Melbourne prides itself on its cafe culture, vibrant laneways, quality restaurants, and marquee sporting events. This dynamic and cosmopolitan lifestyle that Melburnians enjoy owes much to the rise of flexible business models built around independent contracting and casual work arrangements, but it is under threat from the Andrews government’s proposals designed to restrict the sharing economy.
These proposals have received little attention, but if implemented would put services like food-delivery, ride-sharing, and letting handyman jobs through Airtasker at risk, for the sake of favouring the union agenda to move all Victorians into the award system. In particular, new laws would regulate if not eliminate key sections of the sharing economy, further restrict the labour-hire industry, and strike a blow at the hospitality industry through punitive laws covering so-called ‘wage theft’.
Most concerning is the promised inquiry into the ‘gig economy’, with the Premier justifying it with reference to ‘wages and conditions being offered to workers’, a phrase that effectively denies that participants are independent contractors. Framing the inquiry this way demonstrates the government’s opposition to participants enjoying the flexibility that comes with the sharing economy, and suggests any recommendations by the inquiry are pre-ordained.
For example, currently Uber drivers earn money from trips made and control their own hours and conditions. If the unions get their way, online platforms would be forced to directly employ workers, pay wages and dictate hours. This would destroy the business model that has revolutionised the way Melburnians move around the city, which created an alternative to the highly regulated taxi industry. It could also wipe out the food delivery services that are currently enjoyed by hundreds of thousands of busy Victorians, and which have expanded the opportunities for many entrepreneurial cafes and restaurants.
New labour hire laws secured by the government in 2018, set to come into effect next year, will add more red tape to the already beleaguered industry. The licensing system being introduced was justified by the actions of a few rogue firms, regarding offences which were already illegal. The issue could have been solved with better enforcement of existing laws, without burdening the industry with licensing fees and compliance costs. The regulations line up with the anti-labour hire views of the ACTU’s Sally McManus who has said: “you’ve got to take away the incentive for employers to use labour hire.”
Daniel Andrews has also promised to crack down on employers who are underpaying wages and entitlements with the introduction of new ‘wage theft’ laws. The eagerness to create new laws instead of enforcing the existing laws is concerning, especially when they would duplicate and possibly conflict with laws administered by the Fair Work Commission.
After its restoration by the Rudd/Gillard government the award system small businesses have to grapple with is fantastically complex, which makes errors virtually inevitable. While employees should be able to get back any underpayments, there should be no in-built assumption that every breach is ‘theft’. Threatening jail time and massive fines will further deter employers from taking on the casual or part-time employees needed to service the needs of our twenty-four-hour city. If we make compliance too hard and too risky for our world-class hospitality sector, Melbourne’s hard-earned reputation will be lost.
Should the Andrews government be returned, we will see reduced opportunities for those thousands of Victorians who have shown a preference to work flexibly and as independently as possible. The Liberal Party should put on record their opposition to these measures, and develop policy that will undo long-standing barriers to employment. Rather than buckling to the union movement’s self-interested demands, we need to foster a business environment that encourages innovation and opportunity and meets the needs of the lifestyle wanted by Victorians.
Kurt Wallace is a research fellow at the Institute of Public Affairs. His critique of the proposals for more regulation, “Protecting Flexibility in a Dynamic Economy” can be downloaded from ipa.org.au.
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