They are making house prices go up....
http://www.businessspectator.com.au...surplus-pd20110510-GQBHY?OpenDocument&src=kgb
more here
http://www.businessspectator.com.au...surplus-pd20110510-GQBHY?OpenDocument&src=kgb
labor are doing something about house prices
- Thread starter BV
- Start date
Rubbish BV,
Excellent!! Maybe this will stop the cash payments and other dodgy deals that a rife in the building industry.
Why should this be a problem anyway if as a contractor you maintain your books reasonable well. I would think it's the basic of any small business. Record money coming in, money going out. The industry is worried because of the large cash economy that exists.
I say crack down of all the tradies. Finally.
Already exists for IT contractors. If building contractors are getting special treatment, then they should rightly be brought into line with other contractors in other industries.
Excellent!! Maybe this will stop the cash payments and other dodgy deals that a rife in the building industry.
Why should this be a problem anyway if as a contractor you maintain your books reasonable well. I would think it's the basic of any small business. Record money coming in, money going out. The industry is worried because of the large cash economy that exists.
I say crack down of all the tradies. Finally.
Already exists for IT contractors. If building contractors are getting special treatment, then they should rightly be brought into line with other contractors in other industries.
Sorry what?
Cashies? Unless you like being unable to prove serviceability, cashies are just too hard to operate with.
It's too hard to explain away deductions from the pty ltd or the trust to the accountants.
Heres a scenario that happens to me a lot.
"how much for cash?"
"I don't care how you pay"
"nah mate, I mean is there any discount for paying cash?"
"I still have to pay GST, so why would there be? Sorry, I don't understand"
"uh....can you do a better price?"
"mate that's the cheapest price you'll get, but you're welcome to shop it around"
"how much for cash?
Cashies? Unless you like being unable to prove serviceability, cashies are just too hard to operate with.
It's too hard to explain away deductions from the pty ltd or the trust to the accountants.
Heres a scenario that happens to me a lot.
"how much for cash?"
"I don't care how you pay"
"nah mate, I mean is there any discount for paying cash?"
"I still have to pay GST, so why would there be? Sorry, I don't understand"
"uh....can you do a better price?"
"mate that's the cheapest price you'll get, but you're welcome to shop it around"
"how much for cash?
Excellent!! Maybe this will stop the cash payments and other dodgy deals that a rife in the building industry.
Why should this be a problem anyway if as a contractor you maintain your books reasonable well..
To me it looks like operating costs will increase which means they'll have to charge more to stay afloat.
Compliance is a huge cost which often makes a business uncompetitive.
We will all pay for this.
To me it sounds like a beatup story. If your paying contractors, you would already be recording the information somewhere in order to claim it as a business expense, which you already report in some way to the government currently.
May get rid off all the dodgy contractor and tradies out there, or those that rort the system with cash payments.
The building and repair industry is rife with rorting and overcharging. From pink batts, to BERS.
Good move.
I doubt it will have any impact on property prices BV.
I hope not, the cash industry won't stop doing business.
Its the compliance cost of legit businesses I'm worried about.
If it wasn't bad enough with safety gone mad......
Anyone who thinks that this is a good idea is a complete and utter fool. The only ones who will benefit from this are the government and larger businesses who already have excellent record keeping and who will also benefit from hiring their former competitors as employees.
We have seen time and time again, in every industry, that deregulation brings prices down. What that troll is proposing is precisely the opposite - it is reregulating an industry that has nothing wrong with it except the usual fly-by-nighters and dodgy operators who operate in every industry. The only reason that contractors/tradies get paid well these days is simple supply and demand, coupled with every ballooning value adding that comes along with a housing bubble.
If this comes in, the big guys will have a competitive advantage and prosper at the expense of their smaller competition. Present contractors will be forced to become employees, likely working for their former competition.
Prices will not come down. Do you really think that larger companies are going to drop their prices in an environment of less competition? Riiiiiight. All that will happen is a fattening of their bottom line.
Simultaneously, all of those middle class contractors who buy lots of IPs of their own as well as spend their money on ancilliary industries won't be buying those houses, putting downward pressure on housing through reduction in demand. Simultaneously, profits for all of those middle class ancilliary businesses will also decline, meaning that their owners wont be able to buy houses/spend money either - and so on and on the spiral goes as this stupid policy hamstrings actual productive elements of the economy.
The rich will get richer, and the poor will get poorer as the middle class is eviscerated.
Oh, and this baloney about it reducing the size of the cash economy - what do you think is going to happen when a buyer/client is offered the choice between an on the books price that is further inflated by paperwork, or a cash price whereby the price differential is even greater than it is today?
I must commend the labour government though, they are certainly going to bring house prices down.
...by crashing the economy.
We have seen time and time again, in every industry, that deregulation brings prices down. What that troll is proposing is precisely the opposite - it is reregulating an industry that has nothing wrong with it except the usual fly-by-nighters and dodgy operators who operate in every industry. The only reason that contractors/tradies get paid well these days is simple supply and demand, coupled with every ballooning value adding that comes along with a housing bubble.
If this comes in, the big guys will have a competitive advantage and prosper at the expense of their smaller competition. Present contractors will be forced to become employees, likely working for their former competition.
Prices will not come down. Do you really think that larger companies are going to drop their prices in an environment of less competition? Riiiiiight. All that will happen is a fattening of their bottom line.
Simultaneously, all of those middle class contractors who buy lots of IPs of their own as well as spend their money on ancilliary industries won't be buying those houses, putting downward pressure on housing through reduction in demand. Simultaneously, profits for all of those middle class ancilliary businesses will also decline, meaning that their owners wont be able to buy houses/spend money either - and so on and on the spiral goes as this stupid policy hamstrings actual productive elements of the economy.
The rich will get richer, and the poor will get poorer as the middle class is eviscerated.
Oh, and this baloney about it reducing the size of the cash economy - what do you think is going to happen when a buyer/client is offered the choice between an on the books price that is further inflated by paperwork, or a cash price whereby the price differential is even greater than it is today?
I must commend the labour government though, they are certainly going to bring house prices down.
...by crashing the economy.
On top of big employers prospering it is not going to hurt unions either...
Unions do not like ABN employees even if the employer pays super, insurance etc because the arrangement is outside the fair work act (of course you must pay enought that it is not sham contracting, i.e. trying to save money etc.
For the most part good workers like the extra coin they can get on ABN and prefer the flexibility it offers them with respect to buying the flash work van etc.
I see the unions as the vested interest behind this one.
Unions do not like ABN employees even if the employer pays super, insurance etc because the arrangement is outside the fair work act (of course you must pay enought that it is not sham contracting, i.e. trying to save money etc.
For the most part good workers like the extra coin they can get on ABN and prefer the flexibility it offers them with respect to buying the flash work van etc.
I see the unions as the vested interest behind this one.
saw through it immediately.
There's probably more than one hand in this
in it.....on it.....potayto potahto...
Championship post Ocean Architect, more meddling from nanny, more jobs for the unproductive sector, very Australian.
Same here... my answer:
"It's all money aint it...? $1000 cash is the same as $1000 by cheque...maybe I could offer you the cheque deposit fee of 0.50cents off for cash... that alright...?"
I too can't see what the fuss is about unless the contractor is indeed running illegit....
This is bad news for free enterprise in Australia.
If you have a trade/skill and wish to pursue business on your own account as a contractor (incorporated or not), and be subject to the risks and legislation which apply to those in business, then you should be able to.
The tax laws (cash economy issue and tax deduction issues) are a completely separate set of issues, and let's not be fooled, this has nothing to do with it. This is a blatant Labor/Union move which will hurt business and the economy for the benefit of a few.
If you have a trade/skill and wish to pursue business on your own account as a contractor (incorporated or not), and be subject to the risks and legislation which apply to those in business, then you should be able to.
The tax laws (cash economy issue and tax deduction issues) are a completely separate set of issues, and let's not be fooled, this has nothing to do with it. This is a blatant Labor/Union move which will hurt business and the economy for the benefit of a few.
Look up the industrial relations modern awards for the building and construction industry.
Then overlay this with any EBA a company may have signed up to with a union.
They have a squillion different bonuses, schemes redundancy trusts etc to pay into.
Much easier to say Ill pay you $50.00 an hour give me an invoice... Possibly have to pay super and workers comp on top if they are ABN not pty ltd but that is a small price to pay compared to all the other guff. Most workers are more than happy to take all the pay up front and to hell with the EBA too. Guess who would rather them covered by the union EBA? I just wish companies paid people fairly on ABN's always. If they all paid their full costs to administer the other system on the EBA, i.e. about $45.00 per hour plus super plus payroll tax (cost only not a benifit) plus long service leave levy you would find the unions would have a hard time drumming up business then...
It isn't just the paperwork. What they want to do is say that if you are a contractor doing more than 80% of your entire workload for one person/company, then you are no longer a contractor and are an employee of that person/company, which means that they have to pay your super, give you employee benefits etc. In addition, they want to stop contractors from subcontracting works out to other contractors, which means that only companies with the ability to do everything in a contract from top to bottom will be able to take on contracts.
The bottom line is that the government doesn't like the current mishmash of contracts/subcontracts/subsubcontracts that takes place within the industry - it wants large entities that are in effect one stop shops to do the work for clients, with all of the people doing the work being employees of those entities.
It really begs the question - why? Why "fix" what is not broken? What is wrong with having small businesses out there (1 man crews) where the boss is the worker on the tools, operating as a business and getting business entitlements? The system that we have is more efficient, because the guy on the tools is more likely to know what is involved in the job and price it properly in the first place, and it also means that a single person is taking on multiple roles, maximising their productivity.
Anyone who has worked for a large building company would know this - the labourers/skilled workers rock up, and if the foreman isn't there, they bludge around and have a smoke. When they're finished a certain task and there isn't anyone around to give them the next task/materials, they again have a bludge and wait around, while a foreman who isn't the owner really doesn't care and does a horrible job of coordinating labour/materials.
Compare that to the 1-3 man outfits where the guy on the tools is the one with the chequebook, knows exactly what materials are there, what work needs to be done, how to do it, and works flat out because it's his time and his money being wasted.
So yes, be cautious of this "oh, it's just some paperwork" stuff. That's phase one. Then it's "well, we have analysed the data, and xyz person is actually your employee because he does 81% of your work - you need to pay his super". Then it's "We have again analysed your data, and we have decided that any comany with more than 4 employees must have xyz ridiculous provisions included for xyz ridiculous reason" on and on until everyone says "bugger it" and leaves the industry. Proof of this kind of idiocy is all over the place - every worked for a big company where you MUST wear a hard hat on all sites? Do you know how ridiculous it looks when you're wearing a hard hat on a flat piece of land with no buildings on it doing surveying or checking the water meter? And if you don't because you have common sense, you get fired "because that's the rules"?
I've seen it. I didn't know whether to laugh, cry, or run the foreman over for being a twit
I am not in payroll, but;
I think you have to pay their super even earlier than the 80/20 rule.
they become employee contractors as soon as you are paying them for time not a job and a few other rules, 80/20 more a rule around taxation I think rather than super.
ditto for payroll tax.
Thats why I know this has nothing to do with tax or super. Its all about unions. Our ABNrs get more super than the employees as they get it on base pay which is higher. Travel allowance etc that employees get does not attract super.
Agree 100% with you though OA about the its not just paperwork. IMO It's all about preventing bilateral relationships between workers and bosses. The government wants that third party at the table whether the other two want him there or not!
I think you have to pay their super even earlier than the 80/20 rule.
they become employee contractors as soon as you are paying them for time not a job and a few other rules, 80/20 more a rule around taxation I think rather than super.
ditto for payroll tax.
Thats why I know this has nothing to do with tax or super. Its all about unions. Our ABNrs get more super than the employees as they get it on base pay which is higher. Travel allowance etc that employees get does not attract super.
Agree 100% with you though OA about the its not just paperwork. IMO It's all about preventing bilateral relationships between workers and bosses. The government wants that third party at the table whether the other two want him there or not!
I didn't know that, thankyou. I'll polish up my knowledge on the specifics (I've been meaning to, but you know how it is - too much to learn, not enough hours in the day
)Similar threads
