Government gig economy crackdown


Denham Sadler
National Affairs Editor

The federal government is looking to crack down on workers in the gig economy, with plans to force big tech companies to hand over worker data to ensure they are paying tax.

On 23 January, Treasury released a 15-page discussion paper on a new sharing economy reporting regime, outlining how it plans to tackle the “black economy” and ensure those undertaking work in the gig economy are paying the right amount of tax.

The new plan is a crackdown on workers in the gig economy rather than the global tech companies employing their services, with their methods of classifying workers as contractors rather than employees widely criticised.

The proposed policy has been slammed by the Transport Workers Union, which said the government is “ignoring [the workers’] wealthy employers’ tax avoidance, wage theft, non-payment of superannuation and refusal to cover them while they are injured or sick”.

The discussion paper said there is currently a risk of “non-compliance” with workers in the gig economy while new technologies pose a “significant opportunity” to crack down on this.

“Unlike previous decentralised arrangements, the role of a centralised operator means that it is far more feasible to collect information similar to what is gathered through other existing reporting regimes. This would enable the ATO to data match reported income from individuals and businesses with income reported from other sources,” it said.

The central option being considered by Treasury is to force sharing economy companies to collect and report to the ATO data such as the identity details and income received by those working for them in Australia. This would then be used by the ATO and other agencies for income matching and to pre-fill tax returns.

“What we’re talking about is some regulatory burden on the large providers, and when it comes to the smaller players those who are involved in the sector and already paying their taxes will be much simpler for them to do that,” assistant minister for treasury and finance Zed Seselja told Sky News.

“Obviously it’s up to the individual taxpayers to declare their income, but if the data is shared that will make it easier for the tax office to know the liability and put in place systems that make reporting and payment of the taxes much easier than it is now. All the ways we’re looking at getting this data and implementing this we are cognisant of doing it in a way that doesn’t place a regulatory burden but in fact lowers the burden for individuals.”

The discussion paper does note that this will create new costs and burdens for the companies, and mulls whether startups should be given an exemption.

The paper also acknowledges that some of the larger overseas companies like Uber and Airbnb “may not feel compelled to comply with these additional obligations” and that this would create an “uneven playing field” for local companies.

The proposal has been criticised by the Transport Workers Union, with its on-demand economy coordinator Tony Sheldon saying the government should be focusing on the big global tech companies, not their workers.

“We have heard nothing from the federal government on the widescale wage theft and non-payment of super by the likes of Uber, Deliveroo and others. We have not seen any plans to regulate the on-demand economy to protect workers. Yet today we hear how the government plans to catch these underpaid workers. That pretty much sums up how this government views working people and whose side they are on,” Mr Sheldon said.

Australian gig economy giant Airtasker said the government needs to be careful about imposing a new means of surveillance on their workers.

“We believe that everyone should meet their tax obligations and pay their fair share of tax. We also believe that the vast majority of people want to contribute and government should carefully consider the impact of additional surveillance on the privacy of Australians,” Airtasker CEO Tim Fung told InnovationAus.com.

Treasury also floated another possible angle for the crackdown, involving financial institutions to provide information on sharing economy transactions to the government, reducing the burden on the tech companies. But this would result in more costs for the banks, and the suitable datasets of source, timing and payment amounts may not be available, the paper said.

“It’s not as targeted because you are dealing with financial institutions having to identify who is coming from what part of the economy,” Senator Seselja said.

The discussion paper came from a Black Economy Taskforce recommendation and was announced by the federal government in last year’s budget. Treasury is now accepting submissions on the discussion paper until 22 February.

Do you know more? Contact James Riley via Email.

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