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Search Results for: Morrison unfair contract laws

Morrison’s dead flat small business pitch

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election-2022-pitchLast week Morrison made his pitch for the small business vote. It fell dead flat. That’s strange really.

It’s almost an Australian political truism that political parties cannot win government in Australia without a sizable chunk of the small business vote. So, for Morrison, who’s supposed to be ‘Scotty from marketing,’ his seeming blindness to this alleged truism is odd.

Morrison’s pitch was that by lowering overhead costs and energy bills he’d create a vast number of new small businesses. This pitch is not specific and applies generally to any business (or family) in the economy. There’s no ‘joining of the dots’ between the pitch and the lives of the self-employed, small and family businesses.

Again, it’s strange that Morrison has totally missed his small business target. The Coalition in fact has a substantial history of not only spouting the small business mantra, but of having substance to support the mantra as well. Take some examples.

John Howard created the Independent Contractors Act to protect the status of the self-employed. Tony Abbott committed to the introduction of a Federal Small and Family Business Ombudsman and put the wheels in motion for unfair contract laws for small business.  The Abbott-era commitments were finalised and delivered under the Turnbull coalition government.

Self-employed, small business people profile strongly on the measure of informed and swinging voters. They are extensive seekers of information. This again is why Morrison’s dead flat small business pitch seems so strange at this election.

At the 2019 election Morrison promised to introduce security of payment laws for small business. He’s done this. And it’s good. It’s strange that he’s not pitching it.

He also promised to ‘beef up’ unfair contract protections for small business people. The Bill was ready to go. But strangely this major pro-small business Bill was deserted immediately before the election was called. Did the ‘big end of town’ get to Morrison to pull the Bill?

Then there is the elephant in the room. The Australian Taxation Office has been crucifying small business. The ATO has destroyed small businesses in the research and development space—claiming dodgy use of grants—but the ATO subsequently admitted that it was wrong.

The ATO has been attacking small and family business trusts, forcing trust beneficiaries to pay tax when (even the ATO admits) the beneficiaries have not received any income. The ATO has also sought to change trust distribution rules retrospectively, thereby creating tax debts in the past where, under then-existing ATO rules, no tax debt existed.

In the 2021 Budget the Morrison government declared in Parliament that “We are backing small business in over the ATO. No longer will the ATO be able to garnishee and takeaway (alleged tax debt) while the dispute is in train”. But this promise turned out to be false. The implemented policy only enables small business people to ‘apply’ to have a disputed debt ‘paused’ until appeals have been heard.

Morrison’s pitch to create large numbers of small businesses falls dead flat if those new (and existing) small businesses find themselves under unfair attack from the ATO without the protections afforded by a rule of law regime.

To win and retain the small business vote the Coalition has historically made a policy of substance that it then delivers when in government.  This time Morrison is not selling what he’s done and not promising anything new for small business.

It’s almost as if Morrison has abandoned the small business vote. How odd!

Confronting bullies in our own (Australian) backyard – Unfair Contracts

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bullyIn a world full of bullies, the ‘little’ person must have the power to stand up against aggressors. If bullies rule, our democracies, the rule of law, justice and fairness are simply empty, meaningless terms thrown around like useless confetti.

In Australia we are lucky to have a government and a parliament that are finally moving hard to stop big business bullies in their dealings with consumers and small business people.

There is a Bill before Parliament at the moment, ready to be passed, that gives real teeth to unfair contract laws. What might seem like technical change to obscure law known only to a few people is, in fact, a huge step for fairness in how the Australian economy works. Everyone is affected, even if few understand how.

Simply put, when this Bill becomes law:

  • It will be illegal for big business to have unfair contract terms in their standard form contracts with consumers and small business people.
  • Fines will apply to anyone who tries to push an unfair contract on to consumers/small business. (Up to $500,000 for individuals and $10,000,000 for corporations.)

The implications of this are massive. Businesses that want to screw over consumers and/or small businesses with unfair contracts will be forced to dump those contracts. (Think phone, internet, car and other equipment leasing, land sales and on and on.) This is a huge economic reform that will make for a fairer and stronger Australian economy. More people will be able to do business and buy things with real protections against unfair contracts.

For us, this journey started in 2009. At Self-Employed Australia we believe we played a pivotal role in making this happen—along with many others that we need to thank. The sequence of events was as follows:

A full timeline and details of the events is here.

There are many people to thank, reflecting the very best of the Australian parliamentary process and the public service:

  • The Abbot government committed to the laws for small business.
  • The ALP, Greens and Senate independents ensured that the laws had reasonable meaning.
  • SEA played a pivotal advocacy role to this point (2016) against opposition and dirty play by ‘big end of town’ types.
  • Rod Sims and the ACCC were champions in highlighting the weaknesses in enforcement and pushing for ‘beefing up’.
  • The Morrison government has worked through to ensure that the ‘beefed up’ laws are now before parliament.
  • The ALP, Greens and independents all seem clearly supportive of the new laws.

For the ‘big end of town’ lawyers who say that these laws break contract integrity, we reply as follows: The Unfair Contract laws embed or codify the ‘structural’ principles of commercial contract in statute. They ensure that standard form contracts have a measure of power balance such that they engender contract trust—that is, the contracts have integrity.

We do, however, have one major concern. Australian governments, state and federal, routinely break the unfair contract laws. They reckon they are exempt. And most often they are. We need all Australian governments to amend laws to hold government agencies accountable to the same contract laws they expect of the rest of the community.

There’s more work to be done.

Unfair Contracts BIG Beef UP. Fantastic! Bank of Queensland slapped down

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dragon-slayerWith all the focus on Covid, it’s good to see that major reform efforts are still underway. Last week the Morrison Government released the Bill to ‘beef up’ the unfair contract laws. It’s a ripper. It’s a game changer.

In 2015 the Coalition government passed unfair contract laws for small business people. As Self-Employed Australia was the primary, often the only, advocate for the laws (we campaigned for seven years) the laws achieved about 70 per cent of what we wanted. This new law will make the laws really strong.

The new Unfair Contract Bill

The Exposure Draft Bill has been negotiated with and supported by the states. It applies both to consumers and small business people.

The Bill Expands the definition of small business to businesses of up to 100 employees. Currently it’s only 20 employees. The Bill applies no limit on the value of the contract. Currently it’s only contracts to $300K. Plus the Bill clarifies what is a ‘standard form’ contract to one where the contract has been used before.

The Bill also expands the scope of Court Orders. If a clause is declared unfair in one contract, it will be unfair in all contracts. Fines can be imposed for using unfair clauses. A person can be banned from ‘managing a corporation’ for using unfair clauses.

The Bill gives real teeth to the laws. Big businesses and their managers will be in major trouble if they try to use unfair contract clause under this proposed legislation. It truly will make for a greater power balance between big businesses and consumers/small businesses.

Bank of Queensland slapped down

Take this example: The Bank of Queensland (BOQ) has known about unfair contract laws for six years. They were dumb if they didn’t! Yet they ignored the laws. The Federal Court has now slapped down BOQ. They had clauses in small business contracts that (1) let them change contracts at their whim, (2) allowed BOQ to declare a default anytime, (3) allowed BOQ to charge customers for BOQ negligence and (4) forced the customer to disprove a debt if BOQ declared a debt. These are all bastard clauses that have now been removed by court order.

But under the new Bill, BOQ and their managers would be in real trouble for having these unfair clauses. Their executives, lawyers and managers could face been banned from being a manager in banking or any corporation. Are you listening big business managers? Now it’s serious.

The Bill is subject to further consultation. We’ll be putting in a submission of STRONG support. Here’s our summary of the Bill.

Big Beef up to Unfair Contract laws

A HUGE step forward for small business

31 August 2021

Background

dragon-slayerIn 2015 the Coalition government passed unfair contract laws for small business people. As Self-Employed Australia was the primary (often the only) advocate for the laws (we campaigned for seven years) the laws achieved about 70 per cent of what we wanted. That was also thanks to Labor, the Greens and independents in the Senate forcing good amendments to the original Bill.

Six years later we have a new Bill ‘beefing up’ the laws. And it’s a ripper.

The new Bill comes after the Australian Consumer and Competition Commission had a frustrating five years trying to get big business to comply with the laws. The big business lawyers used every technical trick in the book to avoid complying with the law. Watch out, high-paid lawyers: that’s not going to be the case once this new law passes.

The Morrison government has negotiated this new Bill with the states and is moving forward with agreement with the states. The Bill is in the Draft Exposure stage and subject to further consultation. We will be making a submission supporting the Bill BIG TIME!

Summary of the Exposure Draft Bill

The Bill

  • Applies to consumers and small businesses.
  • Expands the definition of small business. To apply to businesses of up to 100 full- or part-time employees (excludes casuals) or less than $10m in turnover. Currently only 20 employees.
  • No limit on the value of the contract (currently restricted to contracts up to $300k).
  • A ‘standard form’ contract is one if the contract has been used before.
  • If minor changes have been made to a contract in negotiations this does not stop the contract being ‘standard form’.
  • Imposes fines for breaches (up to $500k for individuals). There are currently no fines.
  • A person breaches the law if they propose to or seek to apply an unfair clause.
  • Multiple unfair clauses create multiple breaches.

Court orders: (This will close lots of loopholes in the current laws)

  • If a clause has been declared unfair by a court, all similar clauses in other contracts are taken to be unfair. A party must disprove the unfairness if they want to use the clause.
  • An order can be made to stop loss or damage from an unfair clause. Loss does not have to be proven but only that loss may Such an order can apply to a ‘class of persons’ to stop loss.
  • An order can be made to stop someone from engaging in contracts with unfair clause/s. A public warning can be issued about such a person.
  • Persons can be disqualified from ‘managing a corporation’ due to the use of unfair clauses.

Orders can be made within six years of a clause being declared to be unfair.

The Bill/Act is enforced (proposed and currently) by the

  • ACCC, covering contracts for goods, services and sale of land.
  • ASIC, covering financial products and services, and insurance contracts. (This started in April 2021)

Excluded clauses: Any clause required by legislation is not ‘unfair’.

Starts: 6 months after Royal Assent.

From the Explanatory Memorandum:

The rebuttable presumption therefore acts as a disincentive for companies to reuse terms they know are likely to be considered unfair.

The rebuttable presumption is intended to encourage contract‑issuing parties to maintain thorough monitoring and record keeping of their contracts to ensure that unfair terms are removed from or not included in standard form contracts.

Like naughty schoolchildren, banks now complying with unfair contract laws

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Thursday, June 01, 2017

Readers might recall our news alert headline, “we’ll only do what we’re made to do!” This was a senior counsel from one of the banks responding to our efforts about eight years ago asking them to support the unfair contract laws.

Then in March this year we said that NAB was trashing its own small business brand because it had, in our view, lied about changing its small business contracts to comply with the now operational unfair contract laws.

The huge news, however, is that last week the big four banks changed their small business overdraft contracts to comply with the laws. Robert Gottliebsen reports that the banks have:

  • Removed terms that absolve the bank from responsibility for their conduct.
  • Removed terms that gave banks total power to call a default when the value of secured property falls.
  • Removed terms that gave banks the power to call a default for an unspecified negative change in the circumstances of the small business customer.
  • Significantly limited terms that protect banks against losses outside the control of the small business borrower.
  • Significantly limited terms which gave the bank the ability to change the contract at will and without permission of the small enterprise.

But did the banks do this because they wanted to comply with the law? Well, the fact is that the head regulator, ASIC, forced them to comply. Robert Gottliebsen also recognizes the important role of Small Business Ombudsman, Kate Carnell and us, Independent Contractors Australia in achieving the outcome.

But now, according to the AFR, the banks are complaining that Federal Treasurer Scott Morrison is being too aggressive toward them. Um! As Morrison has said of the banks, ‘cry me a river!’ The banks have been like bullies in the schoolyard throwing sand at the little kids. The school principal has made them behave. So the banks have gone to their mommas on the school parents’ committee complaining that their little (bully) boys are being picked on! Spare us all!

The banks need to grow up! It’s their behaviour that is damaging themselves. But we also agree that there’s danger of political overreaction. The banks need to focus on a well functioning market economy and not their obsession with securing rorted advantage for themselves. If the banks do this, we might achieve important economic reforms!

Postscript: In November last year we said on ABC TV, The Business, “this is not something they (big business) can ignore!”

Robodebt: How corrupt government works

(Note: Page-numbered hyperlinks below are to direct extracts from the relevant pages of the Royal Commission Report. A marked-up version of the full Report of the Commission is available here.)

Robodebt was and is a huge a scandal that was eventually investigated by a Royal Commission. This article explains that scandal and the bigger lessons to be drawn from it.

What the Royal Commission into Robodebt exposes and should therefore be the focus of our attention is the extent to which public administration of government in Australia has descended into a morass of governance corruption. Robodebt is surely a window into a bigger problem.

Can Australia’s political system fix the problem? Depressingly, probably not!

The Royal Commission into the Robodebt Scheme Report  is over 1,000 pages long. It is forensic. It describes and analyses the policies and behaviours that led to the government’s social welfare administrators alleging and seeking recovery of debts against tens of thousands of social welfare recipients where no debts actually existed.

The Commission Report details systemic and deliberate lying, deceit, fraud and cover-up (Page 34) layered over the top of incompetence, bad management, maladministration and ignoring the law (Page 32) at the most senior levels of the public service and politics.

The Report states, “Robodebt was a crude and cruel mechanism, neither fair nor legal … a costly failure of public administration, in both human and economic terms.” (Page 35)

The Report describes how, even at its conceptual stage, at least one key Cabinet committee was lied to. (Page 128)

The situation is not something confined to one side of Australian politics. It extends across the board. Think of Victoria with the refusal to prosecute over the Lawyer X scandal plus its refusal even to investigate for breaches of the work safety laws over the Covid quarantine mess to name just two instances. Think also of the assumption of guilt applied in the Brittany Higgins case. And the same approach drove the illegal live cattle export ban in 2011. There’s a pattern here.

What we are seeing are mindsets and government behaviours that become fixated on a perceived issue or ‘problem’ that has political currency. This proceeds to a determination to ‘do’ or ‘not do’ something, depending on a political risk/benefit analysis.

This is pursued with a bloody mindedness which contorts and/or ignores truth and facts, despoils principles and practices of contract and justice, that then becomes enmeshed in cover-up, lies and criminal activity by government entities. This is the story of Robodebt.

How has Australia descended to this? Simple, on one level, is the answer. We have allowed government to not be held accountable to the same levels of transparency, honesty and accountability that are expected of the rest of the community by government itself.

The Royal Commission Report details how the government of the day decided that there must by wide-ranging social security fraud. It claimed the fraud to be in the order of well over $1 billion per year, but there were no facts to back that claim. Nonetheless, it was pushed as a political priority and the public service was charged with delivering the policy.

The days when the Australian public service was supposed to give ‘frank and fearless advice’ to government seem to have been dumped. Instead, the public service, in this instance at least, bunkered down to deliver on the outcome demanded. The Report refers to “The failure to confront fundamental flaws … being a product of the culture within DHS at the time.” (Page 164)

The orchestrated ‘scam’ that the government imposed on 866,857 Australians was pretty simple in its design as was its inbuilt flaw. This should have been glaringly obvious at even the conceptual phase, both to the top bureaucrats and the Ministers responsible.

The scheme involved the Australian Taxation Office (ATO) providing the Department of Human Services (DHS) with income records of welfare recipients over short periods of time, usually a fortnight. DHS then assumed that the income for the short period applied over longer periods, say a year. This was referred to as ‘averaging’. (Page 30) But no such assumption could be made. The Report states “That was an extraordinary assumption”. (Page 32)

Welfare recipients, in particular, can and do have widely varying income flows. They may pick up income one week but have no income the next week. They have limited income consistency. This is well known to DHS. The very assumption driving Robodebt was clearly stupid.

But DHS forged ahead.

Based on this false assumption, DHS then alleged that welfare recipients had more income than they had declared, and that overpayment of welfare had occurred as a result on a massive scale. (Page 30)

Income data-matching had been used previously, but only as a trigger to seek more information from welfare recipients and employers about the truth of incomes. This checking was stopped. In fact Centrelink officers were prohibited from contacting welfare recipients to enquire about the true state of incomes. (Page 30)

Instead, welfare recipients were required to respond to the income and debt allegations entirely online. If a person did not respond online, it was further assumed that the alleged income was fact and a debt was raised. There were NO manual checks by Centrelink. And it is widely understood that large numbers of welfare recipients have haphazard access to the Internet and/or poor online skills. MyGov and other government portals can be confusing to negotiate even for people not on welfare.

Further, when DHS alleged an income and raised a subsequent debt, the onus of proof about income shifted to the welfare recipient. (Page 30) That is, the welfare recipient had to obtain knowledge of what and from where their alleged income had come, information that DHS did not necessarily supply and then disprove the alleged income. And they had to do this entirely online, a huge task for anyone. In addition, proof of income going back up to five years could be required, even though such long-term proof of income was not part of previous welfare requirements. (Page 32)

When the welfare recipient could not disprove the income allegation, a 10 per cent penalty was automatically applied against them. (Page 30) DHS then proceeded to undertake recovery action for the assumed/alleged debt. (Page 376) This included garnisheeing. This is a process where government can issue an order to forcibly withdraw money from someone’s bank account, their pay, future welfare payments, even the settlement on the sale of a house.

DHS also outsourced debt recovery to private-sector debt recovery firms who aggressively chased welfare recipients and were paid a percentage of the money they raised. (Page 30)

The Robodebt scheme was initiated in mid-2015. By early 2017 it was in trouble where “…the chorus of criticism was deafening.” (Page 195) But the Department and the Minister/s dug in and continued. The extent of ‘digging in’ was demonstrated when “…a ‘long-time Centrelink worker who was working in income reviews and eligibility assessments’ had spoken to a journalist about problems with the income compliance system.” (Page 209) The response of the Department and the Minister was to discredit the whistleblower.

The whistleblower’s assessment of Robodebt’s problems was accurate, citing:

“(a) doubling up of income due to errors in the correct identification of employers or income types, (b) the inclusion of non-assessable income which should be excluded from the assessment, (c) incorrect calculation of the amount of payments made to recipients, (d) the application of a recovery fee in circumstances where it should not be applied, and (e) directions to compliance officers which had the effect of inhibiting their ability to correct errors.” (Page 201)

Even the occurrence of several suicides directly attributable to Robodebt, “… did not galvanise either DHS or DSS into a substantive or systemic review of the problem of illegal, inaccurate or unfair debt-raising.” (Page 221)

Instead, the DHS ramped up its efforts to protect Robodebt to the extent that it engaged in deliberate deception.

In relation to the Ombudsman’s investigations of 2017, the Royal Commission Report states “DSS attempted to and did conceal critical information from the Ombudsman and represented that the Scheme was lawful.” (Page 260) and “The DSS explanation was dishonest.” (Page 259) The Report refers to “… concerning behaviour by certain DHS staff, who demonstrated an alarming readiness to mislead the Ombudsman and conceal information…” (Page 264). It refers to the Minister who “knew that the Scheme was issuing inaccurate debt notices.” (Page 265)

Deceiving the Ombudsman was just one of several deceptive activities undertaken by the Department, including towards the Office of Legal Services Coordination, the Office of the Australian Information Commissioner and the Administrative Appeals Tribunal. In simple layperson’s terms, this can only be described as fraud conducted by the Australian government on a major scale.

Each of the Royal Commission’s conclusions is backed by detailed and forensic analysis of events and the behaviour of the people involved.

Come late 2020, Robodebt had finally fallen over. The government closed the scheme down. “This involved reimbursement of $746 million to some 381,000 affected individuals and writing off debts amounting in total to $1.751 billion” (Page 35) as well as the settling of a class action.

The Robodebt scheme should not be seen as a one-off gross abuse of power by an Australian government. In fact, abuse could almost be viewed as ‘normal’.  Accountability laws do not apply to government in the same way they do to the rest of the community. This sets the circumstances for abuse of Australians by government.

Take one example. In 2016 Unfair Contract law became available to protect small business people. These have been ‘beefed up’ with these stronger laws to take effect in November this year. Yet government departments are not subject to the laws. That is, government can engage in unfair contracts whereas the private sector cannot.

Take another situation. In 2015 the Australian Federal Police smashed a family day care fraud syndicate. That’s a good thing. The Education Department that devised and administered the family day care scheme had poor systems that enabled the fraud. But in ‘cleaning up’ the system there is suspicion that that the Department over-reacted in a mini-Robodebt style, making accusations and allegations against individuals that were suspect at minimum. Because the numbers of people adversely affected were small, no external investigation of the Department occurred. The Department ‘investigated’ itself.

Then there is the Australian Taxation Office. The ATO’s powers make it a law unto itself. The ATO’s accountability obligations are essentially public relations ‘spin’ rather than legal requirements.

In 2018 the ABC Four Corners program aired Mongrel Bunch of Bastards. This exposed gross and systemic abuse of small business people by the Australian Taxation Office utilising Robodebt-style methods and systems. The difference between the ATO and DHS is that the tax administration laws are written to make lawful ATO Robodebt-style behaviour.

Look at these examples. The ATO can lawfully raise an allegation of a tax debt such that that ‘allegation’ is at law a fact. The taxpayer is required to disprove the ATO ‘debt’ with the onus of proof on the taxpayer. The ATO is under no legal obligation to provide all the information it relies on to make its assessment. Once a debt is raised, the ATO can garnishee a person’s income, bank account/s and so on. Income and debt allegations can go back longer than than a person is required at law to keep tax records. There is evidence of the ATO misleading investigative tax tribunals or even the courts by withholding information at minimum. ATO whistleblowers have been treated the same and worse than the Robodebt whistleblower. Government departments do not like the truth being publicly exposed!

The similarities between the unconstrained powers of the ATO and the behaviours adopted by DHS under Robodebt are stark. It’s almost as if DHS sought to implement the ATO’s powers and systems in welfare administration. But the questionable legality of this is highlighted by the Robodebt Royal Commission’s concern about the behaviour of the ATO. The Commission says “… the Commission considers that there is a serious question as to whether information was lawfully disclosed by the ATO to DHS for the purpose of data matching under the Scheme.” (Page 504)

Surely, if the ATO had properly attended to the lawfulness of the information transfer, Robodebt may not have occurred. The question must be asked: was there a quiet ‘wink-wink, nudge-nudge’ between the ATO and DHS on implementing an ATO-type system in welfare?

In 2019 the Federal Parliamentary Tax and Revenue Committee recommended major reform of the ATO but nothing has been done. The Chair of the Committee stated “Australians need to be protected against what has become a very powerful tax office.”

The issue is not one of seeking to neuter the operations of government. Rather it’s about effective, inbuilt checks and balances against the awesome and overriding power of government. Robodebt has demonstrated that the existing systems of check and balances are slow, expensive and cumbersome. While these systems grind on, huge harm can and is done to individual Australians.

The Parliamentary Tax Committee recommended the ATO adopt a US system of checks that applies to the Internal Revenue Service. In the USA, the IRS has an internal, independent Taxpayer Advocate whose legislative instruction is to ensure taxpayer rights. The Advocate has automatic and unrestricted access to all IRS records and processes and can and does take action when the IRS violates taxpayers’ rights. It’s fast and effective and kills abuse at its source.

If Australia is to move to a more lawful, uncorrupted system of government administration, such models as the USA Taxpayer Advocate should be adopted here.

If the DHS had had a legislated, internal Welfare Recipient Advocate similar to a Taxpayer Advocate, maybe Robodebt could have been nipped in the bud. Certainly, relying on internal government department policies to stop such government fraud is not enough. Parliament needs to take charge of the bureaucracy.

Annual Report 2022

Date of report: 16 October 2022

This report covers the period from the last AGM in October 2021 to the October AGM of 2022.

Board membership

On a personal level the year has been one of great loss.

  • Our much loved and respected Chair, Judith van Unen, passed away in May 2022 after a long battle with cancer.
  • Franc Konstek, one of the longest serving members of the board, has needed to step down due to ill health.
  • Several other members—Matt Pearce, Faduma Juma and Frances Fahey—all found the pressure of their private work necessitated their departure from the board.

All these board members are much missed and our thanks are extended to them for their invaluable contributions. As Self-Employed Australia is a not-for-profit, volunteer organisation, participation as a board member is entirely unpaid. Board members participate out of a dedication to, and belief in, our cause—the protection and defence of self-employed people.

Main activities and developments are as follows:

Advocacy Activity in Parliament House Canberra

This continued to be impossible due to Covid restrictions.

ATO Reform Program

The Federal Parliamentary Tax and Revenue Committee released its report in November 2021. It substantially addressed the ATO reform issues that SEA has been promoting. That is, for Taxpayer Rights laws modelled on those in the USA. The Committee Report came out in favour of key aspects of SEA’s reform agenda.

Not Above the Law Campaign – Supreme Court

This progressed to the launch of an application in the Victorian Supreme Court for a Writ of Mandamus to order the Victorian WorkSafe Authority to investigate the 26 individuals and entities that SEA named in our s.131 application under the Victorian Occupational Health and Safety Act. This relates to the failure of the 2020 Victorian hotel quarantine program that led to more than 800 deaths in Victoria.

That is, SEA made application (under s.131 of the Act) to WorkSafe against 27 individuals and entities and WorkSafe has only responded by prosecution of the Department of Health.

At the time of writing this report, a decision from the court is pending.

UK and USA networking/partnering

SEA continues to work with like organisations in the UK and USA to further the cause of defending self-employed people. This culminated in a joint meeting in London in September 2022.

Federal Election 2022

This resulted in a change of government from the Morrison Coalition to an Albanese Labor government. The implications for self-employed people mainly relate to commitments from Labor to create a ‘third-way’-type definition of worker under the guise of the ‘gig’ economy. The impact of this would effectively be to destroy the legal status of self-employment. SEA is campaigning against this.

Gig economy advocacy

SEA made a submission to the Productivity Commission Inquiry into the Aged Care sector as it relates to the use of self-employed people and gig platforms.

Personnel High Court case

The High Court released a decision in early 2022 with major implications for self-employed status. Essentially the Court ruled that where a written contract is clear and comprehensive, the written contract should be used when deciding if a person is an employee or self-employed.

Research ATO treatment of self-employed

SEA has partnered with the University of Western Australia in an application to the Australian Research Council for funding for a 3-year research grant into the treatment of self-employed and small business people by the ATO. If granted, the University will conduct and manage the research, with SEA being a support ‘partner’.

Unfair Contract laws

The Albanese government moved in September with a Bill to ‘beef up’ the Unfair Contract laws. SEA is highly supportive of this. The ‘beefed up’ laws will bring real teeth to the enforcement of unfair contract laws. This has been a continuous campaign by SEA since 2009.

Campaign to defend self-employed people: It’s going to be a battle

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self-employed-battleWith the election of the Albanese government, there’s been a frenzy of academic, union and Labor government commentary about how big changes are coming for self-employed people. There’s the:

  • Demonisation of the ‘gig’ economy, as if every gig worker works in some sort of oppressive Dickensian environment.
  • Pushing of ‘employee-like’ independent contractor concepts and of bringing such people into employment regulation.
  • Calls to change the definition of self-employment/independent contracting.
  • Renewed attack against owner-drivers.

Let’s be clear. The Albanese government has stated its intent to implement new, aggressive policies around each of these issues. Workplace Relations Minister Tony Bourke explained on ABC Radio the ‘big shift’ that’s to happen.

Frankly, we (SEA) have been around too long (since 2000) and we are too experienced to fall for the spin that this is to ‘protect’ self-employed workers. These types of agendas have been promoted by the broad Labor movement (unions, ALP, Labor academics) since the 1990s. The agenda is to squeeze the life blood out of people who are, and want to be, their own boss. We know the game.

But this time is different from the last three decades-or-so. With The Greens and at least one independent Senator, Labor has the numbers to push its agenda through parliament.

Their agenda is, of course, damn nonsense and will be cancerous to the livelihoods of Australia’s 2.1 million self-employed people. You won’t know the cancer is there until you start feeling the pain.

However, don’t expect something different from the Dutton opposition. After the Morrison government’s 2019 win, the Coalition demonstrated a brain deadness on small business issues.

  • Yes, it introduced some good ‘pay small business on time’ requirements but didn’t go far enough.

But,

  • It continued to allow the ATO to bully, harass and oppress small business people without any checks and balances.
  • It failed to implement the beefing up of unfair contract laws that were ‘ready to go’. Did it do a deal with the big end of town to put this off?

Now for some balance. While we’re warning about, and will campaign against, Labor’s destructive agenda for the self-employed, there’s some good news.

The upshot is that we have a battle on our hands. The are some positives in the Albanese government’s small business agenda, but also some shockers. We’ll be producing considerable commentary and analysis to explain the good and the bad over the coming months.

Albanese plan to smash Australia’s 2 million self-employed

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election-2022-smashThere’s now clarity on what Albanese’s Labor intends to do to self-employed small business people if elected. Labor intends to attack us.

The ALP Secure Jobs Plan says:

“Labor will extend the powers of the Fair Work Commission to include ‘employee-like’ forms of work…” Labor intends to attack “…new forms of work such as gig work.”

Last Monday (2 May) this was further made clear at an Albanese street-walk rally in Brisbane. The Australian Financial Review reports from the rally that Labor will legislate to invent new law that says that self-employed people are a ‘little bit’ an employee, like being ‘a little bit pregnant’. It’s clear that the policy is directed at giving unions control over gig workers and any other self-employed person they choose to target. Hairdressers, for example!

The policy is a direct lift from the Californian law called AB5, introduced in early 2020. It was a job killer which hit the most vulnerable self-employed people. Think of single mums running their own transcription business from home! Closed down! There are thousands of examples.

The United Kingdom has an old 1986 ‘little bit pregnant/employee’ independent contractor law. This was used by the UK transport union in 2021 to attack gig ride-sharing. It’s thrown commercial contracts into chaos in the UK.

Albanese’s Labor says it wants to do ‘nice’ things such as giving ‘little-bit-employee’ self-employed people access to collective bargaining, superannuation and the minimum wage. But this is a beat-up.

Self-employed people (us) already have easy access to collective bargaining authorised under competition laws. Superannuation is clearly required when an individual, self-employed persons (not structured as a P/L company) works for a business. The Independent Contractors Act requires that independent contractors should not be paid less than employees.

The truth is that self-employed people are protected under commercial law regulations. Think of the unfair contract laws. Albanese’s Labor wants to drag us into the mess of union-controlled industrial relations law. Forget it!

And quite recently the Australian High Court reaffirmed that self-employed people operate under commercial law. The Court also stated that UK-type (little-bit-employee) laws are not part of Australian law.

Further, the International Labour Organisation, a United Nations body, declared in 2006 that national laws should not interfere in the commercial relationships of independent contractors.

The Albanese plan defies international labour rulings and secure (High Court-determined) contract law. It is a repeat of the disastrous Road Safety Remuneration Tribunal introduced by the 2012 Gillard Labor government. This ‘protection’ invention was about to destroy the businesses of 50,000 self-employed truckies before the Turnbull government abolished the Tribunal.

The obsession Labor has with the ‘evil’ gig economy is silly. Only 0.19 per cent of the Australian workforce earned their full-time income through gig work. But Labor is using a near-hysterical, anti-gig campaign as an excuse to attack self-employed people.

It’s clear that if Labor wins government, we (self-employed people) will have a big fight on our hands to retain our right to be self-employed. It’s about our right to decide how we want to earn our living and to control our working lives. Labor wants to attack that right.

Closing the construction watchdog will harm self-employed tradies

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Unfair contract laws

In March we praised the Morrison government for moving to ‘beef up’ the unfair contract laws for small business people. Albanese’s Labor also supports this, which is great. Unfortunately, the Bill did not pass through Parliament before the election was called.

Integrity Commission – ATO

Labor has made a big noise about Morrison failing to establish a Federal Integrity (anti-corruption) Commission. Here’s our assessment of the issues and politics of this. Morrison has a model, but Labor wants one based on the NSW Commission. The NSW Commission is, however, accused of being a kangaroo court that the High Court found breached the law. The Morrison model would, for the first time, make the ATO accountable to an external body. That’s a policy we strongly support.

Industrial relations

Last week Morrison announced he would move on some industrial relations reform. Labor attacked and Morrison quickly reversed his stance. Here’s our assessment of the politics around this issue. Essentially, we say that the ‘big end of town’ wants changes to suit themselves. But we reckon that the ‘big end of towners’ are incompetent in managing their workplace relations.

Construction Industry Watchdog

If there’s one Labor commitment that stands out, it’s that an Albanese Labor government will close down the Australian Building and Construction Commission (ABCC).  We see this as highly negative for self-employed people in the construction sector. We strongly oppose this Labor policy.

Here’s our longer assessment, but in summary:

  • The ABCC has brought some discipline to the mafia-like behaviour of construction unions. Over the last two years the ABCC has had the courts impose fines totalling some $5.7 million for illegal (thuggish) behaviour.
  • What’s extremely important is that the ABCC operates a Security of Payments system in the construction sector. It’s a vital service. All construction firms within the ABCC’s jurisdiction are required to pay their subcontractors within payment terms. If they are late, they must report this to the ABCC. Subcontractors can lodge complaints with the ABCC over late payment.
    If contractors do not pay on time, they risk sanctions that ultimately include being banned from all Commonwealth-funded work. Over around the last 5 years the ABCC has recovered some $10.7 million in outstanding payments owed to subcontractors. Some major contractors have been disciplined.
    An external review of the ABCC reports a “reduction in the number of delayed payments” and “greater efforts being made to pay subcontractors on time.” This is critically important.

There’s no doubt that should Anthony Albanese’s Labor win the election, one of its highest priorities will be the elimination of the ABCC. The outcome would be renewed, unrestrained thuggery on construction sites. Further, small business tradie subcontractors would again carry the risk of not being paid. A bad outcome for all except for the thugs.

(Disclosure: Ken Phillips is a member of the ABCC Security of Payments Working Group along with representatives from the ACTU and Building Industry Associations.)

We’ll produce more election assessments on issues for self-employed people over the coming weeks.