Last month, at a Building and Construction forum in Sydney, the Australian Tax Office broke a promise they’d made a year ago to stop issuing Australian Business Numbers (ABNs) to apprentices and unskilled labourers.
As apprentices are employed under trainee provisions, it is impossible to understand how an apprentice can be classified as a business except, of course, by exploitative employers who wish to avoid paying holiday pay, sick leave and other employee benefits.
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Representatives of the ATO made the promise to stop issuing ABNs to apprentices in meetings with the CFMEU and at last year’s Building and Construction forum. This year, a red-faced Assistant Commissioner, told those attending the forum that he was unable to keep his promise because he was unable to get co-operation at higher levels. I believe those ‘higher levels’ represent political interference by those who have a vested interest in creating a work culture of independent contractors in Australia.
But it’s not only young people indentured to companies as apprentices, who are being exploited as ‘business operators.’ This week, we have the example of at least two large catering companies in Victoria that are being investigated for potential breaches of the law, because they employed children as young as 14 as independent contractors.
Up until recently, the Howard Government has encouraged the growth of independent contractors and a consequent shift in work culture, but only by pulling tax levers. Now, with its Independent Contractor legislation ready to hit Federal Parliament, the Government is looking to cement these immoral and despicable practices in place.
At the Sydney Institute, last year in a speech that had all the rhythm and cadence of Robert Menzies’s ‘The Forgotten People’ radio broadcast of 1942 Howard outlined his plan when he said there was no greater economic development in Australia ‘in the last two decades than the rise of the œenterprise worker. ’
The Government is morphing employees into independent contractors that require no holiday pay, no sick leave, and none of a range of other benefits that the union movement has fought for and won over the last hundred years.
Thanks to Fiona Katauskas. |
And it is doing so with the loud encouragement of the Independent Contractors Association (ICA) a group that campaigns to deregulate the Australian labour market and destroy unions. The ICA was founded by Ken Phillips and Bob Day, both of whom are closely associated with the conservative Institute of Public Affairs and the Centre for Independent Studies. Bob Day is also the President of the Australian Housing Industry Association.
The ICA regularly overestimates the number of independent contractors in Australian at 1.9 million when, in fact, according to a Productivity Commission report the number is closer to 800,000.
The push to put more independent contractors into the workforce has seen Howard’s IR technocrats also twist the recommendations of the 2000 Ralph Report on taxation recommendations which were designed to clean up the rorts of pseudo-employees claiming business tax benefits. This is a measure of just how far they are prepared to go.
The carrot for those that hold ABNs is the illusion of being their own boss and the possibility that, if they structure their affairs appropriately, they can avoid paying the higher rates of tax that PAYG (pay as you go) employees must and also claim benefits that give them a financial advantage.
And it’s not just apprentices and young labourers who are being caught up in this move. If you want to see how extensive this cultural change is, just take a look through the job pages of any Saturday newspaper you’ll find many examples of vacancies calling for tradespeople who are ‘looking to join a small team, must have own car and must have ABN.’ In other words, if you’re not styled as a ‘self-employed worker’ you don’t get the job.
Over and above the issue of exploiting young workers, issues of tax avoidance arise with the level of self-assessment that independent contractors are allowed. Personal expenses can be reported as business expenses and the only check against this is the strength of the tax audit.
Howard’s pursuit of his ‘independent contractor’/’enterprise worker’ revolution is consistent with the ideological troglodytes of the HR Nichols Society and its offspring, the ICA. But the changes that Howard and his backers want to push through are certain not to change the tax system to make it fairer. Which is a shame, because we need to put some integrity back into a system that is supposed to distribute the nation’s wealth fairly, and stop the exploitation of young Australians who deserve better.
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