22 January 2015
Transcript - #2015009, 2015

Interview with Jon Faine, 774 ABC Melbourne

SUBJECTS: Industrial relations, contracting laws, Prime Minister Tony Abbott, Victorian Liberal Presidency

JON FAINE:

Thank you for joining us this morning and we will come to some of the other issues affecting the Government in just a moment, but what do you want to do about the law on contractors and employment law?

MINISTER BILLSON:

The clarity of what is a contractor versus an employee is something that is very important to everybody contributing to the workplace - whether you are the person that has been engaged to carry out certain work and complete certain assignments, or whether you are a business that is engaging that talent. 

You need to know with solid footing what the relationship is you have with the person providing that contribution. 

We have seen report after report about confusion, uncertainty about the application of the tax laws, difficulty getting an ABN for some, other cases where it is clear the person is not an independent contractor and the law is there to deal decisively with that.

This is a really important area. 

Self-employment, the opportunity to do a portfolio of work, a bundle of different activities, is very attractive for many people and many of your listeners and very attractive for mature aged people thinking “I want to stay involved with the economy, I might not want to work as an employee but I have the expertise and talent that other people will seek to purchase for a particular project”. 

What are the rules, how do we make sure they are clear, and how we can all get on creating more opportunities and jobs for our citizens. 

JON FAINE:

And the flipside to it is employers saying I’m sick of having to look after workers comp, and superannuation and all the palaver, I can just wipe my hands and tell you all you all look after yourselves now, you’re all contractors and I will just pay you to do the work as a lump sum and you sort out your own paperwork.

MINISTER BILLSON:

I think we have got to get past some of this stereotyping and these pre-chewed arguments.  That may have been the case 20 years ago but I don’t think any employer or anybody thinks that is a simple flick of the switch as you might be trying to suggest.

JON FAINE:

Well it has been in the construction industry, it’s been rife.

MINISTER BILLSON:

In the construction industry we know there has been a particular focus on this and this is also where we have seen the law become quite confused. 

In our own city, in Melbourne we have had plasterers that have been operating plastering businesses for decades, all of a sudden get an unexpected allegation that they are engaged in sham contracting, which proves - there is no basis for that whatsoever.  But I dare suggest that is part of the arm wrestle you see going on in some construction sites. 

We need to get past that; those are sort of pre-chewed, old arguments.  Now we have got independent contractors operating right across the economy, self-employed people in the professional services space,
even in media.

I have had some journalists contact me saying thank goodness that we are doing some work on this because journalists might find their day job as writing a column or something for a newspaper might not be all they have to offer, and then they do freelancing as well and that become incredibly difficult for the tax system to cope with and for the law to provide clarity. 

That is where the work is needed - it is important - about a million people are self-employed or independent contractors. 

That is a very legitimate way of making a contribution to our economy and a very legitimate course for people to pursue their livelihoods.  Clarity and certainty is what is deserved and that is the focus of our work.

JON FAINE:

Okay, there is an upside and a downside but there is also an impact on the budget because if people paying 49 cents in the dollar tax turn themselves into 30 cents in the dollar tax contractors through a $2 company, there is a loss of revenue to the Tax Office too Bruce Billson. 

Even though it looks attractive at first blush, it has got all sorts of knock-on effects.

MINISTER BILLSON:

You are touching on the very point I was hoping to make in my initial comments.  This is a rather complicated area. 

It is perfectly legitimate for people to want to be self-employed and choose that pathway as their contribution to the economy. 

There are all sorts of implications, these are what need to be worked through, and that has been revealed and recommended in a number of different reports.  We know the issues are complex and challenging but they need to be dealt with and as the economy needs to make the very best of all the opportunities that are around - self-employment, independent contracting, they are legitimate contributions to the economy. 

Let us get the rules right, settled, clear and certain and let people get on with their livelihoods. 

JON FAINE:

But isn’t it part of the Government’s ongoing determination to try to pull the rug out from under the trade union movement at every possible opportunity?

MINISTER BILLSON:

No, I would have thought the opposite is the case.  The trade union movement in the previous Labor Government went out of their way to make people that are self-employed and independent contractors the target of campaigns, allegations of sham-contracting - even in some cases industrial agreements that sought to freeze out the workplace’s opportunity to bring in targeted talent for specific work.

JON FAINE:

That was the Tax Office Mr Billson. In this industry, indeed, you’re absolutely right if you for instance are an employee and you turn yourself into a contractor but all your contracts come from the one source the Tax Office come down on you like a tonne of bricks because you are avoiding 20 per cent of your tax.

MINISTER BILLSON:

That’s right, and that shows you the current rules and suggestions that somehow this is an easy transition is simply not the case.  The rules are there.

JON FAINE:

But you want to make it easier is the point, isn’t it?

MINISTER BILLSON:

I’ll give you some examples Jon.  In the Independent Contracting Act which is one of the legislative instruments that plays a part in this area, it talks about you needing to put a newspaper ad in the area you are generally working in.  Now, the world has moved on.  Having a newspaper ad in a local newspaper to prove you are an independent contractor is a rather novel and quaint idea. 

In terms of professional services in the legal area, in IT, in engineering expertise, these are areas of great significance to our economy.  Independent contracting, self-employment is in many cases one of the more suitable ways of bringing all that talent, all of that contribution to our economy. We just need to make sure people do that in a surefooted and a certain way.

JON FAINE:

Okay and how do you protect people from being ripped off, in particular the vulnerable, with for instance now couriers typically being told you are not employees, you don’t work for me anymore and you have to provide your own vehicle, you are going to be basically dependent on me but you are going to have to do all your own on-costs, you own workers comp, your own superannuation but I am not going to pay you any extra. 

MINISTER BILLSON:

These are areas where making that decision is an important choice that people need to be abreast of all the facts and that is why clarity is again very important. 

If you are being asked to form yourself into a business and you are not, then there are consequences and that is why the law is strong and there are tools available to deal with it. 

That is one part of the conversation that needs to be factored in so that people that might be vulnerable are not exploited.  But let’s not shut down an entire legitimate form of business in the examples that you point to where the Tax Office and other authorities already have the powers they need to take actions against those that are doing the wrong thing. 

So this is not about a carte blanche, not at all.  This is about recognising for a million Australians this is the pathway for their livelihood.  This is how they bring their talents and their abilities to our economy and it is an important contributor to our economy. 

To go down that pathway, let’s make sure the rules are clear, fair, contemporary and recognise that this is a legitimate form of enterprise, one that deserves the support and respect of Government and the community more generally, let’s make sure it is clear on how you go about that course for your work and contribution to the economy.

And where there is those exploitation examples, the toolkit is strong and action is taken and it should decisively be that way.

JON FAINE:

You don’t really need another fight on your hands do you?  The Abbott Government is travelling so badly at the moment on so many other fronts, the last thing you need to do is pick a fight on industrial relations to add to it all.

MINISTER BILLSON:

I must confess I am somewhat amused by your introduction Jon, about what this was about.  What a complete overreach and overstatement.  This is nothing of the kind that you described; this is an important piece of work, a part of our election commitment, one of the few remaining policies in the small business space that we have yet to fully implement. 

It is part of our surefooted action plan to support enterprise and small business, an area where 519,000 jobs were lost under the previous Government.  We need to get small business and family enterprise humming on all cylinders because it is crucial to our economy. 

This is part of that, making sure those small enterprises know the rules and understand what is required of them so they can be surefooted in engaging in the economy and get on creating wealth and opportunity that we can all benefit from. 

JON FAINE:

As a senior Victorian Liberal and a Minister in the Abbott Government, have you had your say about the collapse in the Abbott Government’s support base, especially here in Victoria in the wash-up from the loss after one term in office of the state Liberal Government?

MINISTER BILLSON:

I have my say as a Cabinet Minister, making sure that not only the perspective of a marginal seat member, which you know I well and truly have been carrying that tag for a number of years…

JON FAINE:

Down Frankston way, yep.

MINISTER BILLSON:

Yes, a great community but one that feels the rhythms and the pulses of the political cycle and the debates that are on.  I bring that. I bring many years of experience in the parliament but as a Cabinet Minister a chance to continually make the case about the feedback, the field evidence but also the need for the case for change. 

JON FAINE:

But Minister when you have got the Prime Minister’s Chief of Staff, Peta Credlin being as much the story as the Government’s policies, you have got a problem haven’t you?

MINISTER BILLSON:

My interactions with the Prime Minister’s Office and Peta Credlin and the Prime Minister have all been very constructive.  I don’t darken the Prime Minister’s door needlessly.  I engage him when I need to on areas of policy that are important for the Government’s Economic Action Strategy. 

My dealings have been extremely positive and this is why I keep working everyday as hard as those small business men and women do, that listen to your show Jon, to make sure that this is the best place to start and grow a business. 

The growth in our economy, and it is particularly relevant for Victoria, we are at the pointy end of many of the changes that are taking place in our economy. 

JON FAINE:

You certainly are.

MINISTER BILLSON:

Well yeah I always am.

JON FAINE:

You continue to be in that electorate, Bruce Billson.

MINISTER BILLSON:

Can I just finish that point if I may? Some of those changes, and you touched on some of them in your introduction about the confectionary manufacturer, we have an economic platform and structure in Victoria that makes the need for change, makes the need for us to be our best economy. 

More pressing than it is in any other state but we have got much to lose but most to gain in my view. 

JON FAINE:

How extraordinary that there is now open speculation about whether Tony Abbott will even lead the Liberal Party at the next federal election?

MINISTER BILLSON:

I don’t know where this speculation comes from, all I know is the Cabinet, the Ministry, the parliamentary party have a very open and direct avenue to the Prime Minister to raise their points. 

We all need to realise these are challenging times for our economy, for our community and politically. 

Not only is it about the changes that we need to make to prepare our country for the future for a strong a prosperous nation, it is also about making the case for change and a lot of people would like to think a set-and-forget, leave it, businesses as usual and everything will just go away will somehow see a correction.  That is not going to happen. 

We have many great strengths in this country but we need to work to make sure we optimise them.  That takes conviction, clarity of purpose. 

We have to stay the course but we also Jon, have to make the case that change needs to be made and that is the challenging bit.

JON FAINE:

That is a very big one.  Just finally, are you happy with Michael Kroger as Victorian State Liberal Party President?

MINISTER BILLSON:

I am actually; I think he will bring plenty.  I used to remember he was a regular on your show Jon, I hope there wasn’t a breakup in bromance there because you respected his views and were very happy to have him on and talk very eloquently and insightfully around what is happening in the national political scene. 

You recognised that strength and experience, so do I, and that is why I am pleased that he has made himself available for this important role.  

JON FAINE:

He is not shy when it comes to approaching a microphone, we have invited him to speak to us, he says party rules preclude him from making any public comment until March.

MINISTER BILLSON:

I think it is at this point in the time candidates can make their case. I have but one vote and we are a political party where our leadership is selected by the party membership, not by any special interest groups.

JON FAINE:

Well he does not suffer fools lightly so I am sure he will at various times have some full and frank conversations with people, it will be interesting to see where they go.  Thank you for your time today.

MINISTER BILLSON:

Good to speak with you Jon.