Without question, the highlight of our 2015-16 year is the fact that on 12 November the unfair contract law protections for small business people come into effect. This has been a long campaign that we started in 2009. Now lawyers and commentators are saying that the laws represent one of the most far-reaching changes in business regulation in Australia. We agree. It will introduce a measure of power balance between big and small business. Yes, historic. And we know more about this than anyone!
But 2016 has been even bigger for ICA. We:
- Launched a High Court action against the destructive owner-driver laws which was part of our contribution to having the laws repealed.
- Have launched action against the ATO in the Federal Court and the AAT as our defence of one contractor under attack by the ATO. These are significant test cases for all self-employed people.
These are just the highlights. Our full report is below.
ICA campaigns and advocacy in 2015–16
Unfair contracts implementation
As mentioned, our campaign for the unfair contract laws for small business people first started in 2009. It’s been a hard, rocky road. First the ALP promised this in 2010 for small business people, but then sided with big business. Then the Abbott government made a commitment, but went back on its word by proposing to limit the protections to contracts up to $100,000 in value. This effectively neutered the laws for most small business people. We worked hard to have this blocked in the Senate and we thank the ALP, Greens and the independents for lifting the limit to $300,000, thereby making the laws effective. The Turnbull government then accepted this. Here’s the ‘inside story’. Now the new laws start on 12 November 2016. Hooray! We plan to be very active helping small business to use the laws to achieve fairness in their contracts.
We defend Owner-Drivers under attack
Australia has not seen such a clear attempt to literally destroy small business people for a long time. The ‘RSRT’ imposed massive new charge rates on owner-drivers making them uncompetitive against big companies. We made a solid contribution to the campaign to defeat the laws. We:
- Challenged the laws in the High Court.
- Conducted significant social media and mass media campaigns.
We were hugely pleased to see the laws repealed.
Inspector-General of Taxation: IGT review
We seek to work with the ATO wherever we can to make sure the ATO applies tax law correctly and fairly to small business people. Unfortunately, our efforts frequently fall on deaf ears.
We have been working very closely, however, with the Inspector-General of Taxation (IGT) who has new powers to review individual small business cases. We made two detailed submissions to the IGT review of the performance of the ATO with respect to small business. One submission was public; the other was confidential as it explained the experiences of two ICA members. The gist of the submissions is that the ATO breaches the law and observes due process very much at its whim.
Parliamentary review into ATO scrutiny
Federal Parliament conducted a review into the level of scrutiny of the ATO. The ATO wanted less scrutiny. We made a submission arguing for more scrutiny of the ATO. Fortunately, the Parliamentary report recommended retaining existing scrutiny.https://icau.worldsecuresystems.com/Downloads/Taxation/ICA-Submission-to-Parliamentary-Tax-Office-Review-March-2016.pdf
Defending individuals against the ATO
Our submissions to the ATO, the IGT and Parliament on the treatment of small business people have always been based on our experiences with individual cases. We have several cases we are currently pursuing. One case has reached the point where we are supporting action to take the ATO to the Federal Court and the Administrative Appeals Tribunal. Here’s some detail but we can’t say much now, as the court proceedings are under way.
These are significant test cases for all self-employed people. Three key items are being tested:
- The ATO’s approach to alleging fraud and evasion.
- PSI in the consultancy sector.
- The legitimate sharing of income through partnerships.
Denial of ABNs to Virtual Assistants
Most recently we have become aware that the ATO is denying Australian Business Numbers to Virtual Assistants. We are undertaking investigations and will be conducting advocacy soon.
Superannuation disclosure Bill
The Federal government got itself into terrible knots over proposed superannuation changes that had major impacts on self-employed people running their own self-managed superannuation funds. We undertook some advocacy on the issue, but also highlighted in a government review that the big superannuation funds are subject to almost no requirement for disclosure or transparency. In our view this creates opportunities for corruption and should be fixed.
Effects test competition reform
We were part of the joint industry associations campaign to push through the ‘effects test’ reforms to competition laws. Currently, the government is moving ahead with this, but strangely the Labor Party is siding with big business in opposing the changes. We are of the view, however, that even though we support these changes, they are not as significant as the unfair contract protections.
Responses to Heydon Report on collusion between unions and big business
We made a submission to the Hedyon Royal Commission that payments from businesses to construction unions should be made illegal because such payments are effectively payment for collusive activity that damages competition and heavily damages small business subcontractors.
Victorian review into Labour hire and independent contractors
The Victorian government commissioned an inquiry into labour hire and independent contractors. We made a submission.
WA construction code
We have been part of the industry association consultation by the Western Australian government on the development of their (yet to be launched) construction code. We have focused our efforts on protecting small business subcontractors in construction, making some specific suggestions as to policy.
Other advocacy activity
ACCC consultative committee
ICA is a member of the Australian Consumer and Competition Commission, Small Business Consultative committee which gives us direct access to the top policy people and processes in the ACCC as they review competition enforcement activity.
National Small Business Conference
We were heavily involved in organizing the National Small Business Conference held in Melbourne in August.
Scottish National Party hosting
The Scottish National Party spokesperson for small business, Hannah Bardell MP, visited Australia and we hosted her by organizing meetings for her in Sydney and Melbourne.
ICA administrative issues
Our finances are stable with a growing cash balance. We have a modest income but do a lot with it thanks to our fantastic team of volunteers.
Our membership continues to grow quietly.
Our website continues to have good readership, with around 2000 unique visitors per month.
This year we created links to:
- Empower for electricity services.
- Envirosure for insurance services.
At a Special General Meeting we are proposing to update our constitution to:
- Make sure it is consistent with changes to our governing Victorian legislation.
- Clarify our advocacy role.
- Incorporate our proposals to create our ‘protected member’ category. See below
Proposed Protected Member category
We have been working for nearly two years on a plan to introduce a ‘Protected Member’ category. The proposal is that ICA members who take up the offer would be able to trigger our support should they come under attack from the ATO, or suffer under unfair contracts (and more). We have been in discussions with a Lloyds Insurance syndicate for insurance coverage. More on this soon.