This paper is the result of work being undertaken as part of a collaborative research program entitled 'The Performance of Australian Enterprises: Innovation, Productivity andProfitability'. This project is generously supported by the Australian Research Council and the following collaborative partners: The Australian Tax Office, Commonwealth Office ofSmall Business, IBIS Business Information Pty Ltd, Productivity Commission, and Victorian Department of State Development. The views expressed in this paper representthose of the authors and not necessarily the views of the collaborative partners. We would like to thank Dr Arif Syed of the ATO for some helpful comment.