Submission: StatsNZ Revision of the Industry Classification Codes (ANZSIC)
❓What?
StatsNZ Tatauranga Aotearoa is seeking feedback to help shape the future of the industrial classification used in Aotearoa New Zealand, this is just the start of a consultation.
❓What is ANZIC?
The system currently used here was developed with the Australian Bureau of Statistics (ABS) and is called Australian and New Zealand Standard Industrial Classification (ANZSIC).
These classification codes help to organise and analyse industry data, making it easier to understand economic changes and allows for internationally comparable industry data. The structure of ANZSIC codes is hierarchical and detailed, with levels from divisions to classes represented by numbers and letters to categorise business activities.
In order to be useful, these classifications must remain relevant. Since the ANZSIC was last updated in 2006, the structure of our economy has undergone significant change. Many of these changes have included the growth of digitally based activity.
Several of these international standards are currently being updated, including the International Standard Industrial Classification (ISIC). The ABS are consulting on the use of ANZSIC, and are exploring options, one of which is to replace it with ISIC Rev 5.
❓Why do I care?
From government agencies to industry organisations and researchers, a wide array of stakeholders utilise these codes for purposes ranging from:
administrative
regulatory
taxation
research
advocacy
At a business level, ANZSIC and related classifications, such as the Inland Revenue Business Industry Code (BIC) and New Zealand Standard Industrial Output Classification (NZSIOC), are used to calculate levies. Supplying an incorrect BIC code means your ACC invoices could be calculated incorrectly, potentially leading to overpayments. These codes are also used for taxes and other forms that describe your main business activity. This process can be confusing, especially when a single code must be chosen for a business that fits into multiple categories.
At a higher level, this is relevant for the VFX industry in New Zealand as it provides a framework for understanding industry trends, drivers of change, GDP contribution, growth over time, and is required to inform policy decisions, such as the efficacy and productivity of the Post, Digital and Visual Effects rebate.
❓What’s the problem?
VFX and Animation businesses fall under more than one category, such as “Motion picture, video and television programme post-production activities (Division J)” and “Computer programming (Division M).”
A great deal of VFX and Animation work is done in office spaces on computers, rather than on production sets. Therefore, businesses often use the computer programming codes, particularly because the motion picture codes trigger ACC levies for 'risky' on-set activities.
Computer programming is not counted under screen production economic data leading to miscalculations of the screen sector’s value.
In 2020, the Auckland Screen Alliance surveyed their region and found that as much as 60% of the businesses were not using the “motion picture” J codes, resulting in a significant undervaluing of the entire screen industry.
It is difficult to get reliable data to assess the productivity of the PDV rebate or capture the full GDP contribution of post-production activity to inform decision making on the government’s media investment.
Within the current and proposed new codes under “motion picture post-production,” there is no way to separate VFX and Animation activity from other post-production activities, so there is no way to get reliable data on different parts of post-production. This requires screen organisations, such as VFXG, to have to collect our own data.
For ACC codes, businesses have to get advice to separate the codes based on percentage of onset and offset activity to avoid paying higher levies for computer based activities, which is time consuming and costly.
❓What are the proposed changes?
Motion Picture, Video and TV Programming
No major change proposed for post-production categorisation from ANZSIC06 To ISIC Rev 5.
2. Computer Systems Design and Related Services
Industry /Division: “Computer system design and related services”
Change: Under ISIC Rev 5, this activity moves from the professional, scientific, and technical services division to a new stand-alone division (Division K).
Implications: We have options as to how much detail we show within the new division.
Possible Revision to ISIC:
StatsNZ is interested in understanding customer needs as related to the detailed
classes within the new division, which are:
• development of video games, video game software, and video game software tools
• other computer programming activities
• computer consultancy and computer facilities management activities
• other information technology and computer service activities.
✴️ VFX Guild Position and Submission Summary
VFX Guild supports ANZSIC codes being replaced by the ISIC codes to be more internationally comparable via the ISIC Rev 5 adoption proposed. This will require the ISIC codes to be adjusted to make them relevant to VFX and Animation businesses in Aotearoa, New Zealand.
Regardless if the ISIC codes replace ANZSIC or not, StatsNZ will need to adjust the code detail to make sure that the classification is collecting accurate data on the screen industry, so that this data can inform policy decisions, especially around the Post-production rebate (PDV).
Options:
This could be done by adjusting the “Motion picture, video and television programme post-production” code to include detail of the type of post-production activity (e.g. editing, VFX, Animation etc) and if the activity is on-set or off-set. With this option all film and TV data will be collected by StatsNZ under one division code and will also allow for businesses to use a few more numbers, via class detail, to split their activity between on-set and off-set to determine their ACC levies.
If this is not possible, another less favourable option is to add more class detail to the new Division K code for “Computer system design and related services” including another line for VFX and Animation. Game Developers, Animators and VFX artists are using the same/ similar software to create computer generated graphics for different platforms among other software development activities.
For example, division K code, “Computer system design and related services,” class detail:
• development of video games, video game software, and video game software tools
• development computer generated content, computer generated content development software, and other computer generated development tools
• other computer programming activities
• computer consultancy and computer facilities management activities
• other information technology and computer service activities.
Other suggestions:
Consider changing the K code division name to be more modern: “Entertainment and Information Media” rather than “Motion Picture and Video.”
As VFX, Animation and Game Development creative tech industries are converging, consider the best way to classify the “entertainment and information media” industry within one division instead of splitting them between different divisions. This would need to be done in a way that maintains the ability of each sub-sectors to get specific data via detail at the class level.
Consider a classification under a “media code” that includes all development of digital content, digital content development software, and other digital content development tools. This code would need to recognise that the business activity is computer based and shouldn’t require higher ACC levies, e.g. media, post production, VFX, off-set & media, post-production, VFX, on-set.
❓What do I need to do?
📑You can review the materials here:
✍️StatsNZ Feedback Requested:
How the current industrial classifications are used, and their benefits and limitations in relation to you
Opportunities, concerns, and issues for us to evaluate in considering the future of industrial classifications in Aotearoa New Zealand
For intensive users of the industrial classifications, we seek your feedback on some of the key changes being made to ISIC (known as ISIC revision 5) and our initial thoughts on some options around these (this detail is available from page 8 of the consultation document).
If there was more detail via additional numbers added to the new or old codes, that would make it easier to gather data and assign ACC levies, would this make it more confusing or labour intensive to fill in your business documentation?
🙏 You can also choose to support the VFX Guild position by copying and pasting any of the information that we have provided to add to your own feedback when responding. You can email VFXG with any additions / comments or corrections: info@vfxg.nz.
👉Email your specific feedback to econstatsfuture@stats.govt.nz by 5pm 25th of April, 2024.