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Albanese’s secret shock for the self-employed

This is how Labor will make sure that you are paid less for the same work

Ken Phillips

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Ken Phillips

10 October 2022

10:00 AM

The Albanese government is planning a secret shock for Australia’s self-employed people (18 per cent of the workforce). The ‘shock’ will be delivered under the guise of giving employee ‘rights’ to gig workers. Expect new laws early next year.

Such ‘rights’ are a fantasy and a con. They are (let me call them) ‘instruments of control’.

The government’s plan is to force people who are their own boss into a wage-slave environment. It’s a fundamental attack against the core ‘people’ base of Australia’s market economy. The outcome of this Labor government plan will be to strip self-employed people of their control of the money they earn when working.

The process will work like this.

If you are one of Australia’s 2.1 million self-employed people, you earn your income through commercial contracts. When you complete a job, you issue an invoice for a total amount and expect to be paid the full amount. That’s normal with any commercial contract. But the government has said it’s going to change that. You’ll be paid less.

Albanese says he’s going to give you holiday pay ‘entitlements’ for example. How will this work? Is it ‘free’ money? Assuredly not!

If you issue an invoice for, say, $100, your client will have to deduct money for holiday pay (say, $10) and only pay you $90. Your client will have to hold on to the $10 and only pay this to you when you take ‘holidays’. But you say, ‘I don’t want the $10 deducted. I want my full $100. I’ll manage my own holidays, thanks!’ Bad luck. Prime Minster Albanese says that’s what’s to happen. Get this. Albanese says that it’s your ‘right’ to have the $10 taken away from you!

But some people will say, ‘No, you’ll still get your $100 plus you’ll get an extra $10 for holiday pay!’ That’s where the con fantasy happens. Anyone who is their own boss knows that’s not what happens. They know that their client will turn around and say, ‘Ah, if I have to pay you $10 holiday pay, I’m not going to enter a contract for $100, I’m only going to offer $90.’ That’s the way the world works. People will adjust prices. People are not dumb.

The really dumb thing is that this is exactly what happens with employees. Say a full-time employee earns $1,000 a week. They are ‘entitled’ to 4 weeks’ holiday a year. That is $4,000 when they don’t work but are still employed. The truth is that the employee is really earning $1,083 a week for the 48 weeks they actually do work. In other words, the employer holds back $83 a week for holiday pay. The reason this is done is so that the employer can control when the employee takes holidays. That is, holiday pay is really a form of control.

This is how employment works. Money is denied to employees so that the employer can managerially control the worker.

This is not how self-employment works. When you are self-employed, you decide when you take holidays. Your client doesn’t control you. You manage your own money. Your client doesn’t manage or control your money. This is called business. This is called the economy. This is called being your own boss. But the Albanese government intends to stop this.

Yes, we know that the government says that the new ‘rights’ laws will only apply to gig workers. Let’s look at that.

The government accepts that gig workers are self-employed. There are about 11.9 million Australian workers. 7 per cent (around 830,000) have done gig work in any year. But only 0.19 per cent of the total workforce (around 22,500) have earned their full-time income from gig work. In other words, around 807,000 people do gig as ‘odd job’-type work in addition to (say) their full-time job.

Here are some practical questions for Albanese and his anti-self-employed promoters. Gig workers work on commercial contracts. An Uber driver, for example, might accept a fare that will pay the driver (say) $20. When the driver drops off their passenger they know they will get paid $20. But how will Albanese’s new ‘rights’ laws work?

Will the government force Uber to pay the driver an extra $1 for holiday pay? But wait. Will Uber have to hold on to the $1 until the driver takes a holiday? Who will decide when the driver takes a holiday – Uber or the driver? How will this work? What if the driver works for different ride-share companies? Will every company have to hold on to the extra $1s per ride? Will the driver have to collect ‘holiday pay’ from all the ride-share companies and, if so, how? Will Albanese set up a massive new government department to manage all this?

But there’s more. Is this ‘free money’ for the driver? Will Uber have to pay the $1 from its massive profits? Hold on! Uber has made non-stop losses since starting in 2009. What if Uber goes broke? It could happen! Alternatively, would Uber charge the customer/passenger the extra $1, so the passenger pays and not Uber? Or will Uber not pay the driver $20 and only pay the driver $19? Any of these things could happen. What does the Albanese government say?

These are questions that apply across the massive diversity of gig-type work, not just ride-share. And similar questions apply to the 22,500 self-employed people who do gig work as their main/only source of income. What then of the other 807,000 Australians who only do gig work to top up their incomes? How will the government answer the foregoing questions for these people? What a mess!!!

The reality is that in taking ‘employee rights’ and trying to apply them to self-employed people the government is effectively destroying self-employment. The two – being an employee and being a self-employed person – are totally different.

You can’t turn an apple into an orange. You can’t turn a self-employed individual into an employee. Instead, what you can do is destroy the right of people to be self-employed. Inevitably this is the Albanese government’s agenda, whether they state it or not.

Ken Phillips is Executive Director of Self Employed Australia

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Published by Nelle

I am interested in writing short stories for my pleasure and my family's but although I have published four family books I will not go down that path again but still want what I write out there so I will see how this goes

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