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Our Rights Under Attack, Mark 2

April 2013

The evidence is out. The Australian Labour movement, with the ALP and ACTU at the vanguard, is changing the face of Australia to a vision of their own making.

Their ‘want’ is a society in which ‘big’ dominates: big government, big unions and big business. It’s a vision in which individual entrepreneurship is intentionally suppressed to favour the organization of work and life by and through elites who run ‘big’.  

The evidence that Labour is forcing Australia away from individual entrepreneurship is starkly revealed in recent Australian Bureau of Statistics figures which show a major decline in independent contracting and self-employment. Here’s our summary, which also tracks data back 35 years. In that time, self-employment increased to average around 19 per cent of the workforce. However, in the last two years, self-employed numbers have dropped by 130,000 to 17.2 per cent of the workforce. This is an historic low.

The Labor Party and unions must be joyful. The outcome is a direct result of their policies of the last two–three years specifically directed to reducing self-employment and small business. What has occurred was entirely predictable and predicted.

In March 2011, Independent Contractors Australia published an analysis (Our Rights Under Attack) of Labor’s policies and direction under its ‘sham’ contracting campaign. The article (re-published in Quadrant magazine) identified the philosophy and ideology of the campaign. It was neatly captured by a key labour academic involved in the policy push who declared '... the freedom to choose to work or be engaged as a contractor rather than as an employee must be constrained, if the integrity of our labour law system is to be protected.'

That is, Labor views the very existence of self-employed people as a threat and assault against its institutional control of how people work. For them, people must be prevented from being their own self-employed boss. By it’s essence, such an approach requires the suppression of individual entrepreneurship.

Our analysis (March 2011) identified the processes that the Gillard Labor government intended implementing once it obtained control of the Senate (with the Greens) in July 2011. This included using the institutions of government, particularly the Australian Taxation Office, to manipulate government administration to halt and reverse the rise of self-employment. We were able to lay out what they intended to do. They have done what we predicted and more.

In our view, based on the evidence, Gillard’s Labor set out to suppress self-employment and has been extremely successful in achieving its aims.

The reported drop in self-employment has been analysed by the economist Professor Judith Sloan in The Australian (The flight from independence). She explains, for example, that the fall in total worker numbers in the construction sector (where large numbers of self-employed work) does not account for the overall drop. For example, construction has some 45,000 few workers but 50,000 fewer self-employed people. The same applies in the administrative and services areas where large numbers of self-employed also work. Prof. Sloan concludes that the fall in self-employed numbers has “… a lot to do with the Gillard government's deliberate strategy—at the behest of its trade union mates—to make life increasingly difficult for independent contractors.”

She identifies a number of government strategies that we at ICA have been monitoring. These include the
  • declaration of clothing workers working at home to be employees;
  • setting up of a tribunal to control the business income of owner-drivers;
  • so-called ‘sham contracting’ campaign by government departments;
  • big increases in tax reporting requirements of the self-employed in construction;
and the biggest one
  • a deliberate ATO campaign to deny individual self-employed people Australian Business Numbers.

The respected business commentator and analyst, Robert Gottliebsen, has also looked at the self-employed downturn. He’s come to similar conclusions to those of Prof. Sloan. Writing in Business Spectator (The cost of Labor’s contractor carnage) Gottliebsen adds to Prof. Sloan’s list the fact that Labor has had five small business ministers in 15 months which demonstrates a disdain for small business people.  

He compares the drop in self-employed numbers with Institute of Public Affairs figures showing a dramatic rise in public sector industries’ employment of 406,000 since the GFC. The following two graphics provide interesting comparisons:



What becomes evident is a massive and constant increase in the numbers of those employed in public sector industries and (over the last two years) a dramatic drop in the number of self-employed people. This is not healthy for society or the economy.

People in the public sector provide valuable services. However, the cost of their services must be paid for from profits generated in the private sector that primarily come from entrepreneurship and innovation. In suppressing self-employment, the Gillard Labor government suppresses the very income and profit-creating capacity of the community, thereby putting at risk the services provided by the public sector. It’s bad all around.

And, at ICA, we totally agree with both Prof. Judith Sloan and Robert Gottliebsen that the downturn in the numbers of self-employed is the result of deliberate policies by the Gillard Labor government.

We’ve analysed in detail how the Australian Taxation Office has purposely decided not to provide individuals with Australian Business Numbers. If an individual doesn’t have an ABN, he or she
  • cannot register a Business Name;
  • will have 46.5 per cent of their invoices withheld from them by their clients;
  • will not be able to apply for tenders; and
  • cannot obtain workers’ compensation coverage and other registrations.
Effectively, the Gillard government is denying them the ability to be a business.

We responded to the ACTU’s sham inquiry into ‘secure work’, labelling the unions’ demands for such work as an imposition of ‘work bondage’.

What is at stake is the right of people to decide the way they wish to work. Yes, employment is a legitimate form of work engagement, but so too is independent contracting and self-employment. The duty of government is not to impose one form or the other on the community. The duty of government is to be impartial and to allow people to exercise that choice. The way in which the administrative arms of government operate must allow that choice.

On a political level the Labour movement, through its union arm and its political wing (the Gillard government), has intentionally sought to impose its will. The Labour movement and the Labor government have made quite clear their opposition to the smallest of the small business people in Australia—self-employed individuals. They are doing all they can to stop us being self-employed.  

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