Self Employed Australia

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“Everyone needs an Advocate”

Defending the gig economy

Dan Andrews (Victoria) declares war on small business – ‘destroy em’ they say!

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Thursday, July 16, 2020

Yesterday the Victorian Labor government released its report into the ‘gig economy.’ The 228-page report should be read as a declaration of war against self-employed, small business people across Victoria, and Australia. This is so because a key recommendation calls for laws that would effectively make self-employment illegal.

The recommendation (page 193 of the report) reads:

Recommendation 6
The Inquiry recommends that the FW Act be amended to
(a) codify work status on the face of relevant legislation (rather than relying on indistinct common law tests)
(b) clarify the work status test including by adopting the ‘entrepreneurial worker’ approach, so that those who work as part of another’s enterprise or business are ‘employees’ and autonomous, ’self-employed’ small business workers are covered by commercial laws.

This dumping of the common law definition of self-employment with the creation of a new test (called the ‘entrepreneurial test’) would smash small businesses in Victoria.

We know this because we’ve been following in detail exactly the same laws in California that came into operation on 1 January this year, just before Covid-19 hit. We can confirm reports out of California this week that this ‘kill self-employment law’ has smashed 4.5 million Californian jobs on top of the Covid-19 damage. The Californian law explains why 27.7 per cent of California’s workers are on the dole compared to the national US average of 15.7 per cent under Covid-19.

This is the damage that Premier Dan Andrews and his government now seek to inflict on Victorians. The reports calls for the Federal Government to change the law and, if not changed Federally, for the Victorian government to do this in Victoria.

This is vindictive madness. It displays a distinct hatred of self-employed people, that we are worthless, and of no value to society or the economy. That we must be supressed and eliminated in Victoria.

And to set a course in this direction just as everyone is being smashed by Covid-19 displays an ideological disconnect from reality.

We’ll be preparing a full analysis of the report, but here is our submission to the inquiry in 2019 and our statistical analysis of the gig economy.

We’ll be calling on the Morrison Government to defend self-employed small business people from the Dan Andrews’ attack. But first we’ll get our full analysis done.

Frankly. Good Grief!!!!

Anti-Trump Democrats get political black eye from small business

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Thursday, May 28, 2020

The anti-Trump forces in the USA have just suffered a surprise defeat in a Californian bye-election that has likely implications for the November US Presidential election.

The Democrats suffered a massive backlash against them because of vicious anti-small business laws that have crushed the self-employed small business sector in California.

The law (AB5) started on 1 January this year and essentially outlawed self-employment in California. It’s caused havoc with huge job losses, large numbers leaving the state and economic collapse in independent contractor industry sectors. This bad job wave swept across California just before the Covid-19 disaster.

The Democrats who control the California legislature and created the anti-self-employed laws have responded with arrogance. Go get a union ‘employment’ job they say! Self-employment’s not a ‘real’ job the Democrats claim. Voters have thought differently.

The political power cards play out as follows.

In the US Federal Congress (parliament) the Trump Republicans control the Senate (upper house). But the anti-Trump Democrats control the (lower) House of Representatives with 235 seats to the Republicans’ 197 seats. This Democrat control of the House of Representatives frustrates and limits the Trump agenda. California is the key state giving Democrats their control.

Of the 435 seats in the House, 53 come from California. The Democrats have 46 of those seats. If the Trump Republicans were to win 20 seats from the Democrats and Trump remained President, Trump would control the US Congress. The Californian Democrats’ hatred of small business raises just that scenario: a Trump Presidential and Congressional win.

Just a week ago a Republican Trump loyalist won a bye-election for a Californian House seat, defeating the incumbent Democrat with a 19 per cent swing. A bye-election ‘flip’ of this sort has not happened in California since 1998, let alone one with a swing of this size.

The Trump Republican candidate campaigned hard against the Californian Democrats’ anti-small business law (AB5).

The national implications are clear. The Democrats’ Presidential candidate, Joe Biden, has endorsed California’s AB5, promising to take it across America if he wins. The Trump Republicans will campaign saying Democrat Biden will destroy small business across America. It’s powerful political messaging underpinned by the glaring reality of California’s AB5.

The Democrats have dug themselves into a deep hole. Their actions speak of hatred of self-employed, small business people.

What unfolds in the USA with the November Presidential and Congressional elections over the rights of self-employed people holds potential lessons for Australia—namely, can a political party attack self-employed, small business people and survive politically? Watch this space!

Regulation-lovers with a ‘solution’ desperately seeking a problem—Gig it!!!

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Monday, August 05, 2019

Since the Global Financial Crisis, unemployment has dropped to low levels in most of the developed world at least. That’s fantastic. It needs to continue.

One of the important factors in this positive trend seems to be the evolution of work arrangements that enable quick responses to fast-moving markets and consumers. Flexible work creates work! But this gets regulation-lovers worried. They reckon that if work isn’t controlled through government regulation, there’s got to be something wrong. Currently their focus is on the so-called ‘gig’ economy. Apparently, it’s a big ‘problem’ that needs a solution.

We’re intensely interested in the ‘gig’ issue because ultimately the regulation-lovers’ push is about squashing the right of people to be self-employed. And that’s a right that we love!

There are heaps of inquiries and reports. As examples, there are questions over Uber (ride sharing), Facebook, AirBNB and so on generating big media coverage. But here’s a core question. Just how many people are earning their income through ‘gig’ engagement’? How big is the issue?

We’ve pulled together data from reliable sources covering the United States, the United Kingdom and Australia. Here are the summary tables.

Get this. For all the big noise about the ‘gig’ economy the number of people using ‘gig’ engagement as their income source is tiny. The stats show that:

  • Only 1 to 1.8 per cent of workforces are involved in ‘gig’ work but, of those,
  • 0.63 per cent to 0.88 per cent are in fact ‘regulated’ employees.

And significantly

  • For 56 per cent, gig work is less than 15 per cent of their income. (UK)
  • 69 per cent earn less than £1,000 a year from gig work. (UK)

The results are similar in the USA and Australia.

That is, for the bulk of people using gig engagement, it’s pocket money or top-up ‘nice-to-have’ income, but not core income.

But it’s important also to distinguish between ‘gig’ and other self-employed work. The Centre for Research on Self-Employment (CRSE) in London has produced a great research report on this. The report looks at the freelancer side of self-employment and finds that:

  • 85 per cent of freelancers undertake project-based and ‘portfolio’ work.
  • Only 15 per cent are gig workers.

This is consistent with our summary table.

What’s more, CRSE identifies that the freelance sector generates some £140-145 billion of economic output for the UK economy. It’s major stuff. Here are some key extracts from the CRSE report.

An important finding by CRSE identifies skills as the key issue relating to income levels, not the nature of the contract:

…high skilled gig work generates higher quarterly income than equivalent employee work. It seems that skill rather than the nature of the employment contract is the most important determinant of a worker’s income…

Why are we concerned? Too often we’ve seen attempts by worker regulation-lovers to use ‘invented’ problems to try and kill off self-employment. It’s a campaign that’s been ongoing since around the 1990s. Its current rebirth is ‘gig’ focused.

Regulations are needed for real problems. But let’s not invent problems. We want a fact-based debate. Self-employment in its many forms—freelancing, gig, traditional shop-keeping, trades and so on—all make an important mix for job creation, economic activity and personal income creation. Let’s not kill off the good stuff!

Reflections on an incompetent ATO—ABNs & Gig stuff

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Friday, June 28, 2019

Earlier this week we discussed the history of Uber in its global legal battles to have its drivers accepted as independent contractors. The Uber battle is at the forefront of the gig ‘question’.

Today we focus on the Australian Taxation Office and its incompetence (from our experience) in assessing employee vs independent contractor status. The ATO should learn from a significant Uber legal decision in Australia. It probably won’t though

The issue is important because the ATO has the unrestrained power to destroy the business of self-employed individuals simply by denying individuals their Australian Business Number. It can do this by declaring an independent contractor to be an employee.

This is because under the ABN legislation a person is entitled to an ABN if they are ‘carrying on an enterprise,’ a business being a ‘Profession, trade, employment, vocation or calling.’ But a business does not include an occupation as an ‘employee’.

Under this definition, self-employed people should easily qualify for an ABN because the definitions are so broad, intentionally so we believe. However, the ATO can legitimately deny a person an ABN if the person is an employee at common law.

We have sighted ATO assessments of ‘employment’ when the ATO has denied or withdrawn people’s ABNs. The ATO did this to some 17 individuals in late 2017. The story of the case is here. The ATO was eventually pressured into returning the ABNs to these people.

We have sighted the ‘employment’ assessment done by the ATO in this case. On our assessment the ATO’s process was amateurish and incompetent at best and at worst was manipulated by the ATO to achieve its predetermined view that the independent contractors were/are employees. By these actions the ATO strips itself of its legitimacy.

One of the ATO’s current obsessions is the gig economy and an apparent determination to deny that gig platforms legitimately use self-employed independent contractors. If the ATO is to have legitimacy in this area, it must demonstrate that it follows proper common law processes in undertaking its assessments.

Fortunately, there are some authoritative recent Australian examples that the ATO should replicate if it is to have legitimacy in this area. We present and analyse the major Uber case here.

Will the ATO fix its incompetency? On past experience, probably not.

Hysterical reaction to Uber (gig) drivers not being employees. ATO wake-up call

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Tuesday, June 25, 2019

Earlier this month the Fair Work Ombudsman released a statement that, after a two-year investigation, it has concluded that drivers working through Uber are not employees.

The Transport Workers Union described the decision as ‘…devastating for workers in the gig economy’. One academic said the decision was ‘very disappointing’.

We disagree. The Fair Work Ombudsman’s decision is consistent with a highly detailed investigation and legal ruling on Uber drivers by the Fair Work Commission in December 2017.

We have a message for the labour movement and its apologists: Wake up! The world has changed. By their actions people demonstrate that they want to be independent and control their own working lives. The worker vs bosses war is irrelevant to most people. Read the tea leaves from the recent federal election. You’re flogging a horse that will kick you! Our message is equally directed to the Australian Taxation Office: We reckon that you’re breaching the law!

So, after getting our ‘rant in reply’ out of our system, let’s look at the facts.

There’s a big push from the Victorian Labor government, the unions, some academics and many in the federal bureaucracy (particularly the ATO) to clamp down on or stop the gig economy. They have similar motivations in our view. They don’t like, understand or accept that independent work can actually exist. They are obsessed with controlling all work.

But independent work is a legal, economic and behavioural fact discovered and found in clear, established processes of investigation. There is no mystery or confusion about this. Unless it’s confusion created by those who want to stop it. (Oooops. I think we are still ranting!!!)

The Uber decision matches those facts. Proper investigative process was followed by the Fair Work Commission and, it would appear, the Fair Work Ombudsman. On the basis of the facts, Uber (gig) drivers are engaged in independent work.

It’s important to base analysis on facts. We’ve put together an analysis of the facts and issues relating to the Uber/gig economy issue. It covers:

And we have a message for the ATO. In our experience the ATO demonstrates gross incompetence in its investigations and analysis of who is an ‘enterprise’ for the purposes of ABN allocation. The ATO needs to learn from the Fair Work Commission and the Fair Work Ombudsman and become competent in this area.

Some sensible facts in the ‘gig’ economy/small business debate

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Sunday, March 24, 2019

We recently discussed the re-emerging campaign against self-employment being cooked up principally by unions and the Labor ‘left’. We’ve seen this over many decades and this time the ‘evil’ is the gig economy.

  • And we’re witnessing the Victorian government conducting what we see as a cooked-up Inquiry. Frankly, we think they’ve written the conclusion before starting the Inquiry. In our detailed submission we’ve said that the discussion paper is littered with misinformation, plainly wrong on basic facts and implies a forbidding imaginary scenario. Yes, we have our bias (a big bias) in favour of self-employment.

But it’s really good to see some sensible, independent, factual analysis injected into the debate. Bernard Salt is one of Australia’s top demographers. He talks facts. In his most recent article in The Australian he supplies some illuminating information.

Sole trader numbers surged, he says, by 65,000 last financial year. And

  • “Further analysis revealed that many of these new businesses are connected to the gig economy…”

However, this article focuses on small businesses employing 1-19 workers. He says

  • There are “823,000 such businesses in Australia employing, by my estimates, six million workers or close to half the nation’s workforce.”
  • “Over the preceding decade … small business … expanded by 80,000 supporting about half a million jobs.”

But it’s the diversity that’s interesting. He says

  • “Non-standardised product or service delivery is where small employing businesses are expanding, delivering bespoke housing solutions and one-on-one medical advice.”

He points out where this is happening and where it needs to happen.

  • “There is evidence of a rising pool of small employing businesses—a kind of start-up culture if you like—emanating from the Sydney, Melbourne and even the Adelaide CBDs. But this is not the narrative in Perth or Hobart or Canberra or Darwin.”
  • “But if we are to cultivate a culture of entrepreneurship then we need stronger small-business hubs delivering measurable net new employing businesses in the smaller states and territories.”

Bernard urges politicians to get the policy settings right because it’s here where the big growth in jobs will come from.

We agree. That’s why over the decades we’ve fought for reforms to work safety laws, the Independent Contractors Act, small business unfair contract laws, Small Business Commissioners and more. These are the sort of policy settings that support small business and the creation of jobs. The anti-gig economy campaign is dangerously irrational in its non-factual attack against business systems that create small business opportunity.

But, on a big upside: We’re becoming quietly hopeful that we’re about to see a big advance from the ATO in its processes for dealing with self-employed small business people. We’ll keep you informed.

Powerful ‘anti’ forces need a bucket of icy-cold water poured over their heads

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Monday, March 04, 2019

According to demographer Bernard Salt, there’s a big cultural shift in Australia towards being your own boss. And it’s a lifestyle thing. In The Australian Bernard referred to:

… profound changes to the way we earn a living…Part … caused by the rise of the gig economy … but part is also due, I think, to the ageing of the population and to a cultural shift in attitudes to work.

Bernard said that there has been a six-fold increase in the sole-trader population since the end of the mining boom. He gives a break-up of the data by state, capital city and regions. He refers to entrepreneurial ‘hotspots’ such as the Melbourne CBD, but also regions such as Kings Meadows in Launceston with a 23 per cent increase. Bernard asks:

What could be better than living in a seachange idyll? Being your own boss in a seachange idyll like Victor Harbor, or Torquay, or Busselton, or Ulladulla, or the Gold Coast.

He concludes that:

A new be-your-own-boss narrative is driving the Australian obsession with lifestyle.

But there’s a problem. There’s a whole bunch of powerful groups who hate this Australian lifestyle urge.

The anti-gig economy thrust is simply an excuse to hit self-employed people, a decades-old agenda.

And a key indicator of what’s coming is the Victorian government’s inquiry into the gig economy intended, in our view, to build a false reason to clamp down. The inquiry’s discussion and approach, however, are full of misleading drivel. And we’ve said so in our lengthy detailed submission, In Search of Unicorns:

  • For more than a century, variants of the same gloomy fiction have been cycled and recycled, almost in clock-like manner. On-demand platform work is the latest variant of a moral fairy-tale that pits the ‘good employee’ against the ‘wicked independent contractor’.
  • …the (Victorian) Background Paper … assumes an air of suspicion about independent contractors.
  • So much of the discourse around both the platform economy and the independent workforce is inflated, overstated and alarmist … [with] … nightmare scenarios of Technological Armageddon and the End of Work.

Oh spare us the idiocy! And we appeal that please—

  • A good bucket of icy cold-water needs to be tipped over the protagonists of this hyperbole. That includes governments.

It looks like we’re in for a long argument with these self-employed haters. But that’s what we’ve been doing for almost 20 years!

The gig economy is under attack—from people who seemingly don’t care about the harm they do

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Wednesday, October 17, 2018

I was in an Uber the other day and got talking to my driver. He was a Sikh. We had quite a conversation about his religion and the importance of it to his everyday life. I’ve never met a Sikh before! He was most interesting. I asked him why he drives Uber. His response was quick. He loves being his own boss. He can make his work fit around his family commitments.

My Sikh driver reminded me of why we at Self-Employed Australia have been doing what we do for almost 20 years. We’ve been defending the right of people to be self-employed. We’ve seen attacks from many directions. The attackers always seem to argue that somehow ‘we’ are being exploited. They can’t seem to contemplate that in self-employment there is economic liberty and freedom! My Sikh driver knows and lives that reality.

Now we are witnessing a renewed attack. This time the new ‘evil’ is the gig economy. We first discussed this in August this year. This ‘gig’ attack is just another of many attacks we have seen that ‘squeezes’ self-employed people through regulation.

On the basis of our experience and analysis, the outcomes sought in these current attacks are clear. The ‘anti-self-employed’ antagonists want to impose ‘sham employment’.

It looks like we have another long and hard counter-campaign on our hands!

Join us in the campaign. Your membership contributions help us maintain the fight. Join here.

The gig economy is exploitation by an evil empire. Discuss!

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Wednesday, August 22, 2018

The supposed ‘rise’ of the ‘gig’ economy is causing much debate on whether its impacts are good or evil for society. There’s much confusion.

The author of a new book, Gigged: The End of the Job and the Future of Work, was interviewed on the USA Public Broadcasting Service (PBS) this week where the social issues were discussed. The four-minute interview can be seen here.

The debate is, in fact, quite old. In my book, Independence and the Death of Employment, first published in 2005, I addressed all the issues brilliantly (of course!) (Um, my book is not on a best-seller list but I’m sure my brilliance will be recognised one day in the dim, distant future!!)

The gig economy is in truth just another model of independence at work. And people who work in the wage-‘controlled’ employment environment have great difficulty understanding true independence at work. This particularly applies to academics, bureaucrats, unions and policy-makers who overwhelmingly work in the ‘controlled’ structures of managerial employment. It’s these people who often generate the debate, accusing ‘work independence’ of somehow being exploitation!

The International Labour Organisation started debating this in 1996. But in 2006 it resolved that self-employment was legitimate. We attended the debates in Geneva and wrote this report on the outcomes.

But questions about the legitimacy of work independence were raised in Australia again late last year (2017) when the ATO decided to deny Australian Business Numbers to self-employed transcribers. We fought successfully to have the ABNs reinstated. Here’s our campaign and we described the policy issues here. We’ve discovered the extent to which the ATO was acting on its social view—namely, that self-employment is bad—and that tax collection was not the issue.

We see this debate now reaching a new fever pitch. The issue is simple. Is managerial controlled wage employment the only legitimate form of work? Or is independence and self-control of work—that is, self-employment—also legitimate and worthy? In many respects it’s a debate about freedom!

It’s the gig economy, stupid!!

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Friday, January 19, 2018

Technology is crushing traditional jobs. The command-and-control factory is being replaced by robots. Banks are rapidly removing pen-pusher jobs by the tens of thousands!!! For those with an economic bent, the Milton Friedman-type assumptions about how an economy operates are dead!

What’s taking over is the ‘gig’ economy. But what is it?  It’s pretty simple really.

Traditional jobs (Friedman assumed) involved an employer having a legal ‘right to control’ an employee. The gig economy does away with this wage-slave-like setup. Instead, the contractual relationships are entirely commercial. The on-line business platforms that facilitate this are many. For example, Uber (ride sharing), Airbnb (accommodation), Amazon (manufacturing and retailing), Airtasker (home and other services) operate like stock markets.

The platforms connect people wanting something (for example, to buy shares) to people delivering something (for example, selling shares). The platforms facilitate and manage the commercial transactions including invoicing, payments and so on. Every transaction is commercial.

If you’re scared of this, well, move over and crawl into a hole!!! Some people claim it’s a crisis and we have to regulate this quickly as if its employment.

But other jurisdictions are being positive:

And, in a major development, the Australian Fair Work Commission has just declared an Uber driver to not be an employee. This makes sense.

The importance of properly approaching the gig economy cannot be underestimated. To fail to embrace it is to be a wrecker of opportunity and an oppressor of people.

This is one reason why we attacked the Australian Taxation Office hard late last year over its removal of Australian Business Numbers from 16 gig economy workers. Yes, we were damn angry with the stupidity of the ATO and succeeded in having the ABNs reinstated. Now that were a bit calmer, we’ve summarized the ‘transcribers’ case here.

And we’ve just added a new piece about how this transcribers case relates to the gig economy.

Remember, this ATO-style attack can happen to anyone. The ATO has gone rabid on this. You need protection. Check it out here.