11 May 2011 – Robert Gottliebsen, writing in Business Spectator, has warned Australia’s one million contractors their businesses are in severe jeopardy.
He says the Federal Budget’s measures are only the first step in the government’s campaign to turn as many contractors into employees as they can, and widen the net into IT and many other areas.
The government’s plan would affect the building of the average house, or even the average home repair job.
“Currently the builder hires contractors who do most of the work. Very often they will contract to others. Under the government plan, every time a handyman pays a contractor or that contractor pays another contractor the government must be told how much has been paid,” he said.
“It will also extend to architects and engineers, who mostly work as contractors. If IT contractors work in the building industry, they would also be caught.
“We are talking about an enormous paper work burden on small contractors – many will find it impossible to operate. And then there will be paperwork mistakes, which will cause tax audits.
“When I tackled Treasury officials about the nightmare the budget will create for small operators in the home building and home repair industry, they replied that it was no different to what would happen if the contractor was employed.
“When you are running your own business, it is nothing like being employed. If home repairers and builders have to report every amount they pay to contractors, why not retailers, travel agents etc ?”.