Tony Abbott might be getting most publicity on the mining tax and refugees but he has announced a policy to protect independent contractors and small business that is truly ground breaking.
If Julia Gillard does not follow him in at least some of these areas Abbott has an issue that will win him many marginal seats. Clearly Abbott follows Business Spectator closely because two of his initiatives are precisely what we have been advocating and the government has been ignoring.
One of the best initiatives of the Howard government was to set clear tests to determine whether a person was declared a contractor or an employee. The rules have been working well and the tax office has been winning cases in the court.
But the unions got into the ear of assistant treasurer Nick Sherry and the taxation review board came up with a crazy proposal that is best described as the small business equivalent of the original mining tax disaster. It would decimate independent contracting, turning many into a strange form of employee. It completely misunderstood the role of independent contracting in high technology, offices and trade areas. I described some of the changes in. Instead of throwing the measures out Sherry endorsed them and gave them to the Henry committee, which supported action but did not spell out what to do.
So far the government has been refusing to say whether it will introduce the Sherry-endorsed proposal to decimate independent contracting or leave the situation as it is. Abbott is very clear – he explained yesterday that he will not change the current independent contracting system (the personal services income legislation) and invited the government to follow him.
But Abbott went further. These days small business is the main group affected by unfair contracts. But contrary to the stance of the ALP in opposition, small business has been ignored in the unfair contracts legislation. Abbott has embraced the old ALP policy and will incorporate small business in the unfair contracting legislation.
Currently in cabinet there is little understanding of small enterprise. Abbott will make the small business minister a member of cabinet and give that minister no other responsibilities. In addition there will be a small business ombudsman.
This is an enormous play by Abbott. In theory all Gillard has to do to neutralise most of the Abbott initiative is leave the personal services income legislation as it is. But this might be difficult because Sherry may have given undertakings.
Both the coalition and ALP research shows that small business people tend to congregate in marginal seats.
According to Roy Morgan Research about 5.6% of all Australians classify themselves as self-employed. Morgan says the self employed now heavily in favour of the L-NP (58%) ahead of the ALP (42%) on a two-party preferred basis
Electorates with a much higher proportion of self-employed than the national average include the ALP marginal seats of Franklin (Tas) 10.8%, Forde (Qld) 10.6%, Page (NSW) 10.4%, Leichhardt (Qld) 9.7%, Bennelong (NSW) 9.7% and Deakin (Vic) 7.6%.
Given that the self employed will influence two or three voters this is huge potential prize for Abbott.
This article first appeared on Business Spectator.
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