How we engage with Next 5,000 groups
How we engage with the Next 5,000 privately owned and wealthy sub-population through the tax performance program.
We engage with Next 5,000 groups in a range of ways based on the:
- size of operations
- structural complexity
- consequence of tax issues
- risk of non-compliance.
We engage with groups that are large, have complex structures through a streamlined assurance review.
Streamlined assurance reviews are carried out one-to-one with representatives of the selected private groups.
We engaged with other groups through risk reviews. For further information on our risk based approach, see Risk based reviews.
Demographics
Within the Next 5,000 sub-population there are about 7,899 private groups in Australia that have net wealth of over $50 million. These groups hold around $1 trillion in net assets and contribute more than $14.2 billion in tax revenue each year.
Considering the economic size of these groups, even one error can have a big tax impact. The high profile of these groups also means that their level of participation can influence community confidence in and perceptions of fairness of the tax system.
A typical Next 5,000 group can contain around 14 entities, including a combination of:
- companies
- trusts
- self-managed super funds.
Some Next 5,000 groups have philanthropic interests and include an ancillary fund or charity.
Most are well established, multigenerational businesses that have been operating for many years. Many are family businesses or closely controlled groups.
These businesses often choose private structures because they allow for:
- more flexibility
- greater control over operations
- fewer reporting requirements.
As a business grows, structures become more complex. A typical Next 5,000 group includes:
- 14 entities made up of 7 companies, 5 trusts and 2 other entities such as a self-managed super fund or private ancillary fund
- a group head who is 63 years old
- 43 employees
- total income of $8.5 million
- net wealth of $81.1 million
- income tax of $614,200
- net GST of $124,800
- PAYG withholding of $293,800.
Typical Next 5,000 group
Groups by location
Over 80% of the Next 5,000 sub-population is located on the east coast of Australia and is divided as follows:
- New South Wales – 40.6%
- Victoria – 28.7%
- Queensland – 12.7%
- Western Australia – 9.2%
- South Australia – 5.5%
- Australian Capital Territory – 1.5%
- Tasmania – 1.1%
- Northern Territory – 0.6%
Next 5,000 groups by location
Note: Due to rounding, the total figure represents 99.9%.
Groups by entity type
There is over 137,000 entities within the Next 5,000 sub-population. The group structures used by Next 5,000 groups can be complex with some groups comprising of many entities.
They may contain any combination of company, partnership and trust structures operating both inside and outside of consolidated groups. Currently the Next 5,000 sub-population includes:
- 64,170 companies
- 45,938 trusts
- 14,656 individuals
- 5,856 partnerships
- 6,387 super funds.
Next 5,000 groups by entity type
Groups by industry
Within the privately owned and wealthy market the top 3 most prevalent industries include financial and insurance services, professional scientific and technical services, and construction. This is reflected in the Next 5,000 sub-population where over half operate in at least one of the following industries:
- financial and insurance services – 27.3%
- construction – 9.8%
- agriculture, forestry and fishing – 6.8%
- rental, hiring and real estate services – 6.5%
- wholesale trade 5.6%
- professional, scientific and technical services – 5.4%.
The remaining groups operate in:
- manufacturing – 5.1%
- retail trade – 4.9%
- accommodation and food services – 3.2%
- health care and social assistance – 2.5%
- transport, postal and warehousing – 1.5%
- administrative and support services – 1.0%
- remaining industries – 20.3%.
Next 5,000 groups by industry
Note: Due to rounding, the total figure adds to 99.9%.
How much tax they pay
The Next 5,000 sub-population:
- own over $1 trillion in net assets
- earn $304 billion in total income
- pay over $14.2 billion in income tax
- pay over $5.1 billion in net GST
- employ 1,124,582 people, paying $8.1 billion in PAYG withholding.
For more information, refer to Who is covered by this program.