Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download PDFDownload PDF 

Previous Fragment    
ECONOMICS LEGISLATION COMMITTEE
20/10/2010
TREASURY PORTFOLIO
Australian Bureau of Statistics

CHAIR —I welcome the Australian Bureau of Statistics. Mr Pink, do you have an opening statement?

Mr Pink —I think it is appropriate to recognise World Statistics Day today. This is the first time globally that the world community has recognised, through World Statistics Day, a UN initiative, the contribution that official statisticians throughout the world make to a better informed global society and the contributions they make in their own countries in informing and improving both public and private sector decisions. It has been a fairly low-key day here in Australia. But from watching some of the email traffic that has come through to me from our colleagues, particularly in Asia, I can see it has been taken very seriously by a lot of the developing countries in Asia. I think that is a great thing because the statistical communities in some of those countries have struggled to get recognition of the important role that statistics can play in their development. We have seen many of the countries in the Asia-Pacific region struggle to meet the expectations of being able to deliver statistical information and measures against the UN’s MDGs. Australia has been giving a large amount of support to many of the countries in the region. And so, on his first World Statistics Day, it really is very pleasing to see the extent to which governments in the region are taking the statistical contribution so seriously with the sorts of events that they are running in a lot of places. For instance, China are running a very big event at their world Expo today with people from around the world. I was invited but I realised that I had Senate estimates and it was more important to be here.

Senator CAMERON —Flattery will get you everywhere!

CHAIR —We on this committee are frequently asking for more information about particular issues, and all too often that information is useless without proper statistic analysis of it. So we on this committee do appreciate the contribution of statisticians. Thank you.

Senator PRATT —Your intro is a good lead-in to the questions I have in relation to the significance of getting our demographics are right. I understand that the ABS has been doing some work on problems in the midwest region of Western Australia with official Aboriginal population counts being inadequate. As I understand it, in some communities there are more Aboriginal children enrolled in school than there are Aboriginal people in the census and there are a range of problems there. Currently in the midwest the ABS is not using the same model for counting Indigenous people that it might use in the Kimberley or the Pilbara. Where are we at with that particular problem?

Mr Pink —I will answer at a general level and then pass to Mr Farrell to perhaps add some more detailed comments. It is certainly true that in the 2006 census, not only in Western Australia but in a number of areas around Australia, getting accurate counts of the Indigenous population was a challenge. It is one that we recognised. The postenumeration survey we ran after the census clearly demonstrated significant undercounts in some areas. I think perhaps the worst was the Kimberley region of Western Australia, but in a number of other areas as well. We are putting a lot of effort in this time in the lead-up to the census next year to try to redress some of the challenges that we found in 2006. In terms of the midwest in Western Australia, are we talking about the Pilbara region?

Senator PRATT —Geraldton and surrounds.

Mr Pink —I will pass to Mr Farrell, but I do not think we would be using different methodologies.

Senator PRATT —So it is the same methodology as the Kimberley and the north-west? I was told that they were using different methodologies because it had not been recognised as a high Aboriginal population area and therefore the ABS was using a different methodology.

Mr Farrell —I think the important thing here is that the measure of underenumeration is measured at the state level, not at the small area level. It is not really possible for us to adjust the data differently in different parts of the state.

Senator PRATT —Can you explain that? I would have assumed that in the Kimberley, for example, you have to find different ways of counting Indigenous people compared to how you would do it for people who live at a fixed address during the census.

Mr Lowe —Maybe I can shed some light on that. We certainly have different enumeration strategies for different populations groups and we have a particular strategy for Indigenous people in remote, discrete communities. In 2006, for a lot of Indigenous people living in the urban areas that you have mentioned, we relied on our mainstream enumeration procedures to pick them up. For 2011 we are actually changing that so that in urban areas where there are large numbers of Indigenous people we are putting in special strategies. We are adapting our mainstream strategies so that we can get a better outcome for those areas.

Senator PRATT —Is that going to address things like suspicion about why the census is collected and clearly inappropriate data collection methods?

Mr Lowe —This time around, one of our focuses has been on doing a lot of early engagement with Indigenous groups in places like those you have mentioned. We have been trying to sell to them the value proposition of the census—getting them involved and getting their buy-in. That has been very successful so far and I believe we will get better outcomes in 2011.

Senator PRATT —So that people understand that being on the census means that they can get better representation for government services that suit their need. What about particular strategies to help Indigenous people with what are quite complex forms so that people do not have to fill out their own forms?

Mr Lowe —Our strategy in remote communities has been to do an interviewer based collection. So we have people from the community who we train up that go around and actually interview people rather than use the self-enumerated questionnaire that most Australians do. For urban areas this time we will have people who will offer assistance and offer interviews in those areas where there is a high concentration of Indigenous people.

Senator PRATT —I look forward to the results. Thank you.

Mr Pink —I think another point that I might add there is that in that engagement with the Aboriginal communities we are trying to ensure that they recognise that the information is for them as much as it is about them. We are trying to encourage them to make good use of the information that they provide and to use it in the communities, as you said, to help them mount their cases for the sorts of services they feel they want and to do it with the data as an important part of their contribution in the census.

Senator PRATT —Good. That is terrific to know. I have already had conversations with groups to that end, so that is terrific.

Senator XENOPHON —I am sorry I was at another estimates hearing but I hope my colleagues wished you Happy World Statistics Day.

Mr Pink —Yes, they did; thank you.

Senator XENOPHON —Earlier this evening questions were asked in relation to the Foreign Investment Review Board and how the level of foreign investment, particularly in relation to agricultural land. is monitored or at least statistics compiled in respect of it and also in the purchase with respect to water rights, which is a highly contentious issue, particularly in the Murray-Darling Basin. It was suggested that the ABS has a fair bit of information in relation to it. Could you indicate—you may wish to take some of this on notice—to what extent can we get a fairly accurate snapshot of the level of foreign ownership of agricultural land and water rights in this country? I note, by comparison, there is a $231 million threshold before the FIRB can be involved in an approval process unless they are state owned enterprises. New Zealand has recently passed changes to the legislation where agricultural land of five hectares or more has to be subject to a process.

Mr Hockman —We do not specifically collect any data on that. We collect with a big focus on country data—by that I mean the country of the source of the funds et cetera. As it crosses the border we do not get data on transactions in secondary markets. I think I would have to take the detail of that, if we can actually elaborate on down to that asset class of land and agricultural land in particular, then we would have to take that on notice and investigate that for you.

Senator XENOPHON —So Mr Hockman if we wanted to get—and it is something I have discussed privately with Senator Williams—an idea of how many hectares of horticultural land, for instance, are controlled by overseas companies and how many megalitres of water rights  are owned by overseas entities, that is something that would be readily available through the ABS.

Mr Hockman —I do not think it would be readily available through the ABS. There is some work being done by my colleagues in the land and environment area on some experimental data—a series on land accounts. As far as I know, they have only had a look at that for one region of Australia looking at land use rather than land ownership.

Senator XENOPHON —We really have no idea, if we wanted to get a snapshot, of who owns what in terms of foreign ownership of land.

Mr Hockman —Not the ownership of land. The next place we might look for that sort of data is in Valuer-Genera’s data, which we are using for our data on affordability of housing et cetera and we are tracking transactions. That might be a source of that sort of data, but you have to be able to tie the transaction to the use.

Senator XENOPHON —If there is a trust behind the ownership, it may be quite difficult to find out where the ownership ultimately lies.

Mr Hockman —In fact that is where we run into difficulty on all of these asset classes. When collecting by industry, we find that we have data on the principal industry in which a company might operate, and so if you have investment trusts—that is a good example—they are probably in the finance sector even if they are very active in purchasing agricultural land.

Senator XENOPHON —So to quote Donald Rumsfeld: it’s a known unknown.

Mr Hockman —It is probably in the known unknown category.

Senator XENOPHON —From the government’s point of view, Minister, are there any plans to at least have better data on this to make policy decisions. I think FIRB took the view that if we were aware of a sudden concentration or an influx of ownership, even though it would not breach the $231 million threshold per transaction I think, they would then give advice to government. Given what the ABS has said, quite reasonably they just do not know what—

Senator Sherry —They did indicate, Senator. A report of the select committee made a number of recommendations on this, and it goes to rural, agricultural land and water and anything that the government would consider would be in the context of its response to those recommendations of that report. I do not know what stage that is at at the present time or when that response will be given. As I have indicated, I took it on notice earlier. I can only take it on notice and find out when that response is going to be provided.

Senator XENOPHON —I was hopeful that, given what FIRB told us about the ABS collecting all this data—maybe I misunderstood it—

Senator Sherry —I think it was me who raised the fact that ABS has some foreign ownership data.

Senator XENOPHON —I think FIRB said that the ABS has a role in collecting this data. I may be corrected by my colleagues, but I think that is the case.

Senator Sherry —I think I said it too. I invited a question to the ABS on this matter. But we will consider this issue in the context of the response to the committee.

Senator XENOPHON —Are you concerned about what appears to be a lack of adequate information?

Senator Sherry —I do not have responsibility for foreign investment and data collection. I used to when I was AT, but I am not AT; I am the representational minister, and I can only take it on notice and take it up. I assume the same delegations have been provided to the new AT, Mr Shorten.

Senator XENOPHON —Thank you.

Senator BUSHBY —What information does the ABS collect? I think I have asked questions along these lines before. These are slightly different. What information do you collect on the beneficial ownership of Commonwealth and state government securities?

Mr Hockman —Once again, we measure essentially at the initial transactions. The difficulty is in then tracking who the beneficial owners in the secondary markets are. What we track is institutional sector, but in that circumstance the institutional sector is just defined as ‘the rest of the world’ if, for example, you look at the foreign ownership of those things.

Senator BUSHBY —That is where I was going. Discussions with the AOFM at the last estimates indicated that they believed you had access to information that would probably allow you to identify the country of residence of most beneficial owners but that it was not information that you publicly released. Is that correct?

Mr Hockman —I do not think we have enough information to be able to do that across the entire issue. At the moment, we do not even do that down to the country, let alone the individual institutions within those countries.

Senator BUSHBY —Do you have the legislative power to do that?

Mr Hockman —I would have to take advice on that.

Senator BUSHBY —The AOFM do not, and I think they end up with about 60 per cent of the securities that they issue.

Mr Hockman —We certainly would not have the power when the beneficial ownership of those things are, effectively, being traded in markets outside of this country.

Senator BUSHBY —No—but what about the initial—

Mr Hockman —In the initial thing we certainly have reported to us whether the owner is domestic or foreign. We track those transactions and release the net flows that are going on each quarter in our financial accounts.

Senator BUSHBY —At what stage of the transaction would you actually collect that information?

Mr Hockman —We collect that as it is reported to us by the financial institutions as the initial transactions and initial transfers of ownership are occurring.

Senator BUSHBY —Do you take a sample or do you obtain that information from every purchaser of securities?

Mr Hockman —We take that from every known participant in those markets. They report to us either directly or through administrative means.

Senator BUSHBY —I not that you have just said that you are probably not able to identify the beneficial owner of every purchase of Australian securities but you do have knowledge of the beneficial owners in some countries. I note that to some extent you do publish details of country of ownership, but it is not to that full extent that, I understand, you hold information for. Is that correct?

Mr Hockman —That is quite likely, because of confidentiality restrictions as well.

Senator BUSHBY —Who decides which countries to publish and which not to?

Mr Hockman —I suppose at the end of the day it is probably the statistician’s decision.

Senator BUSHBY —Is it discretion guided by legislation or regulation? What criteria are used in making that decision?

Mr Pink —It would be based on the secrecy provisions of the stats act, which says that you cannot release any data that is likely to enable the identification of an individual business.

Senator BUSHBY —So in that respect potentially one of the reasons you might choose not to identify what percentage of securities are held by particular countries is because that could actually identify the holder of those securities?

Mr Pink —Yes.

Senator BUSHBY —I am looking at ABS document No. 6220.0, Persons not in the labour force, Australia, September 2009. I understand from that source that the number of persons not in the labour force at that time was about 5.68 million people. Of those about four million were classed as not wanting to work. What are the characteristics of the people who did not want to work? What do you look at to classify them under that heading?

Mr Farrell —The way that is determined is through a sequence of questions in the labour force interview that seek to identify whether a person has worked for one hour or more during the week prior to the survey. If the person indicates that they were not employed for one hour or more and that they were not seeking work then they would be treated as not being in the labour force.

Senator BUSHBY —At that time there were 5.68 million people not in the labour force. I have in front of me the flowchart you have in there that is quite useful.

Mr Farrell —Could you refer me to the part of the publication?

Senator BUSHBY —It is document 6220.0 Persons not in the labour force, Australia, September 2009.

Senator Sherry —Is this adults?

Mr Farrell —I have the publication here.

Senator BUSHBY —Of the 5.68 million people who are not in the labour force, you have a little box that shows that four million are classed as not wanting to work. I want to know what characteristics those people would have had that would have led you to identify them as not wanting to work.

Mr Farrell —They would have indicated that they had not been working for one hour or more in the week prior to the survey and that they were not actively looking for work.

Senator BUSHBY —Because underneath that you have then got those who wanted to work.

Mr Farrell —Some people wanted to work but did not actively look for work.

Senator BUSHBY —That is right. Then there are those who are not actively looking for work underneath that as well. You used that as one of the criteria to determine the four million who did not want to work.

Mr Farrell —That is right. So of those people who were not working and who were not looking for work some people would have liked to have worked but did not actively look—

Senator BUSHBY —So there is another criteria that you use to determine that they did not want to work at all?

Mr Farrell —The supplementary survey looks more deeply into the reasons and you are looking at there the results of that survey. There are a number of criteria, but I cannot tell you what they are off the top of my head.

Senator BUSHBY —If you could take that on notice, it would be appreciated.

Mr Farrell —I will take it on notice.

Senator BUSHBY —Is the unemployment rate methodologically consistent over long periods of time—that is, decades? Is it fair to compare directly the unemployment rate in the 1930s, when we had very high recorded rates, with rates published today, which are obviously much lower? If not, what has changed and when? I presume it comes down to different treatment of students and recipients of government pensions and things like that. Given the time, could you take that question on notice?

Mr Farrell —We will certainly take that on notice.

Senator BUSHBY —I would like to know what has changed over that period of time and to what degree you can actually compare current rates with past rates. What is the margin of error around Australia’s quarterly GDP growth rates?

Mr Hockman —The average revision over time is about a quarter of a percentage point, which is the same level of accuracy that government budget forecasts are generally prepared at as well.

Senator BUSHBY —I understand you are completing the 16th review of the CPI. Is that still on track for completion this year?

Mr Pink —Yes, it is; it will be completed in December.

Senator BUSHBY —The price of houses has a large impact on the cost of living of many Australians but house prices are not included in the CPI while rents are included. Is that something you are looking at as part of your review?

Mr Cullen —Yes, we are looking at the impact of housing prices on the CPI. We currently have in the CPI the cost of the dwelling but not the land. We are looking at whether we should have both the land and the dwelling. That will be part of our final outcomes.

Senator BUSHBY —That is it for me.

CHAIR —Any other questions will have to be placed on notice. Thank you once again for coming along on this auspicious day. We will see you next time round.

Committee adjourned at 11.01 pm