ACT Contractors in Sights

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It’s not over yet for independent contractors. The Australian Financial Review reported last week the Gillard Government is still committed to a crackdown on sham contracting (ie the misuse of Australian business numbers to avoid tax and superannuation obligations).

I’ve blogged before about how on the face of it this is a good thing for law-abiding independent contractors – but it will mean all contractors and subcontractors will come under the spotlight. And first cab off the rank will be contractors in Canberra – so ACT contractors, brace yourselves.

Whilst Assistant Treasurer Bill Shorten has now ruled out changes to personal services income tax laws proposed by the Board of Taxation, he is considering a tougher compliance regime on contracting arrangements. This will affect us all and as yet, we have no idea what these ‘tougher compliance’ measures will be.

The AFR reported that a separate forum on sham contracting for unions to meet ministers including Mr Evans, Mr Shorten and Small Business Minister Nick Sherry will continue in this parliamentary term, after meeting three times before the last election.

This forum – which Senator Sherry originally denied existed to a Senate estimates hearing, but then later conceded it did – has already discussed an ATO audit of independent contractors in the ACT – which the AFR reports could be a model for a nationwide crackdown.

We keep hearing from the unions that sham contracting is rife in the building and construction industry and mining. So then why has the ATO chosen the ACT to launch its audit? I’m not clear on how many mining and building/construction contractors would populate Canberra but my guess is they’d have been better targetting Meekathara in WA or the Surat Basin in Queensland.

It’s fairly obvious to me that this is a way for audits to take place capturing industries not necessarily the subject of sham contracting but using it as an excuse to get more onerous compliance rules through.

Heads up ACT contractors!

©Lyn Prowse-Bishop – www.execstress.com

2 comments

  1. Ken Phillips says:

    I think Lyn is absolutely correct on this issue. The government is displaying a determination to ‘get’ self-employed people under the banner of ‘shams’. But it’s becoming clear that the term sham is being enlarged to gather in genuine contractors as well. It’s part a money grab… here’s my article from Business Spectator. http://bit.ly/aiRatw

    There’s also an agenda that is just simply against people being their own boss. We are facing a large, well resourced campaign against us.

  2. execva says:

    Great article Ken – thanks for sharing that. It’s hard to not sound paranoid when it comes to this stuff but clearly there’s an agenda and it doesn’t look like it’s working in the favour of the self-employed.

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