A rapidly growing shadow economy of sham contractors was applying undue pressure on the transport industry which had seen a 173 per cent rise of insolvencies according to the Western Roads Federation.
The Western Australian group has joined a chorus of industry bodies including NatRoad and the Victorian Transport Association to raise the issue with federal ministers and senior officials who met last week after WA Senator Glenn Sterle organised a hearing in Canberra.
Urgent action from a multi-agency taskforce was called for as operators were already struggling under what Western Roads Federation described as “sustained pressure from higher operational costs, rampant red tape and bureaucratic delays, and persistent shortages of drivers and skilled personnel.”
Professional and compliant transport operators confronting these sustained pressures were now facing an even greater threat.
“I’m confident that Canberra received the message loud and clear but setting up the multi-agency taskforce and addressing regulatory gaps requires time,“ said Cam Dumesny, CEO of Western Roads Federation
“Meanwhile, we are offering to work with the WA Government and the Transport Workers Union, to build on some of the identified state level solutions we have to prevent this sham contracting virus from spreading further into WA.”
Western Australia has shown that collaboration between government and industry can deliver cost effective outcomes, such as the Heavy Vehicle Driver Training Program according to Dumesny.
“We can build on this model of collaboration to develop the identified state level collaborative solutions required to help stop the spread of this sham contracting virus in WA,” he said.
“It is worth noting the identified solutions will also concurrently improve productivity, safety and lower emissions.”
Sham contracting, as it has been categorised, is the practice where workers are misclassified as independent contractors, often under an ABN despite working under conditions that legally define them as employees.
By misclassifying workers, companies can avoid paying superannuation, leave, workers compensation and taxes.
This provides them with a significant commercial advantage over compliant businesses.
“Anecdotal evidence links sham contracting to lower compliance with heavy vehicle regulations, misuse of rest areas including possible environmental and WorkSafe breaches, absence of requisite insurance policies, and reduced road safety,” said Dumesny.
While artificial cost advantages over compliant operators had fundamentally distorted market competition, widespread illegal activity was flourishing unchecked, under a system where lawbreakers prospered at the expense of legitimate businesses NatRoad CEO, Warren Clark said in a statement issued to industry last week.
