Rushed changes have small businesses wondering if govt cares

By Luke Achterstraat
Updated December 11 2023 - 2:06pm, first published 5:30am

Significant changes affecting Australian workplaces were passed into law on the final sitting day of Parliament last week, despite a Senate inquiry still having weeks to run.

The Closing Loopholes Bill is the most significant rewrite of industrial relations policy in recent memory with changes for casuals, contractors, truckers, labour hire, union delegates, tradies and self-employed Australians, just to name a few.

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To this end, the Senate crossbench was wise to demand the government split the bill and allow for an inquiry. The government should have gone further and split the package into bite-sized chunks given its complex components.

Employers feel betrayed that significant changes have been made law before the Senate inquiry had even concluded. The inquiry received almost 200 submissions, and a thorough questioning of the employment department was expected in the new year.

Whilst common ground existed on issues such as first responders, PTSD and silicosis, an eleventh-hour secret deal also bundled through radical changes to the contentious issues of labour hire and union access.

Industrial relations is complex at the best of times, let alone when a government is trying to ram through an 800-page package that impacts the whole labour market.

For example, the labour hire provisions passed last week will capture many more business than just the frequently cited examples of Qantas and BHP.

The Fair Work Commission will be empowered to enter commercial arrangements between businesses (with the exemption for small businesses capped at a headcount of 15 employees).

For example, a hospitality business with 17 employees might win a contract to provide catering services for a major event and therefore require the use of labour hire to engage additional workers on a one-off basis.

Workplace Relations Minister Tony Burke. Picture by Sitthixay Ditthavong
Workplace Relations Minister Tony Burke. Picture by Sitthixay Ditthavong

Under the change, these externally engaged workers must be provided the same bonuses, loadings, allowances and overtime as comparable in-house staff who have potentially been with the host company for over a decade.

The prospect of needing to ensure many non-monetary award obligations plus the "full" rate of pay that the "host" pays is itself a complex exercise for a small firm.

Moving beyond labour hire it is particularly disappointing that repeated calls for a thorough impact statement on the small business consequences of the bill have not heeded. The deal struck last week even included new amendments that had not been sighted by employers, let alone consulted on.

Following the rush job, some union leaders told businesses they should suck it up as they "don't feel the hardships many Australians are feeling right now."

On the contrary, 98 per cent of all businesses are small and feel hardships every day.

Small businesses are typically self-funded by someone with a mortgage and are feeling the pinch against the backdrop of rising energy, rent, borrowing and insurance costs. Most small business owners are still paying themselves below the average wage to keep the lights on for their workers and customers.

There is major concern that the IR changes still up for consideration - now known as Closing Loopholes 2 - will only create more complexity at a time when small business can least withstand it.

Data from the small business ombudsman indicates that 43 per cent of small businesses are not breaking even: that is more than 1 million small firms in Australia hanging in the balance.

Radical changes remain on foot including throwing out the window existing definitions that apply to over 3.5 million Australian casuals and contractors and altering the very definition of employment itself. Small businesses do not typically have specialist HR support and yet the new definition of casuals is three-pages long, contains over a dozen tests and requires an ongoing assessment.


Many employees including students and carers will face the prospect of losing casual work and its attractive 25 per cent loading.

Meanwhile, over 1.1 million self-employed Australians such as builders, tilers, scaffolders, gardeners but also freelance web designers face losing their right to be their own boss.

The IR changes and their flawed process are running roughshod over the government's election commitment to make life easier for small business.

Small businesses are now openly querying whether the government understands or even cares about pushing additional complexity onto them in a cost-of-living crisis. And in terms of process, the next time the government agrees to a Senate inquiry should this be taken seriously or with a footnote indicating it might be guillotined?

Whilst dealmaking is a part of politics, there needs to be greater consultation with those impacted and fulfilment of democratic procedures such as inquiries, particularly when the jobs of the future are at stake.

After all it is private enterprise that employs the overwhelming majority of Australians, not politicians in Canberra.

Our IR system is now more complex than ever.

Small businesses do not demand the world from government but at least expect honesty about how they will be impacted. They seek a clear and workable rule book that promotes compliance, productivity and reward for their staff.

Moving forward we must do better than eleventh-hour, behind-closed-doors deals that evoke political drama TV in their disregard for procedure and scrutiny.

Small businesses will be watching closely.

  • Luke Achterstraat is the CEO of the Council of Small Business Organisations Australia. He has advised two federal government ministers and appeared before parliamentary inquiries on behalf of both federal and state industry groups.

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