Again the Office of State Revenue in NSW is auditing companies regarding their Payroll Tax obligations and so-called 'Sham' contracting being undertaken in an effort to avoid payment of Payroll Tax. The ATO is auditing companies for their compliance with Superannuation responsibilities. I think every other State will receive the same intensive review as NSW. Why is this all happening now?

Pretty simple really! The States are broke because they grew fat on the stamp duty rolling in from the property sales boom. When that dried up they had no contingency plans in place and were caught with their pants down. Every State government is equally guilty of this. Then, and at the same time, employers were facing constant downward pressure on pricing, including, and led by, those same State governments with the result that employers had no choice but to go to subcontracting to eliminate some of the overhead costs they were forced to carry.

Now, to the great discredit of the cleaning industry, the usual smart ass employers and sales people took things too far and we arrived at a situation where everybody was pricing jobs at stupidly low rates. They were then trying to employ people at marginal rates and, of course, getting flack from workers and the Union.

The people giving us the work were looking the other way and hoping nothing would happen. Well it has and they are every bit as culpable as the contractors and are faced with being responsible for huge back payments to 'employees’ who have been badly done over.

So now we have the Workplace Ombudsman getting involved because they have heard that the cleaning industry is paying way under award wages to 'employees'.

Can it get any worse?

Well, apart from closing the door or selling out cheap I can’t advise many contractors on where to go next.
I have tried to help many contractors with contracts, declarations, advice on maintaining paperwork properly etc, but many have taken no notice and are now looking for help. What did I say? Keep your paperwork up to date and you will be OK.

And, no well run cleaning company will buy your contracts cheaply or otherwise because they will get them for nothing when you shut up shop.

Contractors, its time to get your house in order. The economic slump will not hurt the industry anywhere near as badly as will the bad publicity when the various Government agencies start reporting the practices and rorts in the cleaning industry.

E. john@cleaningcontractors.com.au
W. www.cleaningcontractors.com.au

* According to Wikipedia, 'Rort' is a term used in Australia and New Zealand that is commonly related to politics, or, more generally, a financial impropriety, particularly relating to a government programme. The term was first recorded in 1919 and is a derivative of the older 'rorty' - a 19th century London slang word meaning 'fine; splendid; jolly; or boisterous'. The term is also used as a verb to mean the action of defrauding, (e.g. he rorted the system). Long in use in the New South Wales branch of the Australian Labour Party, where it typically referred to such practices as branch stacking, the term came into widespread use after the travel rorts scandal of 1997, in which a large number of Federal politicians were accused of misusing travel allowances. Perhaps it is a term we should reintroduce in the UK?