Charter of Contractual Fairness
On 1 July we launched our Charter of Contractual Fairness

We have heavily drawn the principles of contract fairness from the new consumer unfair contract protections laws. If it's fair for consumers, it's fair for small business people - the self-employed and independent contractors.

We are currently writing to Australian corporations asking them to commit to contract fairness in their dealings with small business people.
Election Face-off 2010
The federal election was held on on 21 August 2010. ICA was active in assessing the policies of the ALP and the Coalition. Here's our comparative summary of the parties' policies just before the election.
Tax burden: UK versus Australia
Just as the UK is moving toward more sensible small business (contractor) tax laws, in Australia we're having to defend the progress we've made.
Laughing lawyers
You'll be amazed by the 'slips' that some lawyers make in court.
Failure to fix unfair business contracts
ICA says "extend unfair contract protections for consumers to small business".

New laws:
Legislation #1 (March 2010)
Legislation #2 (June 2010)

Here's our summary of the situation.
How the legislation defines unfair contract terms.
Why small business people should have TPA protections from unfair contracts.
Industry/Retail super funds must come out
The Cooper Review into superannuation says the big funds are not disclosing enough and must be forced to do so. This is vital. See Chapter 4.

Here's why workers' money is at risk if disclosure is not enforced.
Look after your retirement
The Cooper Review of superannuation says Self Managed Super Funds are good and need little change to existing arrangements. This is welcome. See Chapter 8.

The Report also seems to have stopped the attack against SMSF's.
Stand Up for Your (Contract) Rights!
We're monitoring contracts in general and promoting good contracts in particular. For example:
Another bad contract (Jun 2010)
One of the worst contracts we've seen (Jan 2010)
'Tom' versus DEEWR (Nov 2009)
But a positive development from government
Ken Phillips comments
And some interesting discussions
Problems with Phoenix companies
Two ICA members' tell their stories
ATO information on reporting suspect activity.

Govt's attempts to do something:
ICA comment

Newspaper comment:
The Australian
The Age/Sydney Morning Herald
Business Spectator

What 'Tom' thinks
What 'Jim' thinks
Stop Sham Contracts!
ICA supports the prevention of sham contracts. We monitor what's happening with them:
One person's story
Successful FWO prosecution (Dec 2009)
Info from Fair Work Ombudsman (July 2009)
First sham contract prosecution: ICA summary
Make a complaint to FWO
Business Spectator article
Read the debate
Watching Global Economies
Watching the USA
The US economy appears to be in recession. At the very least, we're getting very mixed signals about what's happening. Click here for a rundown on some of the best links we've found.
Watching China
China has just passed Japan as the world's second largest economy. It could become the largest global economy by 2030. We're maintaining a watching brief on the Chinese economy here.
Watching Goldman Sachs
Rolling Stone magazine has blown the lid on Goldman Sachs:
Article 1 [July 2009]
Article 2 [April 2010]
Article 3 [May 2010]
Central Banks on Debt
Since mid-May, central banks have been worried about sovereign debt. Click here for a list of useful links and summaries.
What the Pessimists said (January 2010)
We've brought together some pessimistic views about economics and likely economic trends in 2010:
US toxic loans
'US as sick as Greece'
Ken Phillips's summary
An 'IMF' perspective
Predicting 2010
Government debt a giant ponzi scheme?


Click to enlarge.

Ken Phillips on the debt equation

Understanding "Us": Self-employed People
ICA is committed to quality research to understand self-employed people.

6 July 2010: We released a unique research report made possible by an unusual collaborative effort. The report shatters many preconceived beliefs about 'us'; small and micro-business people. We believe it has global implications.

Main points and commentary
Summary
Full report.

20 July 2010: Here's further research from Flying Solo:
Report Summary; Full report and from Kelly Services: Report. And here's a comparative chart of our own.

Australian military aircraft (JSF). Bad deal?
Australia's decision to buy the Joint Strike Fighter (JSF) as the backbone of our air defence is under attack. Is this a bad procurement and contract management stuff-up? We've summarised the arguments and included some useful videos.

We Oppose Workplace Bullying
ICA opposes attempts by construction unions to bully their way on to work sites. Here are the issues from 2010:
Overview
Union violence on Westgate
Unions make threats

Open Letter to the Prime Minister Seeking Clarification on the Government's Policy on Personal Services Income Tax Laws


The Hon. Kevin Rudd
Prime Minister
Parliament House Canberra

28 May 2010

Dear Prime Minister,

Re: Clarification of Personal Services income Tax

We seek your advice on the position of the government and the Australian Labor Party in relation to any proposed changes to the Personal Services Income tax laws.

In July 2007, Independent Contractors Australia asked the Federal ALP the following question:

    'The ALP supports the principles behind the alienation of personal services income legislation. Does this mean that the ALP supports the existing personal services income tax legislation or are changes proposed? If changes are proposed, what would these involve?'

The ALP replied (through the then shadow minister for small business, Dr Craig Emerson) 'No changes are proposed'. The ALP took this position to the 2007 election as an election promise (see Item 138). Since forming government in 2007, the government has not changed the PSI laws.

On 16 December 2009, however, Assistant Treasurer Senator Nick Sherry released a report of the Board of Taxation recommending numerous and substantial changes to the PSI laws. Those recommended changes are sweeping---they move way beyond that which is necessary to prevent alienation of personal services income and would significantly inhibit the capacity of self-employed people to conduct business. Senator Sherry submitted the recommendations to the Henry Review of Taxation with comments that can only be understood to be a strong endorsement of the Board of Taxation's position.

In early May 2009, your government released the report of the Henry Review into taxation. Recommendation 10 states:

    Consideration should be given to a revised regime to prevent the alienation of personal services income that would extend to all entities earning a significant proportion of their business income from the personal services of their owner-managers, whether in employee-like or non-employee-like cases. This regime may also apply an arm's length rule to deductions arising from payments to associates to ensure deductions reflect the value of services provided.

We note that Recommendation 10 is not one of the Henry Review recommendations that your government has rejected. Rather, it appears that your formal response to Recommendation 10 is to leave it in the 'for consideration' category. That is, the government may act on this or it may not. Can you confirm this or inform us of any other position you may have?

We wish to make it clear to you that we oppose any changes to the PSI laws as they currently stand. We made a submission to the Board of Taxation review explaining our position.

In summary:
  • The PSI laws have taken nearly a decade to settle down and there is finally a welcome level of legal certainty around them.
  • The laws are doing what they were intended to do---preventing the alienation of income. (We note that the Board of Taxation did not produce any evidence about or, it seems, even conduct research into, the effectiveness of the current laws.)
  • There is confusion and misinformation about the true nature of the PSI laws and their implications for small business people.
  • The government should engage in an education campaign to minimize confusion and maximize voluntary compliance.
As we are approaching an election this year, we request clarification about your government's position on the PSI laws. Your government's effective endorsement of the Board of Taxation report and the placing in policy 'limbo' of the Henry recommendation (Number 10) creates an environment of confusion and apprehension about your intent with the PSI laws after the 2010 federal election. Small business people need clarity on this matter.

To assist clarity, we seek a response to the following questions:
  • Does your government and the Federal Australian Labor Party recommit to the statement made in your 2007 election manifesto that 'The ALP supports the principles behind the alienation of personal services income legislation'. Further, that 'No changes are proposed' to the PSI laws?
  • If your government and the Federal Australian Labor Party cannot recommit to the retention of the existing PSI laws, what changes do you propose and when do you plan to implement such changes?

With thanks

Ken Phillips
Executive Director
Independent Contractors Australia

cc
Hon Dr Craig Emerson; Minister for Small Business, Independent Contractors and the Service Economy
Senator the Hon Nick Sherry; Minister for Superannuation and Corporate Law