Peter Strong’s Address to the National Press Club on 8 August 2012

By Peter Strong . On 22-Aug-2012

Thank you ladies and gentlemen and special thanks and acknowledgement to the Deputy Chair of COSBOA, advice pharmacy Amanda Lynch, malady and other distinguished guests.

Let me acknowledge the original owners of the land, viagra their leaders past and present. Let me also acknowledge the traders and business people that existed and exist in indigenous culture. Ladies and gentlemen there is no culture on earth, and no ethnic group, that does not have traders and business people. If there was then that culture would have disappeared and that ethnic group would have been quickly sorted out by natural selection. The Phoenicians, the Romans, the British, the Chinese, the Americans and others have all triumphed over other cultures as much through their traders and their business people as through their military might. As the Soviet version of communism found out, if you suppress those who wish to do their own thing in the world of business then economic failure will follow. The latest Chinese version of communism now states loud and clear that “you can’t have communism until everyone is affluent” and so they foster and promote the business people in their country. Maybe that is a form of communism that we should embrace? Maybe not.

Sometime ago the small business community in Australia and all the people in that community reached a low point. On that day (Thursday 28 October 2010) it was confirmed to me that we had ceased to exist in any real sense as people.

In the morning of that day I met with some representatives from the federal Department of Health to discuss the involvement of small business in their healthy workers program “Promoting Good Health at Work”. An excellent program in which they were having trouble getting small business involved. I explained how to do that and then we discussed the merits of the program. The program would pick up everyone in the workplaces of Australia. I pointed out that this program missed 2.5 million people – the self employed. There was no mention of the self employed except as an employer who would be responsible for other people’s health. A major oversight that was corrected when the “Joint Statement” from the government and from industry and employee representatives was released. But an health oversight of the needs of 2.5 million people needs to be investigated. The senior bureaucrat I was dealing with was appalled and asked ‘why did we miss these people?” An excellent question. A question even more compelling when you realise that the advisory group for this program included people from the ACTU, Australian Industry Group, the Australian Chamber of Commerce and Industry and the Business Council of Australia.

That afternoon I received a phone call from the Human Rights Commission.  A staff member informed me that the HRC had a program aimed at helping workers with mental health problems and that they were having difficulty getting small businesses involved. I then provided advice and information on how to do that and I asked “If an employer has a mental health problem, is this an issue for the Human Rights Commission?” There was silence at the end of the phone and then she replied that she would have to check. Is there any other answer to that question besides ‘yes’?

So those two stories highlight the fact that we had lost our humanity, we are employers who have responsibilities, we are not people with health needs like anyone else. In more recent days we have much better engagement on these issues and for example I am in frequent contact with Allan Fels, the Chair of Australia’s Mental Health Commission, who spoke here last week on the issue of mental health. But please remember these two stories. They help reinforce the fact that we, in small business, are people that have been relegated by some if not many to tier two of humanity. That disturbing fact underpins everything we say and all our policies.

And let’s consider the small business community. We make up 96% of all businesses. There are some 2.5 million of us, 1 million of us employ some 5 million other people. That is at least 7.5 million people who rely on small businesses for their living. There are some 800,000 people running their business from home, there are another 900,000 independent contractors making their living in other peoples workplaces. We are the majority, we are the innovators, the risk takers, the people who provide the culture of many communities and we are also forgotten as people, we are the prey of the big landlords and the victims of some appalling competition policy. And because people in a small workplace are so close then if we are victims of neglect and a lack of care then so are our employees, our co workers, the people who we work with day in and day out.

Ladies and gentlemen the various business systems in Australia are designed for the 4% of businesses, for the big end of town with experts and time and resources and money. The tax system, the corporate system, the financial system, most compliance demands, competition policy, contract law, OH&S and the workplace relations system are all about the big end.

I know today is about workplace relations but let’s look at some example of how things are designed for big business and not for the majority, small business people.

There are some 700,000 corporations in Australia that are small. The great majority of corporations have one or maybe two shareholders. I have a corporation of which I am the only shareholder, many of you in the audience will also be small corporations. But the process and communications imposed by government are based on the needs and behaviour of large business. For example by corporate law I have to have a meeting with myself every year. I have to send myself a letter 21 days prior to that meeting and I have to inform myself that I will attend that meeting. What if I can’t attend? Can I send proxy? If I nominate myself for chair who will second that nomination. And so it goes on. This is obviously silly and no one has been fined, that I know of, for not meeting with themselves but it does highlight the fact that designers of policy and process do not get the fact that we are people and we are the majority.

We also have an issue around sexual harassment. There is a thing called vicarious liability which means an employer can be responsible for sexual harassment in the workplace even though they have no part in that activity. The rationale is that they have developed a workplace where it can occur. So we have a situation where a woman, who is an employer, can be sexually harassed and then fined for letting that occur. Stupid ill-considered policy.

So now we come to the current WPR system. The system is designed for paymasters and experts.
The proof of this is found in many places – one excellent example is a recent “Retail Campaign” conducted by the Fair Work Ombudsman. This found that some 26% of retailers are non compliant with the Fairwork ACT. That means that the system has failed or perhaps natural selection picks incompetents to get into retail? Maybe it means the retail sector is under stress?
So, to help inform my comments and the council’s policies, I asked the FWO to provide a break down of the size of businesses that were not compliant, but they had not kept data on the size of the businesses – an odd thing to do? How do you plan an education campaign when you don’t know the size of the businesses? The FWO will now collect data on business size but the fact that they didn’t collect that data in the first place shows a lack of understanding of the difference between big and small and the difference between a business with a paymaster and one without a paymaster.

Further analysis of the FWO data shows that many sectors have between 22% and even 34% non compliance with the Fairwork ACT. But when you look at the performance of Department stores we find that they have non compliance of 2.5% – proving my point that the system is designed for paymasters – we need a system designed for the small workplace.

Also under the current system, and any of the previous systems, it is almost impossible to employ your very first employee legally. Especially if you are in need of help now not in a months time. You will have to get your head around pay rates, tax rates, award conditions and superannuation (I’ll come back to superannuation – a very unnecessary and rorted collection system that makes 1 million people slaves of the very inefficient industry superannuation funds) But back to employing your first person – there is an example of a couple who ran a courier business here in the ACT had the need to employ someone. One partner had damaged his arm and needed to employ someone for a week to help out. They needed to make this decision quickly and as a result the only way they could fix the problem was to do a cashie, as there was no other way of achieving this. This couple had a management problem – they needed a hand moving boxes – and they solved that problem except that they had no option but to break all the rules. When I asked this man what worried him he stated it was the lack of workers compensation, he was very worried about injury. Between the two of us we designed a potential system where he could have called a 1800 number and got instant coverage for workers compensation, as he said “I have a mobile phone, I have a credit card and I have an ABN, this should be easy”. So let’s design a system around the needs of people like him and not around experts. A 1800 number for instant workers compensation and another 1800 number when you need to employ your first person. Simple solutions if you focus on the real issues.

We are also proposing a small business award based on size – why? Let’s listen to the FWO information line.

  • Lead in is 30 sec then we get to the point where we can press some buttons.
  • Press 1 for information on public holidays
  • Press 2 for information on taxation, superannuation or group certificates
  • Press 3 if you feel you have been unfairly dismissed
  • Press 4 if you are employee
  • Press 5 if you are an employer

The system fails the small workplace due to different choice for employees and employers. Why would an employer potentially have different advice? Isn’t this dangerous? Doesn’t this set up potential for confusion and conflict? What if there are two people in the workplace, one hits 4 and the other hits 5 – the system has failed.

So we press 5 and get three choices I will press 3

We hear: This service is managed by the FWO, information provided is not a substitute for legal advice and relies on the accuracy and completeness of information that you provide, this could be affected by changing circumstances or changes to relevant policies, laws or judicial interpretation.
The FWO cannot guarantee that what it is saying is right and you need to seek legal advice. What if you want to employ someone for one day, you need to spend between $800 and $5,000 getting legal advice over pay of perhaps $300. The system has failed.

It continues: We will use information captured to fulfil statutory obligations.
This means that this could be entrapment – it is a threat. The word ‘captured’ sums up this information line – the language of conflict, the threats, the lack of focus of demands on the decision maker and a lack of understanding.

Also if this was truly focused on the employer, the one who is most time poor, we wouldn’t be last in the list, we wouldn’t have to wait the longest to get the information.

So why can they not give a guaranteed wage and why do they have to threaten the employer? Nicholas Wilson, the FWO, and his team are not stupid, indeed Mr Wilson has changed the culture of the FWO from a belligerent employer hating mob of lefties to more professional engaging public servants, so what stops them from providing guaranteed information?

Basically, as it says in the recorded message, they cannot guarantee that you are describing things properly. For example in my shop if I were to ring the FWO and describe my shop as a ‘bookshop’ they would give me an amount I should pay, but if 9 months later an FWO officer visited my shop they may decide that I am not a bookshop but a wine bar, or a coffee shop, or maybe a live music venue or something else. They will tell me what I am.  As a result they may force me to give back pay to my fellow workers. The system has failed everybody in the small workplace. The system has also not kept up with the pace of change.

Interestingly they may not really care if the advice they gave me was wrong and that I overpaid my fellow workers. Who pays me back the money I have lost due to poor advice?

We need a system for the small workplace. A system where everyone in the workplace can get guaranteed advice and where conflict is minimised. A Small Business Award based on size is one answer. That way when an employee or an employer calls the FWO number the officer will ask how many employees? If the answer is less than 20 then we can guarantee a wage rate – doesn’t matter what the people do we will know the minimum wage. Nice simple answer. And remember those in the system hate simplicity, they want complexity and drama and lock outs and strikes and conflict and agreements and negotiations and unions and industry groups and ideology and…, rubbish. Make it simple for small business – give us a separate system and let the others fight among themselves while we get on with it.

Next let’s look at the effect of competition policy and contract law on the small workplace.
At the recent Economic Forum in Brisbane I was on a panel with Louise Tarrant from United Voice, the union that includes cleaners as members. I mentioned a couple of things in my presentation, one being the idea of a small business award and the other being our concerns about competition policy and the behaviour of the big landlords such as Westfields. In her response Louise, not surprisingly, disagreed with the idea of s small business award but highlighted that often when her members are paid poorly or inappropriately that it is not necessarily the cleaning contractor who is the problem, it is actually the behaviour of organisations like Westfields and Stocklands etc, who force such poor onerous contracts onto small businesses that they are themselves forced to pay lousy wages or provide poor conditions to workers. Why can Westfields and their ilk behave like this? Because competition policy and contract law of the last two decades has been controlled and manipulated by the big end of town to the point where they are protected from litigation for breaches of contracts and where they have established local monopolies on retail space. There are not many places a person can clean anymore that isn’t owned by the politburo of big landlords who, in partnership with the competition destroying, boring, duopoly of Coles and Woolworths, have control of our town centres and can and are destroying our small and medium manufacturing industry and the natural supply chains that have existed around Australia for a long time.

This has reached the point where even FWO has taken Coles to court. They are arguing that the contract Coles imposed on a contractor in Adelaide was so onerous that there was no option for the contractor but to be in breach of the Fairwork ACT. I wish FWO good luck. We need a change in competition policy and contract law if we are going to have fair workplaces where everyone, including the owner of the workplace, gets a fair return for a fair days work.

There is also a negative effect of compliance on the small workplace.

Ladies and gentlemen the small workplace in Australia is full of people working together to make a living. When you go into business in Australia we have to do several things. We will have to collect GST and fill out our BAS and send the GST collected to the government. When we employ someone we have to collect PAYG and send that to the govt. We must have workers compensation and a safe workplace. That is what we have to do. That is our give to society. We are the only people in the tax system who don’t get paid,l who do it in our own time. So why do governments and their agencies and the unions make it so hard to do these things? They also ask us to collect superannuation and send it to private sector multi billion dollar financial institutions, we must do that for nothing in our time and we will get fined if we don’t.

We have become the conduit for Paid Parental Leave. There are women employers out there who are asked to spend less time with their families so that another woman can spend more time with hers. We have to try to understand OH&S policy that is written for experts; the HRC asks us to read and understand 5 acts of parliament; local government regulators often have no idea on how to communicate with small business people and they create their own problems.

Let’s have a system or at least an award for the majority, for the 2.5 million small business people and their 5 million co workers. Let’s focus on the fact that a small business employer is a person with no more capacity than any person can have, let’s make it so that everyone in the small workplace can make a living without confusion and unnecessary stress.

Thank you.

View the full video (56 mins, ABC)

About the author

Peter Strong

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