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From the Desk of the Executive Director

Ken Phillips is co-founder and Executive Director of Independent Contractors of Australia. He is a published authority on independent contractor issues and directs research on related commercial and trade practices issues. Through his numerous articles in newspapers and think-tank and academic journals, Ken is known for approaching issues from outside normal perspectives and is frequently sought out for media comment.

Actions hurting small business

Tuesday, July 30, 2013

The Rudd Labor government is spending big on media advertising declaring that it's small-business-friendly. But the facts show a government intentionally damaging small-business people.

In the past two years, for example, the number of micro-businesses (one-person businesses) has collapsed by 130,000. This is a direct result of a package of anti-small business, anti-self-employed measures imposed by the Labor government.

Just one measure, for example, makes being a small-business person impossible.

Under Labor, the the Australian Taxation Office has been denying individuals Australian Business Numbers. Without an ABN, a small-business person cannot issue legitimate tax invoices, is unable to tender for work and can't register a business name. That is, people are effectively blocked from being a business and are forced to find work as an employee.

Further, denying people ABNs encourages the black economy and damages the integrity of the tax compliance system.

Labor has particularly targeted small-business people in the construction sector. It has introduced a complex, red-tape transaction reporting system aimed at small-business construction subbies. The outcome is to favour big business against small business.

In the clothing sector, Labor declared people who run sewing businesses at home to be employees, denying them small-business status. This has damaged small-business start-ups in the Australian fashion design industry, forcing aspiring designers to look overseas.

Enormous damage has been done to the hospitality and tourism industries, particularly in Queensland. These industries are 24/7 operations dominated by small business. Kevin Rudd's Labor, however, has imposed new industrial relations arrangements that artificially force up the cost of providing tourist services on weekends and evenings. Yet these are the peak tourist demand times.

This shows that Labor treats small-business people as if they run big business or public service bureaucracies. Rudd's Labor government consistently demonstrates that it just doesn't get small-business people. Yet Labor admits that the majority of Australian workers work in small business. That's more than seven million of Australia's 11.5 million workers.

Still, the Prime Minister wants the millions of people working in small business to vote for him. So, what's he doing? He's spending a lot of taxpayer money on radio and television ads declaring the government has a plan for small business.

Just recently, Labor's Small Business Minister Gary Gray (the party's sixth small business minister in five years) announced details of the plan. This involves the relaunch of an old online small-business information kit, Labor's response to a franchise review, and a promise to think about doing something regarding late payments to small-business people. This plan amounts to nothing other than political public relations talk.

If Rudd is serious about supporting small-business people, there is something he could do right away.

He should recall parliament and undo the damage Labor has done, perhaps starting with the recognition that in small business there's no imbalance in bargaining power between the business owner and the people who work with them.

Small-business operators and their co-workers are all equally exposed and vulnerable. They are all just people working hard to earn a living. Rudd should remove the unfair weekend cost discrimination and let people work.

The Prime Minister has the power to do things. People working in small business want action, not his political spin.
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