The Australian Business Register: free data to help your local government

Speech by the Commissioner of Taxation and Registrar of the Australian Business Register, Michael D'Ascenzo to the Australian Local Government Association, National General Assembly at the National Convention Centre, Canberra,
18 June 2012

I would like to pay respect to the traditional and original owners of this land the Ngunnawal people - to pay respect to those that have passed before us and to acknowledge today's Aboriginal community who are the custodians of this land.

Introduction

When former United States Speaker of the House 'Tip' O'Neill first famously declared that 'all politics is local', he was making the point that a politician's success is often directly tied to their ability to understand and influence the issues of their constituents.

Throughout the Assembly you will probably have had a number of speakers emphasise this point. Some will refer to 'grass roots' issues, others will talk about the things that affect people at 'the coal face'. But regardless of their terminology, they all really mean the same thing - that issues of local and personal impact are things that matter.

As local government representatives you will understand that acutely. Local government is a pivotal player in the Australian economy. Australia's councils employ nearly 180,000 people and have nearly $250 billion in assets. Your expenditure of $28 billion annually, equivalent to around two per cent of GDP.

Local Governments understand the importance of delivering locally, and the difference that makes to people in their day to day lives.

With that in mind, I am here with my Australian Business Register (ABR) hat (a separate responsibility of my role as Commissioner of Taxation) to discuss how we can work together to enhance the performance of your local government's business operations through the use of the ABR.

The ABR is an extensive database of identity information provided by businesses when they register for their ABN - Australian Business Number - which also acts as their unique identifier. The ABN and ABR make it easier for businesses and all levels of government to Communicate and deal with each other.

The ABR was initially introduced as a whole-of-government resource to streamline business-to-government interactions. Streamlining these interactions is a key objective of the government's broader economic strategy, and the ABN will help lead to a more efficient digital Australia. The Standard Business Reporting program provides further support for this approach and is itself dependent on a reliable unique identifier like the ABN.

While we continue work to assure the ABR delivers on its objective of a more efficient digital Australia, the ABR's potential and purpose is substantially broader than just this. The Australian Business Register offers you an authorative, free and reliable tool to conduct compliance checks, improve your service delivery, plan local infrastructure and grow business in your region. This is why over 350 government partners receive, use and enjoy the benefits of the ABR.

The ABR has more than 7.2 million active ABNs. This is an enormous database of business identity information available freely to eligible government agencies to help them achieve their business and social objectives.

The ABR data is divided into public and non-public data. Anyone can access publicly available information such as a business' GST status from the ABR via the 'ABN Lookup'. On average there are about 20 million searches a month verifying details of a business using the ABN Lookup Service.

Eligible government agencies, like your local council, can also gain access to data not available in the public domain.

With access to non-public data, government agencies can locate further details about a business entity such as its postal and email address, and the names of its public officers, directors and trustees.

Over 200 local government agencies are already enjoying free access to the ABR data, using it for planning purposes to check compliance issues and/or the integrity of the data provided, to conduct research, and to improve service delivery. As you can imagine, the efficiency gains for these agencies and the compliance cost benefits for business are substantial.

Below are some possible uses:

The Black Saturday firestorms of February 2009 illustrate a grave but significant example of how the ABR data can help local government and communities. The bushfires severely impacted 78 Victorian communities and took a deadly toll. In addition to the tragedy of the lost 173 lives, 2,029 homes and 61 businesses were destroyed. Having access to ABR data allowed the local councils to quickly identify and contact businesses within specific areas affected by the destructive firestorms, and this supported economic and social development programs that benefited the community. The ABR played a part in helping local communities recover from a devastating natural disaster. For example,

Two ABR partner agencies, Whittlesea City Council and Nillumbik Shire Council were able to respond more rapidly to the emergency because of quick access to the ABR data.

Whittlesea City Council used the ABR's postcode and industry coding information to identify tradespeople who may be able to assist with reconstruction work in the local community, and developed an online resource of over 150 local businesses.

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.

Research and analysis

The ABR can be used in other ways to assist local councils. For example, the research and analysis function allows you to use industry coding to identify trends in your region.

In another real life case study, Manningham City Council uses the ABR data, together with our ABR query tool, to save money and build a clearer picture of business in their region. The query tool enables agencies or councils to pick apart specific ABR data for their business needs. It is an efficient way to slice and dice the data which is relevant to them without having to sift through vast quantities of unnecessary material.

Before using the query tool the Manningham Council knew the basic makeup of their region but were unable to use ABR data to its full potential. The query tool allowed efficient and effective data analyses, and put them in good stead for future economic profiling. The council has also been able to incorporate the data from the ABR query tool into their geographic information system enabling them to visualise and analyse the information so that it can be layered over a map of the council area and users can see where a business is physically.

Looking at the regional geospatially allows them to more accurately identify where businesses are located, helping with infrastructure planning and compliance in their region.

Planning and economic development

Another useful application of ABR data is in planning and economic development, where the ABR allows you to plan for future business growth and in identifying industry clusters.

Back in 2008, Liverpool Plains Shire Council started using ABR data to support their planning. At that time it was projected that there would be a two-fold population increase in their area within the next 15 years.

The expected surge in population prompted the council to seek new ways to forecast increased business activities in the area.

One of the solutions has been to use Australian and New Zealand Standard Industrial Classification (ANZSIC) coding and descriptions, and postcode details from the ABR to identify new businesses in their council area.

Comparing their data sets over time allows them to monitor industry trends in their region. This analysis allows the council to plan for growth in specific industries. They are also using the ABR data to complement data from other sources, giving the council a more accurate profiling of the businesses in the shire.

Education and communication

In the area of education and communication, the ABR allows local governments to connect and consult with businesses about their business support services and regulatory requirements. The Sutherland Shire is just one of the councils who have used the ABR data in this way, in addition to using it to help stimulate economic growth and to create jobs in their area.

There are about 52,000 businesses in the Sutherland Shire Council area and about 43,000 of these are home-based businesses.

For the last four years, the council has been using email addresses contained in their ABR data extracts to survey home-based businesses about their needs and how the council can assist them.

Email provides the council with a low cost option for dealing with rate payers and allows recipients to respond easily and quickly. The survey aims to ensure that local businesses are getting the help they need to grow and succeed.

Analysis of the surveys conducted by council in recent years indicates that one in seven households operate some form of Home Based Business.

As a result, Sutherland Shire Council established the Home Based Business Network in response to feedback received from home based business owners in 2010. Approximately 100 businesses are currently registered with the network which meets on a quarterly basis. Each Home Based Business Network session is free and incorporates a short educational presentation to enhance business skills and knowledge.

In another example, Auburn City Council is using ABR data for Community consultation about the National Broadband Rollout. There are a range of challenges for Auburn City Council in ensuring the widest possible consultation is undertaken within their culturally diverse community. They said that "without the ABR data, it would be extremely difficult to consult with such a large range of organisations". Use of ABR data facilitates the achievement of enhanced community and business consultation and helps us all garner the benefits of the National Broadband.

Licensing and Registration

The ABR data is also being used by government agencies to pre-fill online forms and validate completed forms. This is particularly useful in supporting licensing and registration functions.

As we encourage a more efficient digital Australia, we have the opportunity to make interactions with businesses easier, electronically pre filling ABR data into online forms. This makes it easier for Business to interact with your council and has benefits for both the council and the business.

Pre filling data enhances accuracy and avoids duplication, it provides confidence that the ABN being used is valid and is the correct one for the entity.

Procurement and Grants

In the area of procurement and grants, access to the ABR has helped the Gold Coast City Council make significant improvements to their processes, including fast payments to businesses and a reduction in community-funded operating costs.

The council is the second largest in Australia, and efficient customer and supplier transactions are critical to the smooth running of the council's accounts payable function.

The Brisbane City Council has also made significant improvements in their procurement area using ABR data to assist with spend analysis.

• They use the ANZSIC Industry coding provided through the ABR data to classify and categorise suppliers for detailed analysis of the councils purchasing patterns.
• This analysis allows them to take advantage of the Councils' aggregated spend, with effective analysis of this leading to improved sourcing and supplier management, increased purchasing power and better decision making.

In turn, this work has lead to improved efficiency, significant cost savings and has assisted the council to meet their objectives of reduced procurement costs while maintaining the value of the goods or services purchased.

Compliance

The City of Salisbury uses the ABR data to check an entity's details and confirm address information for sending notices in relation to legislative compliance. This ensures the notices are sent to the correct legal entity.

The ABR data also provides details about an entity's Director and associates information and is used to locate them for recovery of unpaid rates.

This council also uses the ABR data for compliance and audit processes of tender submissions, verifying the ABN details of an entity and ensuring details provided are valid and correct. In fact it is a mandatory requirement 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 prior to the awarding of contracts. Previously all checks were made through commercial information brokers.

Fairfield City Council have recently begun using the ABR data to identify and verify entity details to ensure rates rebates or exemptions are fairly applied.

They use the industry code to identify businesses that may be receiving agricultural rebates. They also check entities registered as charities and churches, to verify the legitimacy of rates exemptions.

This leads to a fairer rate base and potential increases in revenue to improve services within the Council area.

Analysis by industry group - get the big picture

Using ABR data can help you to get an overall picture of the industries in your local area. You are able to identify which industries to target for growth, determine segment size, and use the data to assist with your community strategic plan, urban and infrastructure planning processes, and economic development strategies.

Once you have identified target industries, you can further analyse the data by industry code. This can be further examined to allow you to create industry profiles of what type of entities make up an industry. This may underpin planning for support services. You are able to drill down further for targeted campaigns, such as compliance and education.

You can use the ABR data to monitor Industry trends, including measuring and tracking growth and decline of industry sectors. Data can be used for forecasting and strategic forward planning. For example tracking your progress and results of campaigns or legislative changes and the impact on industry in your area.

You may also use the business address to geo-code the data and identify industry clusters. Geocoding of ABN records provides accurate physical location information used by a number of government agencies with great results. It's particularly useful for those local governments wanting to identify and support home-based business as the geo-coded data is able to pinpoint the businesses in residential locations.

This functionality allows targeted communication and consultation around zoning or legislative changes, and to notify businesses of services or assistance available. It also helps in facilitating business compliance with council regulations, and to identify those that are not complying.

For local governments concerned with good governance, business details can be viewed for additional transparency, compliance checks and validation. For example, you can search for individuals who may be associated with other entities you are investigating, or find additional information about business.

The Auburn City Council uses the ABR data to identify potential project partners, target its bilingual small business forums, monitor changes and trends in industry sectors, and identify emerging businesses and sectors to prepare for growth. And this is what they had to say:

'The ABR data underpins our economic development initiative - helping us to grow local business, manage their needs, create jobs, and enhance the sustainability of the local and wider economy. It is the constant critical component in any of our projects' Auburn City Council.

The potential of ABR data continues to grow, and we are seeing more and more innovative ideas for its use by our partner agencies. Our hope for the future is that agencies continue to look for innovative uses of the data, and they collaborate and share their experience with other similar agencies.'

Data Integrity

As the Registrar I am not content to simply provide this data. I am also concerned with improving the Register's integrity, content and useability so that it is of greater use to business and government agencies.

While data quality remains a concern we are taking steps to continuously improve it.

There are currently just over 7 million ABNs this exceeds the number of businesses estimated by the Australian Bureau of Statistics, at about 2 million. It is important to note that the register also holds details of trusts, superannuation funds, charities and not for profit organisations.

Our own independent survey of a sample of ABR holders shows that:

• 61% of individuals
• 75% of partnerships
• 87% of companies
• 91% of trusts
• 99% of superannuation funds
• 100% of government agencies, and
• Holders still require their ABN.

Some other interesting statistics are that the data is correct in relation to:

• 99% of legal/main names
• 96% of trading names
• 88% of postal addresses
• 77% of business addresses

These figures are of interest and concern to us and we are in the process of improving the ABR data by:

• Firstly continuing to strengthen the data integrity and enforcement initiatives currently undertaken. These include the Registrar initiated ABN cancellation program, integrity watch, the ANZSIC repair strategy, integrity indicator initiatives, third party referrals, inter-agency data exchange, targeted enforcement campaigns and the planned introduction of a penalty regime.
• We also have planned marketing and education initiatives to remind the community of the requirement to update ABR details within 28 days of a change. We will also be sending out messages to the business, tax agent and government communities about the ABR registration process and the ability to update online using the AUSkey digital credential.

Last year following advice from ABN holders we cancelled around 140,000 registrations, 67,000 of which were individuals. This year we have already cancelled around 127,000 with 60,000 of these being individuals.

We also cancelled a further 51,000 registrations last year including those of 3,600 individuals following an assessment made of the ABN holder. This year we have already cancelled 99,000 of which about 66,000 were individuals.

In 2009 we implemented the ABN entitlement tool. This means that an individual applicant undertakes a process to access their eligibility for an ABN. In the last year this process resulted in more than 30,000 ABN's being refused. So far this year more than 25,000 have been refused.

The extra funds provided by the Government in the 2012 Federal Budget will be used in part to enhance ongoing processes for us to undertake ABN eligibility checks. These processes will ensure that individuals and businesses are issued and/or retain an ABN in the proper circumstances.

This work includes:

Undertaking a mail out to 660,000 ABN holders, conducting 30,000 phone reviews and 6,000 site visits to:

• Review the entitlement of holders to ABN's and to cancel invalid/ineligible ABN's.
• Look at the possibility of implementing a penalty regime, including prosecutions where appropriate
• Review and update ANZSIC Industry Codes.

In any event according to Jenny Coppock, while issues around accuracy and integrity of the register exist, they have not stopped the Auburn City Council from finding many and varied uses for the data.

Federal Budget

In the recent budget, the government has provided funding over four years to the ABR to improve the operation of the register and the quality and currency of its data.

Some of the biggest impacts of these improvements for local councils will be from the expansion of the ABR data fields. The ABR is going to be expanded to include details of branches and more comprehensive data on associates.

We are also considering the feasibility and cost benefits of geocoding addresses. One potential benefit of this would be to provide government agencies using the ABR data with access to the exact physical locations for all businesses, regardless of geographic boundaries; for example post codes, suburbs, council electorates.

This geocoding of the ABR data also allows for improved targeting of communication and consultation around zoning or legislative changes, and to notify businesses of services or assistance available.

Geocoding of data also supports council work including business compliance with council regulations, and allows identification of those businesses who may not be complying.

As well as expanding the ABR data to allow for geocoding of addresses, the intention is to also enhance the ABR to capture branching information. This will also have significant benefits for the government users of the data. For example large retail chains currently show only the address of their head office on the ABR. The details of the local outlet or shop front located within your council area may not be recorded.

By allowing for the capture of branching information both the details of the head office and the local outlets of the retail chains would be recorded in the ABR. This has obvious benefits to councils as details of all of the businesses operating within their region can be more easily identified.

Overall these initiatives will increase the capability for all levels of government to plan for infrastructure, service delivery and disaster recovery. Once implemented these improvements to the ABR will mean we are able to provide even more useful information to help government agencies.

Conclusion

If you are unsure your council is a partner, visit www.abr.gov.au or phone us on 13 28 66. We can assist the council you represent to access and use the data to support the work you undertake. The new, simplified process for access to the non-publicly available data makes it easy, there's no catch - it's free.

If you are already one of our valued partners we can discuss how you may be able to use the data further and in support of other functions. For example we can connect your council with others who are using the data in similar ways, or show you how to make the most of the query tools available.

Why is the ABR marketing its potential benefits. Simply because it is the public sector's responsibility to seek to improve the Australian's efficiency and the wellbeing of its citizens. The ABR can help you do that.