It is a simple economic reality, when you increase the costs on businesses, someone always pays.
Either the small business owner absorbs the extra costs and profitability is eroded, or the costs are passed on to the consumers.
It is not a choice small business owners enjoy making. They will pass on costs as a last resort; often going without themselves to ensure during tough times their employees are paid, and their prices are competitive.
But the rubber band can only stretch so far.
This is the problem with the Albanese Government’s latest industrial relations upheaval, which it has strategically called the Closing Loopholes bill.
The bill doesn’t close loopholes. It closes businesses.
This bill is a complete rewriting of workplace law that captures any business that provides workers, services or skills to another company, roping in millions of Australian workers right across the economy, and ramping up the cost of doing business. It threatens the viability of casual work, and the 25 per cent casual loading that comes with such an arrangement. And it gives unions more powers than police to enter businesses without notice and view private financial documents.
It therefore increases the cost of living at a time when households are already feeling the pinch; already struggling to pay the mortgage and their monthly bills.
The government would have you believe that its Closing Loopholes legislation (which includes a so-called Same Job, Same Pay changes) is only a minor tinkering with the industrial relations system; that it only applies in “limited circumstances” aimed at one or two companies, and that the impact on consumers will be “minor”.
Such claims are a fantasy at best, and at worst misleading.
Perversely, these changes will particularly inflict pain on regional communities, where the connections between mining companies and the small businesses that support mining have long been strong and mutually beneficial.
Where vast numbers of service contractors, technical experts and skills companies not only service the mining sector, but wholly rely upon it.
Engineering firms, cleaners, catering companies, machinists, construction crews, specialised geologists. Self-employed drivers and crucial labor-hire firms.
This bill captures everyone, which means those contractors will be required to pay their employees the same full-rate of pay and entitlements, including bonuses and share entitlements, of a full-time worker in that host business.
No matter the experience, age or qualification level. An 18-year-old apprentice engineer with six-months experience, working alongside a 32-year-old engineer with 10 years experience? Same pay, if the work is considered the same.
Firstly, such a scenario shatters the Australian notion of a fair reward for hard work and experience.
But perhaps more importantly, it will be a burden that most small operators won’t be able to bear. It will crush them, making many contractors simply unviable.
Now take that scenario, and replicate it across all industries, in all regions, and you have a recipe for economic disaster. The pain will be felt right across the economy, whether you are a farmer, a barista, run your own construction company or hairdressing salon, consult on IT and technology.
The net goes wide and captures many.
Tania Constable
CEO, Minerals Council of Australia
