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From The Australian: Opportunity to Make Money Matters More than Holding Down a Job

While the Australian Taxation Office continues its mission of protecting vulnerable workers and stamping out sham contracting, their strategy of cancelling ABNs are devastating some of the genuine independent contractors being caught in the net.

Here’s an article by Grace Collier, originally published on The Australian, showing how ABN cancellations are severely impacting the livelihoods of legitimate self-employed taxpayers:

Jobs, jobs, jobs. What a dreadful bore it is when politicians bang on about jobs, particularly as they should never think it is their job to create jobs.

It is not the government’s job to create jobs. It is not the job of a business owner to create jobs. People don’t go into business to create jobs. People go into business to make money to support themselves. Sometimes jobs for other people are created along the way. But no one in this country owes anyone a job.

Instead of talking about jobs, Coalition types should talk about the need for an economy that gives people opportunities to make money. People don’t need jobs, they need opportunities to make money. The jobs narrative is turgid and out of date. It doesn’t appeal to the aspirational, especially not the young. Thanks to technology, people can make money anywhere, anytime, doing anything. Google “Airtasker” and see for yourself.

There are many Australians such as Sarah (not her real name) who can’t think of anything worse than having a job. What a shame the Australian Taxation Office won’t let her earn a living the way she wants to. What a disgrace it is that under a Coalition government what has happened to Sarah is happening to other people, around Australia, all of the time. Sarah is nearly 50 and has worked all her life. Up until 2009, she always had a job. That year Sarah’s boss retired.

This left her jobless, but she had reached a stage in life where she didn’t want another job. She didn’t want to be an employee any more. She didn’t want to get up at a certain time every morning to go to an office and spend all day with people she might not like. She didn’t want to work the hours dictated by someone else, to take holidays only when she was allowed; she didn’t want to have her life controlled by others.

Besides, there were health issues that had to be managed. Work could be done as long as it was done when the body allowed. Some days she could work for hours, other days not at all.

At this time, Sarah could have lined up at Centrelink with her hand out for other people’s money. However, she wanted to keep working from her home, which she owns and loves.

Sarah knew she was really good at typing. Searches online revealed that organisations that contract to othersincluding the public sector needed documents typed up into transcripts.

Sarah registered and tasks were offered electronically. If she wanted a task, she clicked an icon. If she didn’t, no problem.

Since 2009, and up until two months ago, Sarah sat in front of her computer, working when she felt like it, as a self-employed transcriptionist. This involved listening to voices on an electronic file and transcribing their words accurately at 90 words a minute. When the transcript was complete, it would be uploaded to a secure server. Once a fortnight, Sarah sent off her invoices and received payment.

Most of the work was typing up court transcripts. Some of it was transcribing ATO interviews. A lot of the tasks were offered at 4pm or later, for urgent completion by the next morning.

To work as a self-employed person, by law people must hold a personal Australian Business Number, which theATO issues. Two months ago, out of the blue, the ATO phoned Sarah. It was doing an industry audit and wantedsome of her invoices.

Within days, another phone call came, followed up by a letter. Sarah was “not carrying on a business”, apparently. Her ABN was cancelled, effective immediately. Suddenly, all her income went up in smoke. Sarah can’t type urgent transcripts for the tax office in the evenings anymore because the tax office has taken away her ABN and she is not allowed to work without it.

On the ATO’s website is a tool telling people if they qualify to be self-employed. Sarah qualifies but still her ABN is cancelled.She says: “I have tried to imagine possible scenarios for the cancellation and then gone about trying to put things in place, commenced advertisements, tried to obtain a business name, reapplied for my ABN, attempted to restructure my business and in fact go in partnership and apply for a partnership ABN, but I can only imagine, as that was refused, I am blackballed with obtaining another ABN at this stage while an appeal is in process. I am left with going from hard working taxpayer to Centrelink applicant.”

Sarah is not alone. For a few years the ATO has been on a mission to stamp out sham contracting for the protection of vulnerable workers. Unfortunately, the genuinely self-employed are caught in the net. Lives are destroyed in theprocess.

Malcolm Turnbull ran on a platform of innovation, and the Liberals love to say they are the party of free enterprise. Yet on their watch we have seen a collapse in the number of new businesses being launched.

As revealed in The Australian this week, the number of new businesses each year, as a share of incumbents, has fallen two-fifths across the decade to 2015.

Self-employment is the main gateway to business ownership. A person leaves a job and starts doing work as a self-employed contractor. Before too long they have so much work they need to hire someone, and on it goes.

Four years ago there were 3,127,866 self-employed people with ABNs listed with the ATO. Now there are 3,279,628. This is 4.6 per cent growth across four years. If the government wants more businesses to form, it must do everything it can to grow the ranks of the self-employed. If the ATO continues its actions against people such as Sarah, the rate of new businesses formed will keep dropping and there will be more people on the welfare queue, baying for jobs.

The minister responsible, Kelly O’Dwyer, can add this policy failure to her existing list.

Certica® has provided compliant independent contracting solutions to Australian companies for over 16 years and we pride ourselves on finding solutions for our clients who want the freedom that compliant and fair contracting arrangements provide. If you engage contractors and you have a concern about managing your workforce, please contact us immediately for a no-obligation risk assessment and practical tips to ensure you’re always a step ahead.

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