Small business stories

bordsilver · Oct 25, 2014

From an interview with Leslie

Leslie Hughes said:

Since I left high-school, I've picked up differing freelance roles which have enabled me to hire some mates to do various work for me. Anyone who has hired people will know that it's hard. There are workcover forms, super forms, tax forms, PAYG calculations, rules about certain hours, rules about certain conditions, excess hours, and a whole lot more. A lot of these rules serve a purpose, but if I want someone to help me out for a few hours and then pay them by-the-books, I might have a day of figuring out what paperwork needs to be filled out. I might also find that I was breaking some law.

I first hired a 20-year-old friend when I was 19 to help me work on a software project. They'd sit beside me on another computer and do part of the work while I'd do another part on my computer. Another friend, who was like a mentor, mentioned that I needed workcover. I had no idea. It seemed absurd that I needed insurance so my mate could type some code on a computer next to me. I rang the Workcover people to ask them what the deal was. It turned out by not having Workcover while someone was working for me I had been breaking the law, to which I had openly admitted over the phone. I was fined ~$400. I did know that I had to pay Super, and kept harassing my mate in telling him to bring in his details so I put the cash into his account. He knew I had put the money aside and he trusted me. It took him maybe six months to finally bring in his details, and when I rang up to find out how I to transfer the money across, it turned out that Super must be paid into an account within three months, I had broken the law again. I was fined ~$300.

Of course, each extra time you hire someone, you are more prepared and it takes you less time to get the paperwork done, but with the introduction of WorkChoices, then FairWork, and then possibly something new with the current federal government, you constantly have relearn how to do the "right" thing.

Why tell this story? To illustrate a point: How is small business or anyone else who can't afford to keep workplace lawyers on a retainer supposed to hire people without spending lots of time and bringing on unnecessary risk? Add the complications and risks of hiring people that you do not know, and hiring becomes even less appealing.

The majority of jobs exist within small to medium sizes business, and despite the boogeyman stories, the majority of businesses owners want to do the right thing, but it's hard knowing what the "right" thing actually entails.

I still feel that I didn't deserve to be fined, but how is a poor 19 year-old supposed to fight it? Unnecessary and harmful red-tape which punishes honest actors needs to be scrapped.

Although most workplace regulation is done at the federal level, one policy which is a big part of the Victorian LDP platform is to scrap the "jobs tax", better known as the "payroll tax". For organisations which are subject to this tax, it would bring down the cost of paying wages by 5% making Victoria a much more competitive in labour costs without cutting wages.

At the Federal level, LDP Senator David Leyonhjelm was responsible for splitting the carbon tax repeal bill as to keep the tax-three threshold from going back to $6,000 from the $18,000 mark. The LDP's federal policy is to make the first $40,000 per year, or ~$800 per week tax-free. This means people on lower incomes, particularly younger people, get to keep more of what they earn, and will also make it easy for employers hiring young people in that they will not have to spend time calculating PAYG/etc.
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bordsilver · Oct 25, 2014

Hansard from the first part of Bob Day's maiden speech to the Senate.

Senator Bob Day said:

When it comes to jobs and houses, Australia is not a free country. Let me begin with barriers to getting a job. For the low-skilled, poorly educated or socially disadvantaged, or for those who lack connections or even self-confidence, the barriers to entry to getting a job are serious indeed. When I started in the housing industry 40 years ago, every tradesman had an apprentice. Apprentice wages were very low, as apprentices were treated very much like students and received the equivalent of a student allowancelike every other student in the country. Young people who were not particularly suited to or interested in academic study attended technical schools and then did an apprenticeship. Since then, we have made employing apprentices such a nightmare that few tradespeople are willing to take them on, yet there are thousands of unemployed young people who would love to learn a trade and get a start in the workforce. Whilst 'education, education, education' has become society's mantra, forcing young people to stay on to year 12 when they are clearly not enjoying it is both foolish and wrong. It condemns them to a life of misery.

I spent many years working on building sites. I came across many young lads not enjoying school, causing trouble at home and getting in trouble with the police, who then started working on a building site. I can tell you that by Friday night they were too tired to be hooning around in cars, setting fire to brush fences and spraying graffiti at all hours of the night. I know hundreds of tradesmencarpenters, bricklayers, tilerswho left school at 15 and have gone on to lead very happy and successful lives. These same early school leavers now all have cars and boats and two or three investment propertiesand they send their kids to private schools. They are also members of the local Country Fire Service or surf-lifesaving club and they coach local football or netball teams. They are good citizens, yet they received very little in the way of formal education. As the old saying goes, it is not what you are good at at school that matters but what you are good at in life.

I note the Newstart allowance at the moment is worth about $240 a week and the minimum wage is about $640 a week. Between $240 and $640 there is a no-go zone where anyone who offers or accepts anything in between is breaking the law. In fact it is even worse than that because we do not permit anyone to work for any amount between nought and $640. We praise people who work for no moneyworking up to 40 hours a week in op shops and nursing homes and for the RSPCAbut we do not allow them to work for more than zero until you reach $640. If you are allowed to work for nothing, surely you should be allowed to work for something. It is absurd.

Australia has been groaning under this yoke for a century. In circumstances like this, sometimes the only way to achieve a breakthrough is to consider a break-with. So when I decided to run for office to go and do something about this, a well-known Adelaide businessmanno names, just initials: Roger Drakesaid to me: 'Bob, you will not get in. Politics is designed to keep people like you out.' But given the clear emergency that now exists with respect to youth unemployment, in particular tragically high levels of youth unemployment and underemployment in my home stateover 40 per cent in some areasthe time has surely come to allow young people who want to to opt out of the workplace regulation system and allow them to work at rates of pay and under terms and conditions which they consider are best for them.

Of course there is outrage when I say these things. I hear, 'They might be exploited.' But where is the outrage when these same young people end up on drugs, get involved in crime, suffer poor health, become pregnant, get recruited into bikie gangs or even commit suicide? No, there is only outrage when they want to take a job that suits them but does not suit the government. What percentage of employers exploit young people anyway? Is it one per cent, five per cent, 10 per cent? So we stop the other 90 per cent from hiring people because of some who might behave badly. Trucks career out of control and kill people. Do we take all trucks off the road? Of course not. Athletes cheat and take drugs and fix matches. Do we ban sport? Of course not. Society cannot function if you apply that principle. And, yet, we apply it to people wanting to get a job.

As has been widely reported, the Treasurer and the Prime Minister are open to suggestions from the crossbench on where savings might be made to get the budget back into surplus. Well, here is a silver bullet, Prime Minister: the government could reduce its welfare budget, reduce its $5 billion job placement program, reduce a dozen social illsall costing millions of dollarsand, at the same time, start collecting income tax if it would simply allow those young people who want to to opt out of the workplace regulation system. There are literally thousands of jobs in rural and regional Australia where young people, in particular, who are living at home rent-free, with no commuting costs and a low cost of living, would be able to get local jobs which suit them.

Just yesterday, I had a young Y20 delegate to the G20 Youth Summit in my office seeking my support for, and I quote, 'Ensuring young people have flexibility in negotiating workplace agreements.' Young people are telling me this is what they want. Let me be clear about one thing: I am not advocating a return to Work Choices. I was a vehement opponent of Work Choices. In fact, I visited this place on a number of occasions, meeting with ministersthey know who they are because they are still hereand imploring them not to proceed along the Work Choices path. I said: 'Leave Peter Reith's 1996 Workplace Relations Act alone and simply allow those who want to to opt out. Those who wish to stay in the workplace regulation system could do so. But those who did not want all that stuff could opt out.'

A lot of employers and a lot of employees were very comfortable with Peter Reith's Workplace Relations Act because it told them what to do. But there were some employees who did not want to be bound by it all; hence, my proposal to allow them to opt out. Well, here I am nine years on saying the same thing. As history shows, those ministers did not listen to my advice last time, and we went from a 600-page Workplace Relations Act to a 2,000-page disaster called Work Choices. Now we have its successor, the Fair Work Act, comprising 3,000 pages of rules and regulations, which is all fine for those who want them. But what about those who do not want them? I have no problem whatsoever if people want to work within the regulated system with its awards, minimum wages, unfair dismissals, joining of unions and so onno problem, whatsoever. Just don't make it compulsory. People do things for their reasons, not ours.
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willrocks · Oct 25, 2014

It has become too prohibitive for small businesses to employ people in Australia, not just the cost, but all the red-tape. Many of the big corporations are shifting jobs and profits overseas. We've lost nearly all our manufacturing capabilities. Manufacturing now accounts for less than 10% of GDP.

It makes me wonder where Australia is heading over the next decade.

boston · Oct 25, 2014

willrocks said:

We've lost nearly all our manufacturing capabilities. Manufacturing now accounts for less than 10% of GDP.

It makes me wonder where Australia is heading over the next decade.
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I think you know the answer to that! :/

bordsilver · Oct 25, 2014

A case study by the CCIQ said the following:

Horticulture business in Wide-Bay Burnett region said:

About the Business: The company is a family run and owned business, which grows a number of citrus fruit varieties for both domestic and export/international markets. They have 6 FTE (including 3 family members) but during picking season employ up to 100 seasonal /temporary workers, most of them being working holiday visa holders.

- The business is regulated by 29 separate agencies and authorities; and audited and inspected by 7 separate agencies and bodies.
- An average 255 hours is spent every year monitoring regulatory changes and educating themselves and staff about compliance requirements.
- The business outlays approximately $10,000 per annum in fees, licences and permits
- There are over 117 separate acts regulations and codes which apply to this business and other operating in the agriculture and horticulture sector.
- Ongoing compliance cost exceeds $138,000 per year.
- Spent over $200,000 over past 3 years in building upgrades and equipment to meet compliance and audit expectations.
- Business owner spends over 850 hours per year on regulatory compliance or half of the business owners working week.
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SpacePete · Oct 25, 2014

boston said:

willrocks said:

We've lost nearly all our manufacturing capabilities. Manufacturing now accounts for less than 10% of GDP.

It makes me wonder where Australia is heading over the next decade.
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I think you know the answer to that! :/
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I know the answer to that, but every time I try to type the answer, it gets turned into turtles. We're totally turtling turtled. More turtled than the last male Galpagos tortoise on a world turtling tour to save the entire turtling tortoise race.

phrenzy · Oct 25, 2014

I actually know Bob Day albeit through other people, my mother absolutely hates him but then she's an old hippy, she would.

When I was much younger a friend and I started a business together (we registered it and went on a small business course but basically had to keep it casual after we realised we had to be 18 to sign a lot of the required paper work). We found that for most things support and advice was avaliable with a little bit of looking though I admit my friends patents were small business owners so they often set us in the right direction.

I don't think that things are necisarily too complicated assuming you are informed on the retirements. There should be a state or federal information service that provides support on legal requirements for small or owner operator businesses. Want to hire someone? We have a complete information packet for that. Unsure about how to sort out super for yourself? Ring our hotline.

Everything could use streamlining but I think there are plenty of people who either give up on business or don't go that final step and start one because of the fear of getting things wrong and having no support.

Shaddam IV · Oct 25, 2014

It's what happens when someone writes legislation for corporations the size of BHP and Wesfarmers and then blanket applies it to every business in the country down to a milk bar. Add to that that FWA is basically a sheltered workshop for ex trades union bosses and small business in Australia does not stand a chance.

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