerged as enthusiastic early adopters.
A Newcastle-based BAS agent has found that SBR-enabled software is transforming her busy BAS agent practice and changing the way she works with clients.
She says SBR is so easy to use and saves time.
Gone are the days of having to manually input data into the BAS agent portal, print off the activity statement, attach a letter and mail it to the client.
From pre-filling the reports through to lodgment, everything is automated.
Her SBR-enabled software provides an automatic declaration at the bottom of the activity statement, which she then electronically sends to her client so the information can be verified and approved.
She says since using SBR there have been no delays in receiving the signed declaration from her clients which saves her valuable time in follow up.
This BAS agent is so delighted with SBR she is now actively promoting its virtues to her local network of BAS agents. She says it’s very affordable and a ‘must-have’ for busy BAS agents practices.
Case study two: Standard Business Reporting (SBR) – a good return on investment
Using key SBR capabilities has enabled one of Australia’s leading financial institutions to transform the way it reports to the Australian Prudential Regulation Authority (APRA), resulting in increased speed of preparation of reports, reduced costs and delivering real-time business intelligence for internal reporting.
At the heart of SBR is a common data dictionary, or taxonomy, that provides a single definition for each term used in government reports. The taxonomy uses eXtensible Business Reporting Language (XBRL), a machine-readable reporting language.
XBRL is the language of SBR. It works by tagging each item of data (a little like an electronic barcode), so that it is understood by computer systems; meaning that the data can be validated, analysed or compared. Data becomes more accurate and useful to businesses that are better able to undertake comparisons across the company and reporting periods; even if they are using different business systems.
These tools help automate the preparation of reports to government. The information businesses need to report is clearer and more consistent with the records kept for their own purposes, which means less time and effort assembling and analysing information needed to meet reporting obligations.
The financial institution submits 10 reports a month to APRA, plus another 41 every quarter – a process which previously took staff several days of effort. Now this process has been reduced to a matter of minutes. It also makes it easier to check the source for all reported data.
If APRA has any questions, the financial controller can easily produce a report containing all the relevant data by simply clicking on the item in question.
The use of SBR’s capabilities has provided the financial institution greater confidence in the integrity of the data, improved auditability, transparency and consistency.
But the financial institution believes that the largest benefit is the ability to transform its internal reporting, supporting more efficient executive decision making.