Assessment of the parties’ small business positions

Full ICA Statement on the 2016 Federal election

22 June 2016

In all past federal elections Independent Contractors Australia has sought to detail and explain each party’s policy and positions as they affect small business people. We express our conclusions to help people draw their own conclusions.

In this 2016 election we draw the following conclusions:

  • The positions of both Labor and The Greens pose a threat to small business people.
  • The Coalition has generally delivered on its small business commitments from the last election. The Coalition has key policies to defend and protect small business people from the threats posed by Labor and The Greens.  
  • The independents in the Senate have been solid in their support for small business people.

A dominant factor shaping our conclusions is the issue of the ‘Road Safety Remuneration Tribunal’ in that it is specifically designed to destroy the businesses of one small business group – owner drivers. This RSRT is a template that could be used against other classes of small business people.

  • Labor and The Greens support and promote the RSRT.
  • The Coalition and the independents (except Motoring Enthusiasts) repealed the relevant Act in April 2016 and still oppose the RSRT.

Below is a full explanation of the approach to small business by each of the major parties and the independents over the last three years.

Overview of issues and positions

We stand by our conclusions as stated above. But there is actually a mixed bag of positioning by the Coalition, Labor and The Greens. Over the last three years, each of these parties has been for or against small business. Depending on the issue, ICA has on some occasions supported the Coalition under the Abbott Government’s leadership; but then strongly opposed it on others. The Turnbull Coalition has been consistently pro-small business. In turn, Labor and The Greens were strongly pro-small business on some issues, but anti-small business on others. The Independents have been pretty consistent in being pro-small business.

Here’s how the primary issues stack up. We do not include commentary on tax issues.

Unfair contract laws
The Abbott government promised to extend unfair contract laws to small business people but did a behind-the-scenes deal, limiting the protections to contracts to the value of $100,000. This effectively neutered the laws. We attacked the Abbott government and praised Labor, The Greens and the independents at the time.

When Abbott lost the Coalition leadership, the new Turnbull government passed the unfair contract laws in 2015 with the $300,000 threshold in place. Labor, The Greens, the independents and the Turnbull government were all ultimately pro-small business on this fundamental fairness issue.

The history of the story and our commentary is here.

Reforming competition laws
The Abbott government ‘played around’ with reforming competition laws over the ‘effects’ test, but did nothing and essentially caved in to the big business lobby. This competition reform sought to make it more difficult for big business to damage small business competitors. We explained it here.

The Turnbull government did, however, pass the ‘effects’ with the support of The Greens and the independents, but Labor sided with major big business lobbyists (Coles & BCA) in opposing the reforms.

Small Business Ombudsman
The Abbott Coalition government promised to introduce a Small Business Ombudsman—which they did. This was supported by Labor, The Greens and the independents. However, the Ombudsman’s role is essentially that of a ‘talkfest’. The key power that the Ombudsman ought to have—to undertake dispute mediation for small business people—was not delivered. We strongly opposed the Abbott government over this, but the legislation was passed by the time Turnbull took the leadership. This shortcoming should be fixed by whoever wins government at the election.

BIG threatening issues:

What has staggered us is the intentional policy of Labor, with strong support from The Greens, to deliberately target small business people to destroy their businesses as well as harming workers. This, for us, is the key election issue.

Destroying owner-drivers
During 2016 the  Road ‘Safety’ Remuneration Tribunal (a creation of a previous Labor government) intentionally imposed massive price-fixing arrangements on owner-drivers to send them broke and to shift business to the union-controlled big trucking companies.

The Turnbull government saved owner-drivers by closing down the Tribunal with the support and even leadership of the Senate independents (with the exception of Ricky Muir of the Motoring Enthusiast Party).

Labor and The Greens opposed closing the Tribunal, even though the destruction of small business was clear and obvious. Bill Shorten has said that he will bring back the Tribunal if Labor wins the election. Based on The Greens support for the RSRT, it should be expected that they would vote for its reintroduction.

The history of events of the RSRT is here.

If Labor wins the election and forms government and The Greens control the Senate, the promise is to re-introduce this small business destructive law. Tens of thousands of small business owner-drivers will be attacked and put out of business. ICA sees this issue as historically extreme and dangerous. The RSRT sets a dangerous precedent for small business rights. We explain below.

Attacking vulnerable workers
Recent scandals have exposed unions colluding with big businesses to reduce low paid workers’ pay, with the authorizing of such agreements by the ‘independent umpire’, the Fair Work Authority. Specifically, the ‘shoppies’ union, the SDA, has created industrial agreements with Coles and other big business to reduce workers’ pay.

The Age and Sydney Morning Herald described this as “… a moment of great shame for Australia’s ailing union movement and for one of this country’s most significant companies.”  The Coles-SDA deal gives Coles a lower cost and therefore a competitive advantage over its award-reliant, independent supermarket, small business competitors.

Reflecting on the Coles-SDA deal, Australian columnist Grace Collier described the big business-union-political dealing making, this way: “Without the money from Australia’s biggest businesses, our biggest unions would be broke…” The big business-to-union payments were described as ‘corrupting payments’.

Like the exposure of the Coles-SDA deal, ICA has campaigned hard against payments made from the transport giant Toll to the Transport Workers Union.  Toll’s lawyers admitted that Toll paid the TWU for the TWU to harass Toll’s competitors.

A new historic political situation: A perspective

What has emerged is something new, historic and of massive concern. Here’s our ‘take’ on the situation.

Discussion that explains Australian political divides in simple terms of ‘left’ versus ‘right’ is now largely irrelevant and belongs to the past. Australian unions used to be divided between ‘communist’ unions and anti-communist unions who fought each other. Labor was supposed to be pro-worker. Conservatives/Liberals were supposed to be pro-business. Those characterisations no longer hold as simplistic explanations.

Over the last decade at least, something else has emerged. It is a reorganization of the union/Labor movement into a powerful business model partnering with select large businesses and generating billions of dollars in revenue and profits for both parties. This is of the utmost interest to Independent Contractors Australia because this union/Labor/big business model directly relies on damaging, even destroying small businesses—for example, self-employed truckies.

The new business model works like this:

  • Unions do deals with ‘friendly’ large businesses under the mask of industrial relations either to reduce the pay of employees and/or to destroy small businesses. Witness the Coles/SDA deal, the anti-owner-driver laws and the Toll/TWU payments.
  • These deals give the large businesses a competitive advantage over small businesses and other competitors. The large businesses make payments to the unions with which they deal. These payments have been termed ‘corrupt’.
  • The unions make payments to the Labor Party and The Greens and spend millions to put or keep Labor and The Greens in political power.
  • In controlling political power, Labor and The Greens work to ensure that this new controlling ‘system’ stays in place and expands.

It’s a circular process.

  • Unions/big businesses do deals to give big businesses competitive advantage.
  • Big businesses pays unions.
  • Unions pay Labor and The Greens
  • Labor and The Greens create laws to favour the union/big business deals.

This can be described as a ‘competition destruction’ process that assaults Australia’s free-market economy. It has the effect of concentrating economic and political power in the hands of select unions/big businesses.

In this new situation, small business people, their employees and the employees of large businesses are all politically and economically powerless. We are all vulnerable people in the face of this powerful political and economic elite.

This was not the situation under the Hawke and Keating Labor governments. In fact they were strong pro-free market Labor governments. This was not the situation under the Rudd Labor government. But it is the situation that’s now emerged.