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Designated non-financial businesses and professions in Australia

This section presents information on the size and other characteristics of the professions and businesses that provide services as legal practitioners, accounting professionals, real estate agents and related services, dealers in precious metals and stones, and as trust and company service providers. Understanding the size and income characteristics of these businesses and professions is important to identify the types of businesses and professional practices that might be most at risk of involvement in money laundering and financing terrorism, and in order to devise appropriate risk reduction measures.

Legal practitioners

Current information on the number of legal practitioners in Australia is not available, although based on the information provided by jurisdictions to the National Legal Profession Reform Taskforce (2010), it was reported that 61,633 practising certificates were issued in 2008–09. Details of the number of practising certificates issued to both solicitors and barristers in 2008–09 for each state and territory are shown in Table 1.The Taskforce also reported that based on the information provided by each jurisdiction, there were an estimated 5,073 admissions to legal practice in 2008–09, although these numbers are only estimates given some limitations in the data received from several jurisdictions (National Legal Profession Reform Taskforce 2010).

This compares with an earlier estimate of 29,159 solicitors working in 7,566 practices in Australia in 2002 reported by the Australian Bureau of Statistics (ABS 2003a). The Bureau has also reported that there were 15,326 businesses providing legal services and legal support services at June 2008

Table 1 Legal practising certificates issued in Australia by service type in 2008–09
NSW Vic WA NT SA Qld Tas ACT
Solicitors 24,715 13,587 4,112 456 3,439 8,209 450 1,399
Barristers 2,107 1,831 192 43 n/a 981 39 73
Total 26,822 15,418 4,304 499 3,439 9,190 489 1,472

Source: National Legal Profession Reform Taskforce 2010: 6

Table 2 Size of solicitors’ practices in 2001–02
Size Proportion of practices (%) Cumulative proportion (%) Practices (n)
1 principal 69.2 69.2 5,234
2 principals 17.8 87.0 1,350
3–5 principals 10.4 97.4 783
6–9 principals 1.4 98.8 108
10+ principals 1.2 100.0 91

Source: ABS 2003a

(ABS 2009). The bulk of these (n=11,244) were solicitors firms, patent attorneys, or payroll and legal support services. Unincorporated businesses comprised 65.4 percent of these businesses and 20.1 percent were incorporated. The remaining 14.5 percent of businesses offered services in the name of trusts.

The vast majority of solicitors’ firms in 2001–02 were very small businesses (ABS 2003a). More than 97 percent of all practices in 2001–02 had fewer than six principals (as illustrated in Table 2) and more than two-thirds of all practices had a single solicitor only. Corporate practices represented a very small proportion of solicitors firms in 2001–02.

Income

Legal practices in Australia generated $10.6b in income in 2001–02. Government solicitors and public prosecutors contributed $414m to this figure, legal aid bodies contributed $326m and patent attorney firms generated $888m. Private solicitor practices generated $8.4b in income in 2001–02 and barristers’ practices generated $1.1b in the same period (ABS 2003a).

Figure 1 Income distribution for legal services for small (fewer than 6 principals) and large (more than 6 principals) solicitors’ practices in 2001–02 (%)

Figure 1

Source: ABS 2003a

The overall contribution to gross domestic product in Australia from private legal practices for 2001–02 was $7.2b being income less expenditure. Solicitors’ practices contributed $6,316.7m and barristers practices contributed the remaining $896.8m.

Small practices (with fewer than 6 solicitors) contributed 46.9 percent of the $8.4b of income generated, with the remaining 53.1 percent coming from firms with more than six principals. The combined income generated by small and large firms was approximately the same in 2001–02, although the type of services generating it differed between the two. Commercial legal services generated the largest proportion (36.7%) of income for large firms. Smaller firms, by contrast, received the largest proportion of income (28.6%) from property matters. Figure 1 outlines the contributions from other types of work to the total income for small and large solicitors’ firms in 2001–02. Property matters contributed 14.2 percent of income for large firms (ABS 2003a).

Apart from commercial and property services, the additional types of work that might constitute financial or real estate transactions listed as sources of income by the Australian Bureau of Statistics are will, probate and estate activities, and banking and finance services. Financial and property transactions contributed 55.6 percent of revenue for solicitors’ firms (of all sizes) in 2001–02. Table 3 provides the breakdown for all types of services for all solicitors’ firms for this period.

Commercial and property services remained the two legal services generating the largest percentages of income for solicitors’ firms, patent attorney businesses, service/payroll entities and other legal support service providers (ABS 2009).

Table 3 Source of revenue for solicitors’ firms in 2001–02
Type of service Proportion of income (%)
Property 21.0
Wills, probate and estate activities 3.6
Banking and finance 6.3
Commercial 24.7
Family 5.8
Criminal 1.7
Environmental 1.0
Intellectual property 2.5
Industrial relations 2.9
Personal injury 15.6
Administrative/constitutional law 0.9
Other legal 9.3
Other revenue 4.7

Source: ABS 2003a

Table 4 Accounting professionals in 2008–09
Subcategory Estimated number of practices Estimated number of individuals
Public accountants 9,491 n/a
Tax agents n/a 24,000
BAS agents n/a n/a
Total >9,491 >24,000

Note: Public accountant figures from 2008. Tax agent estimate is from 2009

Source: IBIS World 2008. Industry estimates from CPA Australia and the Institute of Chartered Accountants Australia presented during Roundtable discussions

Table 5 Size of accounting practices in 2001–02
Size Proportion of practices (%) Cumulative proportion (%) Practices (n)
1 principal 67 67.0 6,610
2 principals 21.6 88.6 2,134
3–4 principals 8.7 97.3 854
5–9 principals 2.3 99.6 226
10–19 principals 0.3 99.9 25
20+ principals 0.1 100.0 11

Source: ABS 2003b

Accountants

There were 9,860 accounting practices in Australia in 2002 (ABS 2003b). Industry representatives estimated that there were 24,000 tax agents in 2009. Official statistics and representatives from the accounting profession associations were unable to reveal the number of BAS agents. Table 4 shows that some estimates (IBIS World 2008) suggest that the number of accounting firms decreased to 9,491 in 2008.

Two-thirds (n=6,573) of accounting firms identified in 2001–02 were businesses with a single principal accountant. The proportion of accounting practices with more than four principals was just 2.7 percent in 2001–02 (ABS 2003b). The composition of accounting practices is outlined in Table 5.

Table 6 Income sources for accounting practices in 2001–02
Category Percentage
Business taxation 37.0
Personal accounting and taxation 18.0
Assurance services 17.0
Management and business consulting 12.0
Financial planning and investment advice 2.8

Source: ABS 2003b

Table 7 Sources of income by accounting firm size in 2001–02
Principals (n)
1 2 3–4 5–9 10–19 20+ All
Business tax 45.6 50.5 49.5 36.3 36.6 23.5 36.7
Personal accounting and tax 31.9 24.9 22.9 19.5 22.9 6.7 18.0
Auditing and assurance 3.6 4.5 7.3 9.6 15.7 31.8 16.5
Insolvency, reconstruction and bankruptcy 3.1 0.3 4.9 9.2 5.6 9.1 6.2
Management and business consulting 6.5 9.0 8.0 8.4 10.9 18.3 12.1
Financial planning and investment 1.5 4.4 3.9 3.6 3.0 2.3 2.8
Other 5.5 4.1 1.0 11.8 3.0 6.1 5.8
Total (professional work) 97.8 97.6 97.6 98.3 97.7 97.8 97.8

Source: ABS 2003b

The average number of employees in each firm in 2001–02 was 3.5, although for large firms (with at least 20 principals or partners), the average number of employees was 1,824.

Accounting practices employed 81,127 people at 30 June 2002. Of the 46,474 practising accountants at 30 June 2002, 14,942 were principals or proprietors of accounting firms.

Income

Smaller practices derived higher proportions (78%) of income from business taxation and personal accounting and taxation than the average. For larger firms, by contrast, these categories of income represented only 30 percent of all revenue. Assurance work (32%) and management and consulting (18%) contributed greater proportions (ABS 2003b).

Table 6 shows the sources of income for the group as a whole. The largest proportion of income, across the group, was generated from business accounting.

Table 7 provides the breakdown of income sources for firms according to the number of principals or partners.

Real estate agents

Table 8 shows best estimates of the number of participants in the real estate industry in Australia at present. There were 10,001 businesses providing real estate agents services in 2003, employing 25,910 sales staff. There were 7,500 valuers (and other professionals) with membership to the Australian Property Institute in 2009 and the Mortgage and Finance Association of Australia’s (MFAA) membership base included 13,245 mortgage brokers (and other professionals) in 2009.

Business size

Real estate businesses in Australia in 2002–03 were predominantly small businesses (ABS 2004). Of the total of 10,001, 39 percent (3,900) employed four or less people, 34.1 percent (3,401) employed between five and nine people, 20.6 percent (2,060) employed between 10–19 people and only 0.6 percent (60) had more than 50 employees (ABS 2004).

Real estate businesses were also split into franchises and non-franchised firms. Table 9 shows that around one-third of all real estate businesses were franchises and 45 percent were non-franchised businesses.

Table 8 Real estate businesses
Subcategory Estimated number of businesses Estimated number of individuals
Agents 10,001 25,910
Property developers n/a n/a
Property valuers n/a 7,500
Mortgage brokers n/a 13,245
Total 10,001 46,655

Note: Real estate agent figures from 2003. The number of individuals represents the number of sales employees in the industry. Property valuers estimate based on membership of the Australian Property Institute in 2009. This figure includes other occupations but does not represent all property valuers. Mortgage brokers estimate based on membership of the MFAA in 2009. This figure includes other occupations but does not represent all mortgage brokers

Sources: ABS 2004; API nd

Table 9 Type of real estate businesses in Australian in 2002–03
Type of business n %
Franchise 3,639 36.4
Non-franchised agency 4,545 45.4
Other real estate business 1,818 18.2
Total 10,001 100.0

Source: ABS 2004

Table 10 Sources of income for real estate agencies 2002–03
Source Income ($m) %
Sales commissions 5,000.6 73.3
Property management commissions 1,135.2 16.6
Leasing/letting commissions/fees 318.7 4.7
Other rent, leasing and hiring income 24.7 0.4
Consulting fees 57.7 0.8
Property valuations 66.6 1.0
Conveyancing work 3.8 0.1
Interest 16.6 0.2
Other 194.8 2.9
Total 6,818.7 100.0

Source: ABS 2004

Table 11 Real estate sales income by type, 2002–03
Type of sales Income ($m) Percentage of total income
Vacant land—residential 231.3 3.4
Vacant land—non-residential 58.8 0.9
Residential properties 4,162.7 61.0
Commercial, industrial and retail properties 523.8 7.7
Other non-residential properties 24.0 0.4

Source: ABS 2004

Table 12 Sources of income for real estate agents by number of employees, 2002–03
Number of employees Property sales and leasing Property management Other Total
$m % $m % $m % $m
0–4 565.1 72.5 169.6 21.8 44.5 5.7 779.2
5–9 1,382.5 79.0 308.4 17.6 58.6 3.4 1,749.4
10–19 1,942.5 84.1 293.3 12.7 74 3.2 2,309.8
20–49 969.5 79.5 179.6 14.7 70.2 5.8 1,219.3
50–99 153.5 65.6 47.4 20.3 33.1 14.2 234
100+ 306.2 58.1 136.8 26.0 83.9 15.9 526.9

Source: ABS 2004

The total number of employees in the industry in 2002–03 was 67,934, which included 9,426 working directors of incorporated businesses and 3,549 partners and proprietors of unincorporated agencies. The industry employed a total of 25,910 sales people and 316 land valuers in the same period.

Income

The largest category of income for real estate businesses in 2002–03 was from commissions on the sale of properties. Table 10 outlines the total amount and proportion of income from all sources in 2002–03, while Table 11 shows the source of sales commission income for the same period. Residential property sales commissions were the single largest source of income and generated 61 percent of the total revenue for the industry in that year (ABS 2004).

The proportion of income generated by property sales commissions and leasing commissions varied for real estate firms of different sizes in 2002–03. Real estate agents with 10–19 generated the largest proportion of income from property and leasing commissions, representing 84.19 percent of income, whereas agents with 100 employees or more received 58.11 percent of income from these activities. Table 12 shows the distribution of income from firms according to the number of employees.

Small firms (with 4 employees or less) generated 11.4 percent of the industry’s total income in 2002–03, companies with 10–19 employees generated 33.9 percent and companies with more than 100 employees generated 7.7 percent of the total income for the industry.

Dealers in precious metals and stones

There are no estimates of the number of pawnbrokers and secondhand dealers, including antique dealers, in Australia. The best estimates available for the number of businesses engaged in retail and wholesale jewellery trading, shown in Table 13, are industry association memberships. There were 1,224 members of the Jewellers Association of Australia and the Diamond Guild Australia, although it is possible that the 24 members of Diamond Guild Australia are also members of Jewellers Association of Australia. The National Council of Jewellery Valuers had 550 members in 2009.

Trust and company service providers

There is little information on the size of each of the types of businesses offering trust and company services that operate in Australia. Australia Post (2008) reports that there are 4,530 outlets that may provide post office box and locked bag services. This figure does not include the number of other businesses providing these services. The Trustee Corporations Association of Australia (TCA) is the industry body for trustee companies. TCA had 50 members in 2006 (TCA 2006c). This figure includes all state trustees but does not include all of the corporate providers. The numbers of businesses providing other trust and company services are unavailable.

Table 13 Dealers in precious metals and stones
Subcategory Estimated number of businesses Estimated number of individuals
Secondhand dealers and pawnbrokers n/a n/a
Retailers and wholesalers >1,224 n/a
Valuers n/a >550
Total >1,224 >550

Note: The figures for retailers and wholesalers are estimates based on membership of the Jewellers Association of Australia and the Diamond Guild Australia in 2009. Businesses may be members of both associations. The figure does not represent all retailers and wholesalers and might include other occupations. The figures for valuers are based on membership to the National Council of Jewellery Valuers in 2009. The figure does not represent all jewellery valuers

Sources: DGA nd; JAA nd

Last updated
3 November 2017