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Event: Brian Seidler interview with Amanda Stoker, Sky News
Date: Monday, 22 May 2023, 7.05pm AEST
Speakers: Amanda Stoker, host Sky News The Bolt Report; Denita Wawn CEO Master Builders Australia
Topics: industrial relations, building and construction, ‘employee-like’
E&OE
Amanda Stoker, host Sky News The Bolt Report: In other news, Labor are polishing up their second wave of industrial relations reforms. As they seek to turn back the economic clock at least back to the 1970s. It looks as though Labor intend to treat independent contractors, small businesses and self-employed people as though they are employees. Their sales pitch ‘same job, same pay’. It makes for a catchy TV grab but here’s the thing. Sameness actually stifles productivity. When we take away the ability of the 264,000 self-employed tradies, for example, to run a business their own way, set their prices and occur their own costs on their own terms, work their own hours and do things according to their own creativity, we take away the capacity for innovation. And without the ability to try and do things differently, not only do you take away the incentive for people to start a business that might one day become an employer too, we also take away the best source of innovation in the market. If you want to know why it is that the start-up businesses get the edge against the established big players, it’s because their lean, flexible and able to innovate. The big employers might have some advantages but they’re usually slow, bureaucratic and weighed down by their own size. Labor’s policy here would take away every advantage a small player has in the market. That would make them and the aspirations they represent an endangered species. It’s not just relevant to the building industry. The Minerals Council has observed that it would discourage businesses from engaging self-employed tradespeople, engineers, drivers, and other professionals. The trucking industry would be affected too. So where does this land with fewer people innovating? Well, that means lower productivity in the industries that use self-employed people and contractors. It means a huge increase in compliance costs for those who decide to try and persist to make it work and it means future generations will be putting striking out on their own just in the too hard basket. And instead have no option other than life as an employee. Now, that’s not bad if that’s what you want but for most people who want to be their own boss or to start a business on their own, that’s not a good thing. Now why does Labor want that? Well, it’s pretty simple. Because big employers unionise. Self-employed people and small businesses generally tell the unions to get lost because they know they do more harm than good. And that’s precisely why Labor and the unions are determined to make contractors and small businesses extinct. Even for a citizen who is an employee in an unaffected industry in an unaffected role, consider this: workforce shortages in mining and construction with lower productivity across the economy are rocket fuel for inflation. Think things are expensive now? Just wait until Labor are finished with their industrial relations reforms. So let’s explore this further with Master Builders NSW Executive Director Brian Seidler. Brian, thank you for your time. Can you please explain to our viewers just exactly what it would mean for self-employed tradies if they were brought under these proposed IR reforms?
Brian Seidler, Executive Director Master Builders Association of NSW: Well, I’ll put it in some context. We’re now talking about one in five workers in our industry. So, as you identified, there’s about 260,000 individuals in our industry who work independently, who actually respond to the needs of our industry and that’s flexibility. Without flexibility, I must say, that during the pandemic and during COVID-19, if we did not have the flexibility from people in the industry we would have not been able to achieve where the economy is now. And so, one in five or 260,000 individuals would have no direction and indeed, I think, the productivity of Australia would dramatically suffer.
Amanda: So Master Builders Australia has put a submission to the Department of Workplace Relations. It says among other things ‘independent contractors should have the right to choose the hours they work, what projects they work on and be allowed to negotiate their own fees and conditions’. Now that shouldn’t be a controversial proposition if you ask me. But given there are so many self-employed tradies in this country. That’s a lot of people whose rights to be self-employed and work as a contractor that would be eroded. What is this going to mean in practice for those people who aspire to run a business of their own? Be their own boss?
Brian: Let’s suggest that those individuals find themselves in an employment relationship rather than an independent contracting relationship. The cost of labour will absolutely increase. There is no argument about that. We have a situation where an entrepreneurial position, the basis of which the building and construction industry has been built for some 150 years has all been on entrepreneurial and aspirational independence. And now to bring those people under a contract of employment, productivity will suffer and the cost of labour particularly in the residential sector will start to increase.
Amanda: It strikes me that this is repeating all of the mistakes that have been made in relation to the deeming of people who are independent contractors as employees in the occupational health and safety space. But not content with making the error in one place they’ve decided to expand it. The Government has said that this second wave of IR reforms is set to focus on the rights of gig-economy workers. But how will the definition of gig economy be drawn?
Brian: Yeah, it’s a really good question. We’re finding that we were on the understanding that construction and other industries that have enjoyed the individual and entrepreneurial approach would be excluded from, I guess, the classification or definition of the gig economy. But that is certainly not the case as it stands today. And we are seeking clarification but there has been no clarification at this point.
Amanda: It’s pretty troubling. What’s been the response from the Government so far? I mean, you said you haven’t heard much. But has there been a quality consultation process?
Brian: Look, the consultation paper, this is the second tranche of IR reforms. It came out about three weeks ago and it wasn’t answered in the discussion paper. In fact, the definition of an independent contractor and what it actually meant really caused us at Master Builders a lot of concern and that has not been clarified at this point.
Amanda: Okay. All of this comes right as the building and construction industry is, let’s face it, struggling. There’s a lot of uncertainty right now with rising interest rates, rising costs of building and the effect that both of those things can have on the confidence of building leading to concern about how many new starts there will be in terms of new building projects. These new changes could just compound all of those issues more. Is that your expectation?
Brian: That’s certainly our expectation but if there’s no clarity in who is an employer, who is an individual contractor there will be hesitation absolutely. Particularly the mums and dads and the residential sector where a lot of our independent contractors live and work. And so if suddenly if they could be roped in an exercise that you are suddenly considered or deemed an employee and look your comments earlier about a unionised workforce, it’s no secret that for decades the union movement has wanted to get into areas such as the residential sector. And this would be the quite easy way to do that if suddenly subcontractors or independent contractors are deemed employees.
Amanda: Yeah. It’s just that what troubles me is that it seems Labor would rather kill the sector as a whole in order to unionise it rather than accept that people should be able to live according to their own terms. It’s not just the construction industry that’s up in arms about this. The Minerals Council of Australia has also hit out at the proposal. That’s two of our biggest industries now standing together against the Government here. That’s a pretty powerful show of concern. What will happen if this attempt to turn back the IR clock is ultimately pushed through across both sectors?
Brian: Well it’s quite clear that we are returning with the whole IR agenda back decades to where it was in the 70s and certainly the 80s. And so, the one thing that you can rest assured that if this gains traction and we see the removal of independents and independent contractors across Australia that the cost of doing business in the building and construction industry will get higher. That’s one thing that the cost of labour will get higher. The cost of building homes will get higher. And of course, the cost of doing business will get higher.
Amanda: Well, I’m a kid who grew up around the residential building industry with parents who were one of those contracting trades and it was for them an instrument of great aspiration and what’s troubling is that between the red tape, the onerous OH&S deeming laws in relation to contractors and now this prospect we’re going to find trades leaving the sector in droves in a way that I think has not been well thought through. Thank you so much Brian Seidler for your time. Really appreciate your work on this important issue.
Media contact:
Dee Zegarac
National Director, Media & Public Affairs
0400 493 071 | dee.zegarac@masterbuilders.com.au