Dynamic Business interview with Colin Porter, CreditorWatch.
The Federal Government’s Public Data Policy Statement, released last December, flagged its commitment to make non-sensitive government data ‘open by default’, with the aim being to stimulate innovation and drive productivity improvements across all sectors of the economy.
Nearly a year on, a slice of data with huge potential benefits for the small business community, if made public, remains inaccessible: Australian and New Zealand Standard Industrial Classification (ANZSIC) codes and the accompanying activity descriptions.
Developed by the Australian Bureau of Statistics and Statistics New Zealand, these four-digit codes are used to classify businesses based on their primary business activity. When applying for an ABN through the Australian Business Registry (ABR), a business must nominate an ANZSIC code that reflects their core business. A business primarily engaged in sheep farming, for example, would have an ANZSIC code of 0141.
Arguably, the information communicated by these codes isn’t confidential. However, the ABR, which stores the ABN details of registered businesses including their ANZSIC codes, deems these codes ‘non-public information’. Further, the A New Tax System (Australian Business Number) Act 1999 (the ABN Act) does not currently permit their disclosure to non-government entities such as small businesses.
According to Colin Porter, managing director of credit reporting bureau CreditorWatch, were the government to make business industry codes ‘open by default’, this would enable small businesses to be more thorough when performing due diligence on entities with whom there is an intention to do business.
“Given that certain industries – building and construction, for example – represent a higher credit risk than others, it stands to reason that industry codes are a strong indicator of a business’s credit risk,” he told Dynamic Business.
“Small businesses could make risk-based decisions, such as whether or not to extend additional credit to an entity, with greater confidence if they had the ability to identify whether an entity belongs to a low or high risk industry.”
“The Turnbull Government has committed to releasing non-sensitive information to enable better economic outcomes. If you consider the sensitivity of information that’s freely available through government channels already, such as a business owner’s place and date of birth, where they live and their shareholdings, it’s hard to understand why ANZSIC codes are not open by default. These codes are certainly not in the same league and should be made available.”
Dynamic Business reached out the Treasury for comment on why ANZSIC codes are non-public information and was advised that it is “currently considering the appropriateness of the current provisions under the ABN Act on what can be released to the public to determine whether changes are needed to better reflect contemporary thinking”. No details were provided regarding an expected completion date for this undertaking.