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Bill Shorten says 'no change' to PSI

15 October 2010

Assistant Treasurer Bill Shorten appears to have put a stop to concerns about self-employed tax by announcing in the media that there will be 'no change'. He is quoted as saying, "It is not the government's policy to make further changes to the personal services income laws governing independent contractors." We welcome this.

ICA's President, Norman Lacy, has written to Mr Shorten asking for a formal government statement of 'no change', and requesting discussions. Here's the letter:



The Hon Bill Shorten MP,
Minister for Financial Services and Superannuation; Assistant Treasurer,
PO Box 6022, House of Representatives, Parliament of Australia,
Canberra ACT 2600

Dear Minister,

Re: Gillard Government's Policy Regarding the PSI Taxation Laws


I seek to initiate direct discussions with you regarding the Gillard Government's policy on the retention of the current PSI taxation laws.

Independent Contractors Australia (ICA) is a not-for-profit advocacy and lobby group established in 1999 and dedicated to securing and protecting the rights of the 2.03 million self-employed (small and micro) business people in Australia (see attached 'ICA Brochure').

On the 13 October 2010 you were quoted in the Australian Financial Review (page 3) as making the following statements to the journalist John Kehoe in response to an article written by our Executive Director, Ken Phillips that appeared in the AFR on 11 October.
  1. "It is not this Government's policy to make further changes to the personal services income tax laws governing independent contractors. Let me be clear to AFR readers---we have no desire to change those laws, or make life difficult for self-employed working people".
  2. "There is a growing black market of sham contracting where dodgy employers forced employees onto contracts to avoid paying super and other entitlements. The ICA knows this but presumably chose to ignore it for ideological purposes".
Could you confirm in writing to us that your first comment (1. above) is an accurate statement by you on behalf of the Gillard Government? We have been seeking such an unequivocal commitment from the Rudd and Gillard Government's for the past five months.

For if this published statement by you is accurate, it is a highly significant statement for the 2.03 million self employed and independent contractors in the Australian workforce and we would like to ensure that they are aware of it. It represents the first time the Gillard Government has formally and publicly committed itself to the bi-partisan Australian government policy regarding the taxation rights and obligations of this sector of the of the Australian workforce---a policy that was established and maintained by the Howard and Rudd governments and their respective Federal Opposition parties.

Regarding your second statement (2. above) we wish to make it clear to you that we share your commitment to addressing any existing "black market of sham contracting where dodgy employers forced employees onto contracts to avoid paying super and other entitlements". We have consistently supported policies by Australian governments that have sought to eliminate "sham contracting". Our organisation is fundamentally committed to protecting only genuine contracting. Sham contracting undermines our mission and the achievement of our objectives on behalf of independent contractors.

We also wish to make it clear for you that we are an organisation with no political ideology and, since our establishment in 2000, never have had such an ideology---being fiercely independent of any political affiliation. It appears from your reported statement that you believe otherwise. Because I feel that your belief is a reflection on the integrity of my Board (a list of our Board members is found on page 4 of the 'ICA Brochure'), I would like to have the opportunity to directly disavow you of it. Such a public assertion of this erroneous belief undermines our contribution to national policy formation in respect to the welfare of more than 20% of the national workforce. Before both the 2007 and 2010 national elections we publicised to our constituency our highly positive acknowledgement of the policies of the Australian Labor Party and their successful implementation.

I would also like to have the opportunity to brief you on the success of our current campaign to promote our 'Charter of Contractual Fairness' (also attached) to Australia's large corporations and government instrumentalities. Our meetings with senior executives of 80 the leading Australian corporations are continuing (see attached letter to CEOs). The campaign has the potential to have a significant impact on the productivity of the business-to-business (B2B) relationships that these organisations have with independent contractors and self-employed workers.

We would be very happy to meet with you at a convenient time to discuss these and other issues relating to independent contractors, including our proposed research into their profile and contribution to the Australian economy.

Yours sincerely,

Norman Lacy
President, Independent Contractors of Australia



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