Self Employed Australia

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“Everyone needs an Advocate”

News Updates

‘Homework’ takes on a totally new meaning … for adults!

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The global energy giant BP has told around 25,000 of its staff that work from home is now permanent. This is confirmation that ‘home-work’ is now globally locked in and not a temporary Covid ‘thing’.

BP is selling offices and moving to smaller premises as staff move to working two days and more from home. This is evidence of a working revolution. It’s a revolution that will throw the legal, academic, tax and political work-regulation establishment into utter confusion.

It makes the recent UK court decision to declare Uber drivers to be a ‘little bit’ employees combined with destructive self-employed tax laws, to be dangerous for the UK economy. It makes the Californian law making self-employment illegal look like a wall of sand trying to hold back an incoming tide. It makes the Victorian government’s agenda to outlaw self-employment look plain dumb.

The fact is that home-work will result in a productivity boom that will be difficult for statisticians to measure. How do you measure output per hours worked when someone is writing a report at home, stops, puts on the washing, returns to writing, stops, hangs out the washing, checks emails, heads off to collect the children from school and has several business phone calls in the car driving to pick up the children? How to you measure the huge time saving when the ‘commute’ to work is from your bedroom to the corner office in the spare bedroom?

But these are the productivity ‘realities’ that self-employed people have enjoyed and delivered for years. This is the self-employed work/life ‘balance’ truth which is now being realized by employees at BP and will predictably move through the corporate sector.

But here comes the push-back.

Property investors are worried about their CBD skyscraper investments.

Corporate power junkie managers wonder how they will ‘control’ staff.

Work safety officers wonder about what happens when people injure themselves at home when working.

Accountants can’t work out how to monitor people on hourly based pay rates.

‘Exploitation!’ scream unions and ‘worker rights’ academics!

It’s all nonsense of course. The incoming tide is largely located in the knowledge-based side of economic activity which is shifting from ‘hours’ to ‘results’ assessment of work. It’s been driven forward by technology for two decades and more, but Covid has given it a great kick along.

What’s happening is the disintegration of the specific legally defined ‘employment’ relationship.

The reality of self-employment based on self-control and payment on results butts up against the social and legal ‘employment’ assumptions. Employment as a generic term is looking more and more like self-employment as time-based pay is replaced by results-based remuneration.

The post Covid home-work revolution is pushing this trend harder. As more people work from home, even if not full-time, results-based remuneration becomes the logical outcome. Hours-based remuneration becomes awfully complicated.

We can probably be sure that this revolution in home-work, ‘employment’ (looking like self-employment) will be a major productivity booster.

Australian unions see flying ‘gig’ pigs landing from the UK

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You may have seen reports that the UK’s top court has decided that Uber drivers are not independent contractors. The UK decision seems to support the unions’ campaign against the gig economy. It gives the appearance of international support for Federal Labor’s anti-gig (anti-small business) policy announced earlier this month.

However, sorry to disappoint the small business-haters in the unions and Labor, but the UK’s decision has no relevance to Australia.

The facts in Australia are that Uber drivers have been declared to be independent contractors by:

And last year (2020) the FWC declared that Uber Eats delivery people are independent contractors. In this 2020 decision the Commission looked at the UK law above and stated that its irrelevant to Australia. Here’s why.

In Australia we use the well-known common law tests which identify whether there is a commercial contract or an employment contract. All independent contractors (self-employed people) earn their income through a commercial contract. This is locked in under Australia’s Independent Contractors Act 2006. It protects the right of people to be their own boss.

In 1998 the UK created statutes which say that even if you’re an independent contractor you can still have access to some employment ‘rights’. This is the ‘little bit pregnant’ idea. The UK statute says that someone working under a commercial contract can be a ‘little bit’ an employee. This is the statute that has been ruled upon by the UK Supreme Court last Friday in the Uber case.

The UK has made, and is making, a mess of its treatment of self-employed people. Self-employed UK people have been treated as economic trash during the Covid crisis, receiving little if any income support. For 20 years the UK tax office (HMRC) has been trying to stop the self-employed from having business tax rights. The Uber decision now throws massive uncertainty into commercial contract law.

Fortunately, in Australia since around 2006, we’ve developed policies to support and ‘protect’ self-employed people. This has included the same access as employees to the federal parental leave scheme (2010), JobKeeper and JobSeeker (2020) and the introduction of unfair contract laws (2016) and their planned ‘beefing up this year. Also, this year the full pay-on-time laws for small business should pass.

We ‘protect’ small business people by giving them access to a practical commercial ‘rule of law’ environment, backed by sensible access to social security support where needed. This creates a stronger economy with small business at its core. Let’s hope that the UK small business destruction disease doesn’t spread to Australia.

For a longer version of this article which includes a link to the UK Supreme Court ruling, click here.

ATO abusing its powers – manipulating the law to abuse people

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Our campaign to reform the ATO continues. Good grief it’s an exhausting process! But the ATO keeps demonstrating why the reform is needed because the ATO keeps behaving badly.

Today we’re highlighting another case of ATO bad behaviour.

Many small businesses are structured as trusts. Most are family trusts. The ‘beneficiaries’ of such trusts are typically family members. A trust can distribute profits to the beneficiaries who then pay the tax.

In the ‘Carter case’ (see full details here) the ATO ‘assessed’ that the trust had made a profit. And here’s what then happened:

  • The ATO declared that Natalie Carter, a mother with two school-age children, had received profit from the trust as a beneficiary.
  • The problem was that no profit had been made. The ATO assessment was wrong. The ATO didn’t deduct expenses (interest etc) from the trust revenue. The trust had not sent any profit to Natalie because there was no profit.
  • But the ATO still said there was profit and forced Natalie to pay tax, even though she had no income.
  • Natalie then did what has been accepted as law for thirty years. She signed papers legally rejecting the (theoretical) profit. Sounds sensible. But no! The ATO refused to refund the tax already paid.
  • Natalie appealed to the Federal court where all three judges agreed with Natalie. She owed no tax! Natalie won. The  ATO lost.
  • But the ATO is now appealing to the High Court, arguing that even if someone has not received a profit they must still pay tax. Crazy!!!! It’s just stupid.

Here’s how this weird obsession by the ATO to win—even when they are wrong—would play out. Say this 30-year law were chucked out.

  • Take a divorce where the husband is a real b…. scam man. He has a business with a trust. He has the trust make a profit but then disappears overseas with all the money and his new mistress. He also makes a theoretical profit distribution to his ex-wife. The ATO says the ex-wife must pay the tax. But if the wife cannot legally declare that she doesn’t want the theoretical profit she is screwed. The ATO force her into poverty. Nice one ATO!

Sensible laws are there to protect people from scammers. What the ATO is seeking to do in the Carter case will enable the ATO to facilitate corrupt behaviour.

The Carter case is just another example of why the ATO must be reformed.

Let’s be clear. The reform of the ATO is needed in the audit and enforcement division where abuse of small business people is pretty much routine. That division is out of control.

Covid and the oppression of government regulation and regulators

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As we look to 2021 to be a better year than 2020, perhaps one of the shocks of Covid-19 has been how quickly our freedoms and liberty have been crushed under the weight of health dictates. It’s been done for our own good—that is, to keep us all safe from a silent, unseen enemy killer.

With luck, we will emerge from the Covid crisis this year with freedoms being returned. One fear, however, is that once governments, whether of left or right persuasion, taste the seductive power of authoritarianism, they become addictively hooked. There’s nothing some bureaucrats love more than the scent of their own power first thing in the morning.

That’s why at Self-Employed Australia we were pleased to receive an invitation from the office of Prime Minister and Cabinet to make comment on a regulation review it is undertaking. The review is looking at the expectations of regulators, their reporting and so on. In other words, the Prime Minister is reviewing how regulators should be held accountable. That’s a positive thing.

In our January submission to PM&C we’ve said that instructions to regulators from Parliament should be clear and transparent. We’ve said:

Our recommendation to the PM&C review is to keep firmly in mind that the community needs clear “road signs” in all regulatory matters. There should be a simple question asked of all regulations, namely:

  • Does the regulation provide clear and practical sign posts that can be understood by the community and the regulator in their day-to-day application?

That is, regulators should not be in a position where they can apply their own view of unclear laws to the extent that the regulator effectively become a law-maker ‘on the run’.

We cite the example of the Australian Taxation Office, which all too often is in a position where it effectively ‘creates’ law because unclear legislation enables them to do so. We’ve promoted our ATO reform program as a pathway to fixing the this problem. Here’s our explanatory video.

As Covid recedes (we hope), the balance between health authoritarianism and democracy should be a topic for longer term review. That is, in times of health crisis, are and should health bureaucrats be held accountable under rule-of-law principles?

One example of where bad law gets it totally wrong is in California and its making of self-employment illegal. Go figure? We’ve covered this before. There’s a new YouTube video about this Californian ‘AB5-kill self-employed’ law that explains this. It has good lessons for Australia … of what NOT to do….

California Attacks Santa Claus – A Victorian Agenda?

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Tuesday, December 22, 2020

We’ve covered before the weird laws in California (called AB5) that have made self-employment illegal. On the evidence, it seems that these laws have pushed California’s unemployment rate to 50 per cent higher than the US average. The laws came into force on 1 January this year. But it’s now impacting on Christmas.

Patrick Turnbull has been a Californian Santa for 20 years. He doesn’t work as Santa all year round. That’s logical. Not much Santa work outside Christmas! So, he’s worked as an independent contractor Santa. Now the Californian AB5 law say that’s wrong. In this 4-minute video, Patrick (Santa) Turnbull explains why denying him his Santa ‘rights’ is so bad.

You tell ’em Santa! (click the image for the YouTube video):

What’s worrying is that Dan Andrews’ Victorian government also has an anti-Santa (independent contractor) agenda. We’ve told the government in very blunt terms, ‘leave us alone … we have a right to be self-employed.’ We ‘demand’ the right to be Santa if we want!! Viva la Santa revolution!

Oh yeh. And Merry Christmas! We all deserve it this year.

Oz unions’ weird desire to impose ‘permanent’ wage slavery

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News just out is that private-sector union membership in Australia has plunged to 9 per cent of the workforce. Unions are rapidly becoming public-sector-only, with about 37 per cent of that workforce. Perhaps this is why unions are campaigning so hard to try and force ‘wage slavery’ onto all of us. They are fighting for survival.

The ACTU’s core campaign is against ‘insecure work’. It aims to impose ‘permanent’ employment on Australians. But it’s illogical. In particular their campaign has been mugged in the blink of Covid eye reality.

When planes can’t fly, ‘permanent’ airline jobs also ‘fly’. Empty hotels mean an emptying out of permanent hospitality jobs. When cruise ships no longer cruise, the impermanency of every ship job hits home. Economic reality determines everything. Like it or not!

The ACTU’s claim that ‘insecure workers’ are more likely to face unemployment is just plain wrong. No job type—permanent, casual, part-time or contract—escaped the Covid mugging.

The illogicality of the ACTU stance extends to statistics. Unions portray ‘insecure’ work as a growing ‘problem’. That is false. Recent analysis from University of Melbourne Professor Mark Wooden confirms the following.

Casual employment has remained at around 20 per cent of the workforce for 20 years. Labour hire and gig work is small, at less than 5 per cent of the workforce. Self-employment has sat at around 2.1 million people but declined slightly as a workforce percentage to around 17 per cent over the last 15 years or so.

What’s also illogical in the ACTU stance is the complaint about casual employees’ lack of access to ‘entitlements’ such as holiday pay. This is plain nonsense.

Casuals get paid 25 per cent plus more than permanents to make up for holidays and so on. Casuals receive holiday pay built into their hourly pay. Permanents get paid less upfront and get paid the money when they take holidays. In fact, casuals end up with more money than permanents because full-time ‘entitlements’ usually only add about 19 per cent to their pay. Casuals can receive up to 6 per cent more than permanents.

The Federal government’s proposed new workplace laws will allow casuals to access permanent part-time work after 12 months. They will allow part-timers to work extra hours. The ACTU continues to find problems even under these reforms.

Even the economic ‘war’ with China has taught Australia that there is no such thing as ‘permanent’. We now are fully aware that reliance on permanency of trade with China or any one big national market is massively risky. Trade security is found in having a wide range of trading partners. It’s the same with work for individuals. Having a range of work and income sources is safer than relying on one ‘permanent’ job. In reality, ‘permanency’ is insecurity.

Too often the ACTU agenda falls apart in the face of the facts. On this issue their ‘anti-insecurity’ agenda looks like a policy solution searching for a policy problem that doesn’t exist.

We need to focus on ‘solutions’ for a 24/7 economic reality in which Covid and China have both taught us that nothing is permanent. To pretend otherwise is to live with fantasies that will harm us.

Victoria Covid-19 – Blaming the self-employed and anyone else in sight

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Having lived in Melbourne all my life, I’m ‘picking up’ that this Melbourne Covid-19 deep lockdown has induced fear. Fear is in the Melbourne air.

Yes, it’s fear of the virus. But it’s also fear of continuing incompetence by the Dan Andrews government. The incompetence has led to the Stage 4 lockdown. This is not a party political comment. Labor governments in Western Australia and Queensland have so far successfully and impressively contained the spread of Covid-19.

Instead, there’s something uniquely ugly about the Dan Andrews-led government we’ve seen to date.

  • It has the stench of double standards. One rule for some people. Another rule for others. “You can’t do x. BUT it’s okay if some do!!” This has resulted in confusion about what people can and cannot do. Perhaps the Stage 4 lockdown will be consistent?
  • Gross administrative incompetence.
    • The blame for the ‘sex in quarantine hotels’ scandal lies squarely at the government’s feet. Premier Andrews refused Australian Defence Force personnel oversight. Every other state welcomed the ADF. The virus surged out of the hotels.
    • Management of Covid-19 testing, reporting and tracing is compromised. There appears to be a confused bureaucracy. Just one example from last week. A business shut down due to one staff member testing positive. Other staff were refused testing by the health department, yet the doctors wanted to test the staff. What the hell?!
  • Blame everyone but yourself. ‘It’s not me’ Premier Andrews has constantly stated in press conferences reported by media. He’s blamed the federal government for aged care problems, families for whatever (?), workers for going to work, the private sector and young people amongst many others.

We feel compelled to jump into this ‘blame others’ game when the Premier directs blame towards self-employed people. Last week Premier Andrews again blamed what he called “the structural weakness in our economy … insecure work”. This included contractors (the self-employed). We reject that. The Premier’s own report on ‘insecure work’ shows it is a positive contributor to society. Here’s our summary of the report.

This is part of the Premier’s declared war on the self-employed we reported in mid-June. The Premier has an agenda to make self-employment illegal, to wreck the lives of self-employed people. This reflects the authoritarian approach under Dan Andrews. It’s ugly and induces well-founded fear in Melbourne/Victoria.

Is there now a change in attitude? Perhaps. In press conferences over the last two days, Premier Andrews has been more inclusive. He’s thanked the PM for assistance, including ADF help. We haven’t noticed as many ‘blame others’ statements. If that marks a change in attitude, we can only welcome it.

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!