Self Employed Australia

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“Everyone needs an Advocate”

The nature of work

Should gig workers like Mick Jagger, Beyoncé and Harry Styles be worried?

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In late April, we alerted you to the new Australian Taxation Office (ATO) reporting rules for gig workers. We had some queries asking, “what are ‘gig’ workers?” That’s a pretty sensible question.

Last week I posted the answer on Substack. You can read ‘To Gig or Not to Gig’ (it’s free!)

Yes, icons of global popular culture such as Mick Jagger, Beyoncé and Harry Styles are all gig workers.

And (believe it or not) gig work is even older than Mick Jagger! Wow! I wonder if Mick’s eight children—particularly his youngest child, six-year-old Deveraux—would realise that Mick’s a gig worker? They probably wouldn’t care…

But the ATO does care about who is a gig worker. And the Albanese government, under Minister Burke, wants to kill off gig. But we assume that it wouldn’t give PM Albanese any ‘Satisfaction’ to attack Jagger, and anyway ‘You Can’t Always Get What You Want’.

But the ATO is really looking at this as a Satellite issue (apologies to Mr Styles).

What the ATO is focused on is the type of gig work that’s done through platforms. No, not the ‘stage’ platforms that Mick, Beyoncé and Harry work on, but the ‘tech’ platforms that Uber and other such companies use to organise work. The ATO calls it the sharing economy.

What the ATO wants to do is track your income if you work as a ride-share driver, rent out your flat/house/room for short-term accommodation and so on. The ‘platform’ companies will be required to report your income to the ATO starting on 1 July 2023 (i.e., soon!) The platform companies will require information from you, notably your:

  • ABN and business/trading name (where applicable);
  • first, middle and surname/family name (for individuals);
  • date of birth (for individuals);
  • residential or business address;
  • email address and telephone numbers; and
  • bank account details.

But we suspect they’d have all this information anyway. The ATO has provided a detailed explanation here.

And just to ensure the message gets through, to steal a line from Beyoncé, these new gig reporting rules also apply to Single Ladies! (But presumably won’t apply if you’re still in nappies.)

Gig workers alert – ATO tracking your income

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gig-workersThis is to alert SEA members and subscribers about new laws affecting you if you earn income through ‘gig’ platforms.  As of 1 July 2023, the platforms will be required to report your income to the Australian Taxation Office. The move is directed to identifying undeclared income and will eventually apply to GST compliance.

Legislation for the Sharing Economy Reporting Regime passed Parliament in December 2022. The ATO is having to design the implementation of the new laws quite quickly. The ATO is seeking to implement this properly and is conducting industry and ‘stakeholder’ consultations on this. We’re involved in these consultations and have raised a number of issues.

To give you some context, the new reporting rules are targeting the (approximately) 970,000 people, or 7 per cent of the workforce of 13.9 million, who earn income using gig platforms. Only 0.19 per cent of the workforce, however, report earning all their income from gig. That’s according to the comprehensive inquiry into gig work done by the Victorian government.

Consequently, the ATO’s gig income reporting regime is overwhelmingly going to affect people who use gig as top-up income. If you’re using gig for income, you’ll need to ensure that you’re reporting that income correctly.

The issues we’ve raised in the consultation so far include the following:

Data collection: The gig platforms will be required to report data other than simply financial—mainly, we’re told, for identification purposes. We asked if the type of data required could be clarified.

GST: How will GST reporting operate? Will gig platforms be required to understand gig workers’ GST threshold limits?

Gross or net income: We assume that reporting will require net income declarations. That is, income after platforms take out all platform and related expenses.

Dispute management: This is our top query.

What if a platform incorrectly reports income or reports income that does not match the ATO’s prescriptions?

Our concerns here are strongly linked to the abuse of social welfare recipients in the Robo Debt scandal. In that case the ATO provided income data to Centrelink which then used that data to allege incomes that were false. The government’s dispute-resolution process was essentially non-existent, resulting in huge abuse of welfare recipients. The same potential exists with this new reporting system—namely, if there are reporting errors, then the gig worker is hopelessly disadvantaged in having them investigated and fixed.

We have to say that the ATO was/is very receptive to our concerns and queries.

If you earn income through gig, we’re keen to hear from you if you have concerns or can identify issues. Drop a line to me (Ken Phillips – ke*******************@gm***.com)

You can read more from Ken Phillips on his Substack Self-Employed Aren’t Stupid site, including ‘A tale of 2 Croissants.’

Reporting from Marxism Conference 2023

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Marxism-conferenceWe’ve reported that the Albanese government has committed itself to upending our right as self-employed people to be self-employed. Its stated agenda is to create a third definition of self-employment called ‘employee-like.’ This will throw into confusion, perhaps even remove, key protections we have long campaigned to achieve—for example, protection from unfair contracts.

The government plans to move with legislation later in the year. We intend to mount a strong campaign against this and are preparing for the battle ahead. The government comes at its agenda from the perspective that there is an inherent conflict between ‘workers and bosses’. This is the old Left-wing perspective of the social and economic order.

The challenge posed by self-employed people to this perspective is that we are both worker and boss at the same time. So, do we exploit ourselves? Are we inherently in conflict with ourselves? Um … confusing!!

Over Easter, Australian Marxists held their Marxism Conference 2023 in Melbourne. Self-Employed Australia’s Executive Director Ken Phillips attended the full three days. His aim was to seek to understand what the Marxists’ arguments are and the world view that underpins them. If we are to effectively defend the right to be self-employed, we need to understand what the ‘other side’ are saying and thinking—even at the furthest end of the spectrum.

The Albanese government is broadly of a Left-wing persuasion. Prime Minister Albanese is from the socialist left of the Labor Party. We’re not offering a view on that, but rather seek to understand a range of political views. All political views fit somewhere along a spectrum of some sort. We don’t know where the PM sits on the Left-wing spectrum. We doubt that he is a hard-line Marxist as presented at the Easter Marxism Conference.

What we have done, however, is to put together some day-to-day reports on what we think it is that Australian Marxists believe. Here are the three reports we put together over Easter:

Reporting from the Marxist Front Line – Overview and agenda

  • Listing the agenda items.

Reporting from the Marxist Front Line – Day One

  • Capitalism is the enemy.
  • We are defined by our class.

Singing “the  Internationale”

  • On War and Identity Politics

We have genuinely attempted to present reports of what was said and what was argued. We’re not commentating on those claims. Rather, we’re simply trying to gain a broader understanding of the mind of the Marxist Left.

‘A Tale of 2 Croissants’ and Being a Little Bit Pregnant(?)

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substackI let you know a little while ago that I’ve started posting as a Substack writer. Substack is for obsessive writers (like me). I’ve called my Substack SELF-EMPLOYED AREN’T STUPID!

Substack gives me a platform to write about self-employed issues, ideas, concepts and thoughts that complement what we do at Self-Employed Australia.

So here are some thoughts that might interest you from SELF-EMPLOYED AREN’T STUPID!

A tale of 2 croissants

croissantsI explain that:

“In my home city of Melbourne there’s a near-inner-city suburb that’s rapidly changed from working-class to ‘woke-well-to-do’ class. At the outer edge of the suburb there’s one street that seems to divide the two classes. On the working-class side of the street is a popular bakery run by a Vietnamese family. Not quite half a kilometre away (in the woke-well-to-do section), is another bakery.

The Vietnamese bakery sells croissants for $4.00.

The woke-well-to-do bakery sells croissants for $6.50.”

Read more   

A serious look at being a ‘little bit pregnant’

surpriseThis article looks at the labour academic argument that self-employed people can be a ‘little bit an employee’.  I explain that:

For a long time, Australian unions, labour academics and their political fellow travellers have sought to cut away at the right of people to earn their income through the commercial contract. The Albanese government has committed to doing this later in 2023.

And explain the history and thinking around this idea.

Read more

Independence and the Death of Employment

bookYou may not be aware that I published a book on this in 2008. I’ve decided to make this available through Substack in serialised, chapter format. I’ll progressively release chapters. In this first release I provide the book’s Introduction. In it I quote Roman Emperor Caligula who stated:

“Bear in mind that I can treat anyone exactly as I please”.  That’s real power.

The modern employment contract is a contract of control and power, of one party over another. Few realise this. And much of my (obsessive) journey is to argue against such power and control.

As you are a subscriber to, or member of, Self-Employed Australia, you’ve become part of, or maybe are committed to, the campaign to defend self-employment—that is, escaping the control and power over you that comes with ‘employment’.

I invite you to subscribe to my Substack SELF-EMPLOYED AREN’T STUPID! blog and join me on the further development of this journey.

They say there’s “trouble Down Under?”

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trouble-down-underThe speed with which Australia’s fundamental operational structures are being changed is quite breathtaking.

At the beginning of February, the Federal Treasurer, Jim Chalmers, released a ‘thought’ article where he announced “…the beginnings of a new economic model” by creating “…a new values-based capitalism for Australia”.  This embodies a surprisingly radical intent, even given the tradition of the labour movement’s ambitions over the last 50 years.

On my thesis, ‘The New Australian Socialist Experiment’  (also released in February), I saw Chalmers’ declaration as part that emerging experiment. What I hadn’t expected was the rapid rate at which this new agenda unfolded, became apparent and ignited a vigorous debate.

Gary Banks was the head of the Productivity Commission from 1998 to 2013. The Productivity Commission is the major government-funded ‘think tank’ that looks at, and reports on, how to make Australia efficient and productive. Normally any criticism by such government bodies directed at government (even by retired heads) is cautious, using toned-down bureaucratic language.  But this week Gary Banks came out swinging.

In a damning assessment of the current policy direction Banks referred to “…policies that have damaged our economy’s ability to cope with change, to be competitive and support economic growth.” He refers to “monumental bungling”, policies that are “…contrived to maximise the cost…” and “…we [Australia] have been busily eliminating our competitive advantage…”

Gary Banks’ criticism is directed at all governments, not just the current federal government. What is significant is not simply his criticism of specific policies, but the unexpected tone of his criticism. He is flagging an Australian structural, self-created, economic downslide.

Banks’ blunt warning comes just as many retirees are reeling in shock at unexpected significant changes to superannuation tax rates. While the proposed tax regime only appears to affect ‘rich’ people, those changes also signal that using superannuation for retirement is now much more risky. Is this the beginning of the end for superannuation?

To us (SEA), it’s not just what’s already happened that’s caught our attention, but what seems to be pending. There are tea leaves to be read!

  • There is broad media reporting of a rental crisis. But emerging policy seems to be pushing housing rental supply in a negative direction. One much-touted ‘solution’ is the imposition of rental price controls and rent freezes.
  • Influential, wealthy unions are supporting and calling for price controls—not only on energy but, seemingly, more broadly as well.
  • State workers’ compensation schemes are in financial crisis, unable to fund their obligations.

Our experience is that when this sort of media coverage starts happening it’s usually followed by new regulations to ‘solve’ such problems.

And we know that the policy knives are out to harm self-employed people. We reported in February on just one agenda item designed to kill off independent truck drivers.

Over the next few weeks we’ll try and put together analysis of these issues and more. Things are certainly moving at a rapid rate!

ATO Small Business Debt: Patience Needed

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patienceThe Australian Taxation Office views small business tax debt as a major problem. The ATO says that small business debt is two-thirds of the $37 billion owed to the ATO—in other words, $24 billion.

Fortunately, the ATO does recognise that much of existing small business debt is the direct result of huge losses small business people suffered due to Covid lockdowns and restrictions. The ATO is showing some understanding. But we hope that the understanding is sufficient and that it will ‘stay the course’. Here’s one story that demonstrates the ‘Covid business disaster’ experienced by (at least) tens of thousands of self-employed people.

I had a chat the other day with a single mum who’s been running her own small business for about six years. She rents a commercial space that’s critical for her particular business. Things were going reasonably well and in 2019 she needed to move from one premises to another. She spent quite a bit of money upgrading the new premises, moved in and business was looking up. Then Covid hit in early 2020.

During the entire Covid lockdowns of 2020–21 the rules meant that she was prohibited from operating at all. Income dropped to zero. Yes, zero! She’d signed a five-year lease and had a bank mortgage. In early 2022 she could start operating again. But the loyal customers she had built up had drifted away. She’s had to rebuild, and although things are looking better, they are not yet back to pre-Covid (2019) levels.

She owes money to the ATO related to her pre-Covid trading. The ATO (fortunately) has her on a payment plan. She’s been very upfront with the ATO. But she’s still needing to cover her mortgage payments plus pay the rent on her premises. If she loses the premises, she’s out of business.

She talked to me about the struggle. I really don’t know if she can survive. She’s a self-motivated, positive, ‘go getter’. But my words of encouragement and support are just words and don’t cover the bills. She’s the sort of person who is most likely to battle through and, give her several years, get on top of the mess and start to make a profit again.

This lady is just one typical story. The economic pain of Covid has impacted the most vulnerable in our community—the ‘go getter’ small business individuals.

We hope that the ATO maintains its small business patience and support. But this needs to happen on a case-by-case basis, with high quality ATO communication and realistic assessments of individuals’ circumstances. It will be a long haul over several years. This is the economic ‘long Covid’.

Victorian Labor promises to destroy gig work and self-employment

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destroy-gig-workIn late October this year the Victorian Labor Government announced new gig laws it intends to introduce. The promised laws have all the nice-sounding language of ‘rights’ for gig self-employed people, but in fact the laws amount to a stripping of rights.

We’ve seen this sort of cunning stuff before. In California, in 2020, new laws came into effect that outlawed the use of self-employed people. That is, the structure of the laws didn’t ban people being their own boss. But by making it illegal to use self-employed people, California destroyed the incomes of people who worked as their own boss.

The promised Victorian Labor laws would perform a similar underhand trick. Effectively the laws would impose huge union control and centralised regulation over gig platforms, thereby destroying their business models. The platforms would become unprofitable and be forced to leave Victoria.

This is why Deliveroo recently closed in Australia. They’d done deals with unions that made their business unviable. Close down was the answer!

And who suffers? Yep, you got it. It’s the thousands of self-employed people—try students, retirees and the rest—who use gig platforms to top up their income. Only 0.19 percent of gig workers use gig for their full-time work. Everyone else uses gig for income top-up.

The promised Victorian Labor law is a business destroyer. It’s a policy that says that Labor despises people who work as their own boss, working when they want to work. It’s a policy of hate toward small business people.

We saw this before in Victoria when, around 2017, the Victorian Labor Government forced the breaking of the contracts of hundreds of self-employed cleaners who had direct contracts to clean schools. Labor forced these ‘own boss’ cleaners out of business and handed the contracts to big business. Cleaners were forced to become union members or have no work.

The promised Victorian Labor gig destruction laws would:

  • Force gig platforms into industrial-style ‘negotiations’ over how they manage their business and what the terms of their contracts are. This process would give unions power over gig platforms and gig workers.
  • Force gig platforms to change their contracts.
  • Destroy the entire concept and practice of ‘offer and acceptance of contract’ which is the core fundamental of commercial activity.
  • Impose pay rates.

And more.

In effect, self-employed gig people would retain their theoretical ‘right’ to be self-employed. But gig work and income would simply disappear. This is a Labor policy that attacks the ability of low-income people to find income through being their own boss. It’s pretty disgusting!

This commentary should in no way be construed or taken as an endorsement (or otherwise) of any political candidate or party or as a suggestion as to how anyone should vote or not vote at the 26 November Victorian state election. 

Government report: Don’t destroy self-employed gig workers. We agree

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report-gigDespite the Albanese government’s description of self-employed ‘gig’ work as a ‘cancer’, a recent government report (interim) says that such work and workers should not be ‘stymied’. We totally agree and have made a supporting submission.

The Productivity Commission is a high-powered federal government economic research think-tank. What it says is important.

In its (interim) report it studies and makes recommendations on the gig/platform economy. It says:

Regulation should evolve to meet the workplace relations challenge of innovative new business models, without stymying their potential contributions to productivity.

This is a heap of common sense. We hope the Albanese government takes note. Don’t throw the baby out with the bathwater!!

Our submission makes key points of fact.

There’s no confusion between an employee and a self-employed person:

  • An employee earns income through the employment contract.
  • A self-employed (independent contractor) person earns income through the commercial contract.

This legal fact is supported by research conducted by the International Labour Organisation and by international standards to which Australia is a signatory. Like the Productivity Commission, the ILO says:

National policy for protection of workers in an employment relationship should not interfere with true civil and commercial relationships…

We say that employment-structured firms are under competitive threat from gig/platforms and self-employed people. These firms are marshalling their well-entrenched political power to stop or limit the competition for power. This explains the ‘third way’ push which is on the Albanese government’s agenda.

The ‘third way’ push is highly dangerous. It has been rejected by the ILO and is causing great harm in the UK, for example. We explain this in our submission.

We also say that self-employed people are entitled to ‘protections’ but through commercial regulation not employment regulation. For example, protections are already available under laws covering unfair contracts, work safety, collective bargaining (under competition rules), minimum rates guarantees and dispute resolution.

But there is urgent need to reform the workers’ compensation schemes, for example, to allow individual self-employed people to register directly with the schemes without being forced into ‘employment’. Currently, self-employed people are banned from workers’ compensation, a glaring discrimination.

We explain these issues and more in our submission.

To gig or not to gig. Is that the question?

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pub-gigIf you’ve ever been to a pub gig, you’ll have taken part in what the Albanese government wants to (effectively) close down. The Albanese agenda is starkly clear after Workplace Relations Minister Tony Burke declared the ‘gig economy’ is a ‘cancer’.

Here’s a simple example of why we strongly oppose the Albanese/Burke agenda.

The gig economy is not something new. The Stones, Cold Chisel, AC/DC all did and/or do ‘gigs’. Gig is the contractual lifeblood of the entertainment industry locally and globally.

A gig is pretty simple. There’s a contract for a set price to do something. “Come to my pub. Play for three hours and I’ll pay you a thousand bucks”, says the pub manager. “Done”, says the singer. The singing done and the money paid. End of contract.

Somehow, for the Albanese government this is a ‘cancer’.

However, this familiar entertainment industry ‘gig’ model has taken new forms. Now gig work is available for ride-share, food delivery, aged and disability care, and odd jobs. The list goes on. And, yes, the entertainment industry has gig platforms. Gigsmash is but one.

What’s happened is that online technology has made gig work secure. Gig platforms enable anyone wanting to do a job to connect with someone needing a job done. The revolution is that job specifics and price are upfront and agreed by the parties. The gig platforms also make the payments and enable both the ‘doer’ and the ‘receiver’ of the service to rate each other.

It’s fantastic. The risk of not being paid is massively reduced. Think of how many times a pub manager has failed to pay the full amount agreed, screwing over the worker (singer)? It’s the security of payment and security and clarity of the gig work agreement that’s made this expansion of gig work so seemingly popular. And it’s all happened without government sticking its nose in!

But Minister Burke has promised to create laws that will require gig workers to have holiday pay as one eample.

So the pub manager will have to pay holiday pay on top of the $1,000 agreed. How is this to be calculated? Holiday pay is for full-time employees who’ve worked a full year. How is this to be calculated for 3 hours work and no more? Ouch! That has heads scratching! But let’s say it’s $10. It’s clear what will happen. The pub manager will only agree to $990 for the gig. $10 will have to be held back.

But when does the gig singer get the $10? Does the singer determine when it’s ‘holiday’ time or does the pub manager decide? Sounds like a recipe for scamming! So will Albanese/Burke then set up a massive new government-run department to manage gig workers’ holiday pay? Will the singer need to apply to the government for the $10?

But there’s more. Around 830,000 Australians do gig platform work in any year. But only 22,000 use gig for their full-time work. In other words, around 810,000 Australians (about 7 per cent of the workforce) only use gig work as part-time top-up work. How is gig holiday pay to be calculated for all these part-timers?

Whatever Albanese/Burke do, it’s destined to be a mess. The proposal/promise is illogical. It doesn’t fit the reality of how people work. It’s dumb. Its dangerous. It will do much harm.

We will keep arguing against this.

In London on joint international self-employed defence campaign

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London-QueenI’ve been in London over the last week-and-a-bit. We (SEA) have a long association with several UK self-employed associations and have been working with them on common issues to defend self-employed people. Hence the London presence.

The two big issues are:

  • The UK tax authority’s (HMRC’s) unfair treatment of self-employed people. (Sound familiar to the ATO??)
  • Identifying whether an individual is an employee or self-employed and what ‘rights’ each has.

Reforming tax administration

After many months of planning we were lined up for meetings/presentations with UK MPs in Westminster. These meetings were to discuss how HMRC could be reformed along the lines that we’re campaigning on for reform of the ATO. That is, using the USA laws covering the IRS as a template. However, the passing of the Queen and her funeral have meant that all these meetings were cancelled. Once the Royal transition is complete and the UK Parliament starts operating again, we’ll be working with our partners to re-initiate the campaign.

Our aim is to see if we can get a common movement in UK and Australia for reform of the HMRC and ATO. The treatment of self-employed people by both administrations is terrible, and their intimidatory behaviours share similar features. With a joint campaign effort we may increase our chances of achieving fairness for self-employed people.

Self-employed status and ‘rights’

We did, however, go ahead with a planned workshop session on self-employed status and ‘rights’. Included in this workshop were like-minded friends from the USA. This issue is ‘hot’ in the UK and USA (think California outlawing self-employment). Even though the media were present, we’ve recorded the workshop and presentation and will also release this once the Royal transition is complete. This issue has great importance for the UK, the USA and Australia. In Australia the Albanese government is committed to ‘smashing’ the self-employed. And the Albanese government, we predict, is likely to replicate very confusing UK ‘little bit pregnant’ laws to achieve its aims.

We’ll have a lot more to say about this and to explain the issues over the coming weeks/months. But at this stage we’re putting together a UK/USA/Oz ‘team’ to focus on the common themes to defend the right of people to be self-employed. We’ve gotta be organised!

More soon.