Self Employed Australia

"Everyone needs an Advocate"

“Everyone needs an Advocate”

Campaigns

We give evidence on Tax Fairness solution to UK Parliamentary committee/group

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UK-parliamentFor over a decade we’ve been campaigning for fairness and for rule of law principles to be applied when the ATO assesses and administers alleged tax debts, particularly those of self-employed, small business people.

We have found a template ‘solution’ based on how USA law requires tax administration fairness from the IRS. Here’s a video explanation and a one-page summary.

It transpires that the UK also has very similar problems with its tax administrator (HMRC) abusing self-employed people. We have a long-standing campaigning partnership with Contractor Calculator in the UK who, like us, campaigns for tax administration fairness. The UK problem is so severe that an all-party parliamentary group/committee has been formed to seek a solution to HMRC abuse. Some 250 UK MPs are in the group/committee.

Last month (on 21 February) we gave a joint presentation to the Taxpayer Fairness Group’s senior parliamentary members. We offered them a vision of a solution based on the USA model which we also recommend for Australia. Three of us gave presentations followed by Q&A (YouTube links below).

Ken-Phillips     Dave-Chaplin     Jason-Falinski

Jason made some strong points:

“At the core of this is whether governments exist to serve people or citizens exist to serve government … we have provided tax agencies in the Western world with extraordinary powers that are in breach of some pretty fundamental legal rights…”

We provided the UK parliamentary group with:

Almost exclusively, tax debates are about how much money is or should be taken out of which pockets of the people. But the way tax laws are administered cuts to the heart of the power of government over the people. And by ‘government’ we mean the faceless tax bureaucrats who administer the inevitable maze of tax laws.

Tax law administration must be subject to transparency, accountability and checks and balances so that the rule of (tax) law applies in a practical way. That is not the case in Australia nor, it seems, in the UK.

Our campaign is to secure that rule of law. The US model offers a practical template for reform.

 

Trucking billionaires business boost

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big-truckingFederal Labor is set to bolster the businesses of trucking billionaires and corporations. Unsurprisingly, the billionaires are more than happy to have this happen.

Naturally, Labor’s billionaires business boost is not being promoted this way by Labor. Labor says that its plan is about making trucking rates ‘safe’. But anyway this is looked at, this is about eliminating independent truck drivers as competitors to the big trucking corporations and billionaire trucking empires.

We know this because Labor set up a ‘safe rates’ scheme in 2012. But it wasn’t until 2016 that the Road Safety Remuneration Tribunal (RSRT) started dictating trucking rates. It was a disaster for the 35,000 affected self-employed, long-haul truck drivers. Large numbers of these truckies were in the process of being bankrupted and several desperate truckies committed suicide. The Small Business Ombudsman released a report on how bad the laws were.

We campaigned hard against the laws to the extent of mounting a High Court challenge to them. In our hearing before the Chief Justice of Australia he stated that we “may have an arguable case.” However the Turnbull government passed legislation to close down the RSRT in 2016 and we didn’t need to proceed with the rest of the legal challenge.

This saved the livelihoods and businesses of these thousands of hard-working, self-employed Australians. What we know from the 2016 experience is that the ‘trucking safe rates’ argument has a theoretical claim about safety, but is in fact about putting small business people out of business to the benefit of big business. That’s the truth.

The argument about safety is heavily promoted by the Transport Workers Union (TWU) and goes something like this. The TWU says independent truck drivers work too hard. They drive long hours and the rates they charge are too low. These low rates mean that independent truck drivers have crashes. So, according to the TWU, the independent truckies need to be forced by legislation to charge more. Then the roads will be safe. That’s the TWU argument.

But look at the argument from a different angle—that is, from the viewpoint of competition.

Self-employed independent truck drivers are big competitors to the big trucking conglomerates (and they tend not to be union members!) By the nature of their businesses, independent truckies are able to be highly flexible. If, for example, an independent truckie is long-hauling between Perth and Brisbane and different jobs pop up along the way, they can respond in ways that the management bureaucracies of big companies cannot. This gives the independents big competitive advantages.

It’s this flexibility and fast responsiveness to customer needs that is key for the independents. But this does not suit the big transport bosses. And it does not suit the TWU which effectively enforces membership through the big transport bosses.

Now that Labor is in government and seems to have the support of the Greens in the Senate on labour issues, Albanese’s Labor is looking to target independent truck drivers again. Labor has announced that it intends to re-introduce a scheme of ‘safe’ rates for ‘employee-like’ independent truck drivers. They will do this in the second half of 2023.

Again, they are going to control the rates that independent truck drivers must charge. This will be a repeat of 2016. Independent truck drivers will be pushed into hardship, bankruptcies and suicide. Big trucking billionaires will get richer. This is Labor’s direct attack against Australian small business people.

ATO breakthrough on worker classification

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worker-classificationOne of the most controversial and confusing issues for tax and labour law over the last 50 years is whether a worker is an employee or self-employed.

In February 2022, the Australian High Court released a ruling that establishes major clarity in the law on this issue. We referenced and summarised the ‘Personnel’ decision in August 2022. We included links for SEA members to:

New ATO rulings

Now the Australian Taxation Office has released new rulings (just before Christmas 2022) on the employee vs self-employed issue, based on the clarity established by the High Court in ‘Personnel.’ We consider the ATO rulings to be outstanding, providing explanation in clear lay language.

We think the ATO rulings are necessary reading for accountants, human resources and industrial relations managers, lawyers (yes!) and anyone needing clarity on worker status in Australia. This particularly includes self-employed people. There are two rulings:

The rulings we supply (for members) include highlights to assist understanding.

Employee or self-employed – Overview of ATO Ruling D3

We will provide a summary/commentary on the employee or self-employed (D3) ruling shortly. But in brief:

  • If a written contract is comprehensive and clear, it stands as the determinator of worker status.
  • If there is no written contract, or a contract is unclear etc., the standard ‘multifactorial’ test applies with the ‘totality’ of the relationship providing the answer.

Worker status – compliance with obligations – Overview of ATO Ruling D5

The ATO has a need to define worker status to ensure community compliance with:

  • PAYG – that is, determining who has responsibility to send income tax withholding payments to the ATO – the worker or the engaging entity?
  • Superannuation – that is, whether an engaging entity must make superannuation payments for a worker.

The ruling on this sets up a simple matrix which explains when the ATO will investigate. This depends on whether the compliance behaviour of the parties is deemed to be very low, low, medium or high-risk. These are explained clearly in the (D5) ruling.

Frankly, we think that anyone who allows their business to fall into the medium or high-risk areas is foolish and asking for trouble.

Non ATO tax issues – helpful but some caution needed

Even though the D3 ruling (employee or self-employed) is ATO-specific, it has strong practical application to other areas, such as definitions for workplace relations. (Note. The ATO is careful to state that the ruling is ATO/Tax/Super-specific only)

However, the law that the ATO must apply on PAYG/Superannuation is exactly the same law (at first instance) that applies to workplace relations—that is, the ‘standard’ or ‘common law’ definitions as declared by the High Court. Given that, in our view, the ATO ruling (D3) is so clearly written in layperson’s language, it is likely to prove very helpful for other areas such as workplace relations.

Even though the same helpfulness applies for workers’ compensation, OHS and payroll tax (all state issues), considerable care should be taken where these laws extend their reach to some types of independent contractors/self-employed. These ‘extension’ laws vary from state to state and are not the same as the ATO’s ‘extension’ laws.

Conclusion – Congratulations to the ATO

We consider these ATO rulings to be a major step forward. The best tax systems maximise voluntary compliance by taxpayers. This cannot occur where the rules are confused or badly explained. On this issue the ATO rulings generate considerable clarity. We recommend that our SEA members take the time to read these rulings. They are not onerous reading and quite clear.

Outcome: Victorian Supreme Court Action

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supreme-courtThis is a special email to update you on the outcome of our mandamus application to the Victorian Supreme Court over WorkSafe Victoria’s failure to prosecute individuals and entities over the 2020 Hotel Quarantine disaster.

On 2 December 2022, we informed you of the Court’s ruling (delivered that day) which declared that we had not lodged our application ‘on time’. That is, our application was dismissed on a technicality. We disagree with and reject this decision.

For fuller details on the case:

  • This link is to the ruling of 2 December. We’ve highlighted some sections.
  • This link gives an overview of the 3-year campaign, plus some commentary on the ruling.
  • We have made available a full commentary on the ruling to SEA members.

Here’s a summary

Supreme Court rules require that lodgement needs to occur within 60 days of when the named government department failed to do what that department is required to do by law. The issue was: what was that date?

WorkSafe refused to answer whether they had investigated those named entities as required.  But the ruling states that, as of 29 September 2021, we should have inferred, concluded or assumed that WorkSafe had investigated all the 26 entities/individuals that we named (the Victorian Premier, etc). (Our application was lodged on 14 February 2022.)

We say that that conclusion is wrong and that we did not and could not have known. The Court’s ruling was based on interpreting drawn-out correspondence spanning many months about who said what to whom and what we should have inferred by what was said/written.

The ruling then does two curious things in our view.

  1. It spends considerable time rebutting many of our published allegations/assessments we made as to why individuals/entities should be prosecuted. Why bother to do that when the dismissal of our application on technical grounds was all that was needed? The ruling reads as a defence of the government individuals and entities we named.
  2. The ruling then says that if the court allow SEA’s application that this would put the individuals we named under ‘stress’ and this should not occur.

It seems that the Court is saying that an individual should not be prosecuted for alleged offences if the prosecution were to cause the individual ‘stress’. We ask: Would this principle apply to an accused murderer? That is, should an accused not be prosecuted because they would feel ‘stressed’? We find this a disturbing concept. We will have more to say on this issue.

SEA is committed to continuing our ‘Not Above the Law’ campaign, along with our other campaigns on public policy issues affecting self-employed people and more.

I’m available to chat should you want more information or explanation.

Ken Phillips
Executive Director, Self-Employed Australia
0412 393 692

 

Decision Supreme Court Victoria – Hotel Quarantine

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not-above-the-lawAt 10 am this morning His Honour handed down his decision on our application related to the 2020 Hotel Quarantine Program and the 801 deaths.

His Honour ruled that our application for a writ of mandamus (that would have required WorkSafe investigate the individuals and entities we named) was not submitted within the 60 days required under Supreme Court rules. Therefore our application was dismissed.

We will supply more information soon.

We seek prosecution of Victorian EPA and WorkSafe over chemical waste fire in 2019

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prosecution-chemical-fire-NATLOn 5 April 2019 a chemical storage and processing warehouse in the north-western suburb of Campbellfield in Melbourne erupted into flames. The fire was a toxic inferno that took several days to fully extinguish.

Evidence now available is that the fire was a direct result of the conduct of the Worksafe Authority of Victoria and the Environment Protection Authority of Victoria (EPA). This EPA/WorkSafe conduct put at critical risk the health and safety of workers, firefighters, other emergency response personnel and community members. Warehouse employees and firefighters were injured.

Self-Employed Australia has issued Section 131 notices (under the Occupational Health and Safety Act of Victoria) to the WorkSafe Authority of Victoria requiring WorkSafe to:

  • prosecute the EPA; and
  • for WorkSafe Victoria to prosecute itself

for breaches of the Occupational Health and Safety Act (Vic) in relation to the fire.

Today we publish on our website the evidence warranting the prosecutions. The evidence is sourced from court documents that have only recently become publicly available.

You will find here:

plus two critical documents, namely:

Now that we have issued the Section 131 Notices, WorkSafe has legal obligations to investigate with a view to prosecuting. It is for the courts to decide if WorkSafe and/or the EPA are guilty.

The evidence is unequivocal, however, that both WorkSafe and/or the EPA:

  • Knew that the Campbellfield facility had exceeded its legal limit for the storage of dangerous chemicals, thereby creating the fuel for the massive fire.
  • Allowed, sanctioned and ordered the storage of illegal quantities of dangerous chemicals at the facility.
  • Were complicit in ordering, allowing and supervising the transport of dangerous waste chemicals to the facility to the extent that the facility exceeded its legal licensed limit by a multiple of three.
  • The EPA ordered the Campbellfield facility to process the dangerous chemicals even though it issued a conflicting order to stop processing. It was this processing that directly caused the fire.

The evidence irrefutably establishes breaches of the OHS Act and demands the prosecution of the EPA and WorkSafe.

More information soon.

Why we do what we do. No-one should be above the law

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above-the-lawAs I was leaving the court at the close of our most recent Victorian Supreme Court hearing on 4 October over the 2020 Hotel Quarantine debacle, I was asked by a journalist, “why do you do what you do?”

The journalist was observing that, in taking on WorkSafe Victoria, we are taking on the might of the Victorian government. Further, there is no personal gain to be had for anyone at Self-Employed Australia in doing this. In fact, some would argue that in doing so, there may be all sorts of personal risks. And the court action consumes substantial resources with frequently very stressful work. The journalist was curious as to our motivation.

The answer is simple. In an (allegedly) democratic country constrained by the rule of law, no-one is or should be above the law. We are fighting, as best we can, to have that principle of democracy applied in practice. Democracy and the rule of law should not simply apply on election days, but be the living experience, every day, that guides our communities.

It’s like this. Governments make rules that apply to everyone. But far too frequently government excludes itself from those same rules. This happens when legislation specifically removes government from the reach of the law. It also happens when government institutions which regulate and enforce the law fail to, or (worse) refuse to, apply the laws in order to protect themselves or others.

Perhaps one of the greatest historical and enduring battles of human organisational effort is to decide the proper role of government. There are perhaps two broad aspects to the battle.

Some assume that government (by its nature) is always good, always pure and should reign supreme. Further that private enterprise is always evil because of the profit motive. (Yes, this simplistic view was passionately put quite recently in an online consultation I attended with a large government-funded think-tank!)

The counter-argument often put is that government is the source of oppression and must be constrained, reduced and curtailed.

The truth I think, is sandwiched between the two views. There is nothing holy or sacred about either government or private-sector operations. There is just the reality of human behaviour in which both the best and worst of human instincts play out against each other.

The resolution of this problem must be that we have laws that apply equally to everyone. The practices of transparency and accountability must be embedded in law and apply whether individuals work in government or the private sector.

Too frequently, however, government writes itself out of the rules that are written for everyone else, most notably the private sector.

Take this example. This Wednesday past (9 November) beefed-up laws giving protections from unfair contracts came into effect. That’s fabulous. But get this: The laws don’t apply to government departments. So a government department can, for example, engage an IT contractor but impose an unfair contract upon them. A bank cannot do the same thing. The hypocrisy is monumental. It debases the rule of law.

Another example. The ATO recently took submissions reviewing its policy for how it treats taxpayers. But these rules don’t have the force of law. Hypocrisy again. In our submission we challenged the ATO to seek to have parliament pass legislation to enshrine the fair treatment of taxpayers in law.

Our campaign to have the Victorian WorkSafe Authority prosecute individuals and government departments for OHS breaches over the 2020 hotel quarantine debacle, is a campaign for the rule of law. No-one should be above the law. (In case you’ve been following this matter, we’re still waiting for the court ruling.)

Ensuring that these simple principles of transparency and accountability apply equally to everyone is what motivates us. After all, self-employed people are always held accountable for what they do. Perhaps this is why we’re so passionate about equality of accountability.

We’ll have more news soon.

2021: A Victorian Health Department Space Odyssey – Where is Hal?

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space-odysseyTry this piece of strangeness. We now have ‘proof’ that the Victorian Department of Health makes decisions and does things without any apparent human involvement.

The Department, we assume, must operate like Hal in the great, classic sci-fi movie 2001: A Space Odyssey. Hal was the super computer that ran the spaceship without human involvement. Somewhere in the Health Department ‘Hal’ must exist.

The ‘proof’ of Hal is contained in a 4 October 2021 memo to executives in the Health Department. On 29 September 2021 the Victorian WorkSafe Authority announced it was prosecuting the Department of Health over the 2020 Hotel quarantine disaster which resulted in over 800 deaths. The 4 October memo states:

“WorkSafe have advised that no individuals from the department are, or will be, charged.”

Here’s what this means. WorkSafe has found sufficient evidence of breaches of work safety laws to start a criminal prosecution of Health. We updated you on this last week. In other words, the Department did or failed to do things that has resulted in criminal charges being laid. BUT. According to WorkSafe’s advice to Health, no humans committed any of the criminal things. The Department acted criminally but no human acted criminally. Go figure!

But see. We told you so. It’s Hal! And now like the children’s book ‘Where’s Wally?” we have to ask ‘Where’s Hal?’

Here are just some of the questions that must be asked:

  • How did WorkSafe conduct a criminal investigation without interviewing any humans?
  • Or did WorkSafe interview and question humans?
  • If WorkSafe did interview humans, did any of those humans explain how the Department does things without humans making decisions or doing those things?
  • Can humans in the Health Department explain how the Department operates without humans making decisions or doing things?
  • Did WorkSafe meet or see Hal?

Of course, these questions are all nonsense and just as nonsensical as WorkSafe only prosecuting Health but not individuals.

In truth a government department is just a bunch of humans making decisions and doing things. A ‘department’ does not and cannot act criminally. Only humans act criminally. There is no Hal in the Health Department. Only humans.

But WorkSafe is acting on a fantasy, a Space Odyssey.

This is not just an isolated Victorian issue. It cuts to the heart of whether government in Australia operates impartially so that no-one is above the law, including government itself. It’s no joke. It’s serious!

Here’s the Health memo obtained through FOI.

Note the 104-page Charge Sheet but with all important information blanked out!

Prosecution of Victorian Health over 2020 Hotel Quarantine Disaster—Update

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It’s been a little while since we updated you on the legal process of prosecuting the Victorian government over the 2020 Victorian Hotel Quarantine disaster that resulted in over 800 deaths. What’s at stake is whether governments hold themselves accountable to the same standards to which they hold the rest of us.

It’s quite clear that our Not Above the Law Campaign forced Victorian WorkSafe to prosecute the Department of Health. We have to ask the question: how genuine is that prosecution? We’re chasing this and here’s an update:

  • The prosecution of Health was announced on 29 September 2021 and involved the laying of 58 charges. Since then there has been NO, that’s ZERO, further information.
  • We decided to check things out. We went to the Melbourne Magistrates’ Court and were told that there was an online directions hearing on 26 May.  Members of the public could attend and we were told we’d receive an email link. The link arrived. We dutifully attended only to discover that we’d been sent the wrong link. Goodness—what an unfortunate mistake by someone!!!

SO

  • We tried to hunt down the case number. What an effort that was, given that the case name has not been made public from what we could discover. Victory! We discovered the name. It’s Victorian WorkSafe Authority v The Crown in the Right of the State of Victoria (Department of Health). Case number M12097325. If you want to follow the case, check the Magistrates’ Court website, choose the “Criminal List” button in the top left corner and put the case number in the appropriate box. Members of the public have a right to attend, but it seems you’ll need to ring the Magistrates Court to receive a link (assuming you’re sent the correct link) or else attend the hearing in person.
  • Next step is that we’ve applied to the Court for the release of all court documents. We’re after the charge sheet, summons, prosecution summary and so on. Lawyers tell us that in criminal cases (OHS charges are criminal) such documents are ordinarily public documents. But the release will be decided at the next hearing date, Friday 17 June at 10 am (a Committal Mention). It will be interesting to see if WorkSafe and Health both apply to keep the documents hidden from the public.

Justice is something that must be done and must be seen to be done! But, goodness, with the Health prosecution there seems to be a lot happening to keep it ‘unseen’. We’re chasing this up and will update you after the 17 June.

ABC’s Dr Norman Swan says badly degraded Victorian Health capacity to blame

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norman-swanThe ABC’s Dr Norman Swan explains why Victoria did so badly with Covid in 2020. Watch his comments here (47sec): https://www.youtube.com/watch?v=x3h8mS-6VUM

Dr Swan says Victoria has

“… 88 different health services which don’t look after the population unlike most other states (the Victorian government)… long ago degraded … the public health capacity, and in 2009 they ran the white flag up … Dan Andrews was the Health Minister.”

This analysis by Dr Swan reinforces why we must proceed to push for the prosecution of the government and responsible individuals (Premier, etc.) over the 801 Hotel Quarantine deaths in 2020. If WorkSafe fails to do its job by prosecuting individuals, the degraded Victorian health system will continue to put people at risk. It’s unsafe.

Running parallel to Dr Swan’s comments is an analysis by a public administration academic who case studied the 2020 Hotel Quarantine program. His report Hiding in plain sight: Vulnerability, public administration, and the case of Covid-19 hotel quarantine sets out a table that shows all the actions and inactions of the government that led to the 801 deaths disaster. The paper says:

“The Covid-19 HQ Inquiry found that a series of actions and inactions surrounding decisions by politicians, practitioners, and policymakers with responsibilities for public administration portfolio areas gave rise to accidents which brought failures and subsequently a crisis into existence.”

“… the leadership and functional expertise at group as well as individual levels was unable to take meaningful action to ensure that the program was fit for purpose.”

However, the paper focuses exclusively on the notion that the disaster should be treated as a learning experience for public health administration. Some people might believe that no individuals need to be held to account to enable ‘learnings’ and change. Such a position would be plain wrong—even dangerous and unsafe in our view.

We see this attitude too often in public administration. The people who make the decisions (politicians and bureaucrats) are rarely held personally accountable for their decisions. The ‘blame’ is isolated and attached to the ‘system.’ But this is not the standard applied to business or the community. Small business people, in particular, are held personally accountable for every action they take. We say the public sector must be held to the same community standard.

This is why we say that Victorian WorkSafe is making things dangerously unsafe in only prosecuting the Department of Health and not the individuals who were the decision makers in the Hotel Quarantine disaster. Community standards of individual responsibility must be applied. No one is above the law.

More developments and news soon.