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Wednesday, 16 June 2010
Page: 5613


Mr BILLSON (9:48 AM) —I rise today to support the thousands and thousands of independent contractors and self-employed people who are facing the threat of the Rudd government breaking yet another promise. Prior to the last election the Rudd Labor Party assured the independent contractors of Australia and the broader small business community that they would make no changes to the personal services income tax law that affected self-employed and independent contractors. Having made that assurance, understanding the political importance of that commitment to thousands and thousands of self-employed and independent contractors, the Rudd government have done everything that it can to wiggle and weasel out of that commitment and pursue a tax gouge on those thousands of hardworking Australians who choose to be self-employed and independent contractors and not employees within the net that the union movement and Rudd Labor would seek to entangle them in.

What we have seen is this. Despite that very clear and explicit pre-election commitment from the Labor Party, the government once elected went and instigated a review of the very laws it promised it would not change. It referred the matter to the Board of Taxation. The Board of Taxation came back and implied that there was some kind of rip-off going on. They implied there was a rip-off not on the basis of some widespread identification of people not complying with the current law but by carrying out targeted compliance activity—that is, activity that was known to target those where there was a concern. Then they said, ‘Of that group where there is a concern some of them were not doing the right thing.’ That was proper compliance activity. That is what the government and the tax office should be doing. That is in no way a justification to turn these laws on their heads and to have these independent contractors and self-employed people thrown into the entanglement of employee-like arrangements when that is not justified by the basis of their business.

The Board of Taxation made some remarkable recommendations: having more red tape; having more complexity in introducing new reporting obligations; extending rules of attribution in the way income was provided; clarifying, simplifying and reducing deduction options; putting in new tests about whether or not people were employees; and introducing a deemed labour income approach. This nonsense was too hot to touch, so the government sent it off to the Henry tax review. The Henry tax review came back with recommendation No. 10, to mess with the laws. Those were the very laws the Labor Party said they would not touch. Understandably, independent contractors and self-employed people right across Australia, led by the independent contractors association, and many other independent professional bodies are outraged by this betrayal.

The coalition are committed to the current laws. We undertake not to change them, because they have worked effectively. No case has been made to throw self-employed and independent contractors into some dubious, spurious, mysterious net of employee-like arrangements. No case has been made. (Time expired)