By ‘closing the loopholes’, Labor ultimately seeks to undermine self-employment, casual employment and competition, Libertarians must take note.
November 17 2023 The scene is the 2023 HR Nicholls Society conference in North Sydney; the speaker is Ken Phillips; the topic: Federal Labor’s ‘Closing the Loopholes’ bill.
Phillips is unassuming, plainly dressed, but he means business. In a conference otherwise dominated by partisan interests and the society’s own history, he cuts through with a powerful and practical message. Having dissected and analysed all 274 pages of the ‘Loophole’ bill and written his own submission (on behalf of Self-Employed Australia [SEA]), he has been in regular contact with the crossbench, who Labor currently relies on to pass legislation.
Phillips was optimistic then, satisfied that the crossbench were heeding his call for caution and discernment over the prevailing narrative. But it was not to last; Senators David Pocock and Jackie Lambie combined to split, then pass, the first tranche of the bill, including concerning new provisions that escalate the power of union delegates. But the worst is yet to come.
Subject to an inquiry this year, the remainder of the bill seeks to undermine commercial contracts, create strict pre-conditions that define ‘casual’ employees, and effectively prevent workers from being their own boss.
The loophole bill relies on the rhetoric of exploitation: pitting workers against employers and removing agency from consenting participants in the ‘gig economy’.
90% of people working for digital gig platforms are also employed elsewhere.
The reality is quite different – I should know, having been a contract worker and a casual for much of my working life. These reforms in fact represent a direct attack on my livelihood.
Keep it casual
As Phillips demonstrates in his analysis of wages by employee type, casual workers are financially better off on an hours-worked basis to the tune of about 6% (more if you consider the higher super contributions). What’s more, being a casual employee allows for the worker to ramp up or down their hours, take on a different employer and maintain flexibility much more readily – something I made use of as a student particularly.
Businesses also require flexibility to operate effectively in the marketplace, as demand and staffing requirements fluctuate. The loopholes bill creates stringent regulations on how an employee can be considered casual. This will simply disincentivise businesses from hiring staff as employers will have fewer options to reduce their wage liability when business is slower.
Fixed contracts
Contract and self-employed workers are also in the sights of Labor and the unions. The proposed legislation coins a new term – ‘employee like’ – to describe self-employed workers. This means self-employed workers will be subject to the industrial relations system, undermining the nature of commercial contracts between consenting parties.
As a contract worker myself, I do not miss the IR system. My generous employers allow me paid leave entitlements anyway, and I can readily work for an employer based anywhere in the world, making my own choices with regards to super contributions.
Pitting workers against employers and removing agency from consenting participants in the ‘gig economy’.
Getting a gig
A major objective of the loophole bill is supposedly to protect workers from exploitation in the ‘gig economy.’ The reality is quite different: well over 90% of people working for digital gig platforms are also employed elsewhere – they are ‘hustlers’, earning top-up income outside of regular employment.
There are concerns for market competition too. By eliminating self-employed workers from the marketplace, large operators in industries such as transport and construction will face less competition. How this market concentration will benefit workers and consumers, or is consistent with Labor’s message to voters, I cannot reconcile.
An unlikely union
It is a good deal for those large operators though, and it’s an especially good deal for the unions, perhaps revealing the true motivations behind this bill. Trade union membership has dwindled for decades, and the availability of flexible or casual work has further undermined their influence.
By forcing all workers into employment contracts subject to IR law, the unions can once again wield significant influence. Large employers can collude with these unions and suppress competition, diluting the influence of smaller or independent players in their respective industries.
The big loser is of course the workers, who lose flexibility in their employment arrangements, are forced to work in industries dominated by a few large players, and are financially less well off if they are casual.
It is truly a sad state of affairs that the party of workers would propose such a bill, but it is characteristic of Australian politics, long divorced from the interests of common workers.
Further reading: https://selfemployedaustralia.com.au/be-your-own-boss/
It’s been said that any place you can’t leave is a prison. Australia’s workplace regulation system is a prison, trapping people in thousands of pages of regulations. When you ask why we lock people up like this, we are told, “Oh it’s for their own good”.