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Payroll tax change concerns

THE State Government’s plan to treat “employee-like” contractors as employees for payroll tax purposes threatens to open the home building sector to unionisation.

The Government intends to add “employee-like” or “labour-only” contractors to its payroll tax net from July 1, but has not revealed how it will define these labour-only contractors.

While the move is designed to broaden the tax take from business, both employer groups and unions believe it could have wider ramifications.

Due to its reliance on subcontractors, the home building industry has been largely union free for more than 50 years.

One industry concern is that the payroll tax burden will make it unattractive to employ subcontractors and force builders to take them on as employees. Once they are employees they will come under the WA Builders Award, which the CFMEU is a signatory to.

Legally defining subcontract-ors as employees, even for tax purposes, also could give unions such as the Construction Forestry Mining and Energy Union a way to enter the sector and try to “represent” sub-contractors defined as employees within the WA Industrial Relations Comm-ission.

Master Builders Association executive director Michael McLean said the WAIRC legislation did not allow unions to represent people over pay matters.

“But in other Labor-governed States the unions can,” he said.

The WAIRC legislation is being reviewed by the WA Government as part of its rewrite of WA’s industrial laws. Business News has been unable to confirm whether changes

to allow unions to argue payment issues within the commission are being con-sidered.

Housing Industry Association WA housing director Gavan Forster believes the payroll tax move could bring unions into the housing sector.

“We see it as a long-term problem. It’s a chink in the contracting system that we hold dear,” Mr Forster said.

A Chamber of Commerce and Industry spokesman said the payroll tax would encourage the unions.

“But it’s not something that will translate into unionism in the short-term. After all, there is no compulsory unionism in this State. The Chamber does not have any immediate concerns,” the spokesman said.

CFMEU WA secretary Kevin Reynolds refused to comment, as he had not caught up with the fine details of what the Government was proposing.

He did say the union’s industrial staff was working on it.

However, industry groups are hopeful the Government will consult with them before it puts its payroll tax legislation together.

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