Labor promises to limit business tax cuts and tighten independent contractor rules

The Labor Party’s biannual conference has taken aim at employers, passing resolutions to rule limit and reductions in business tax, tighten rules around independent contractors and protect low income earners.

Under a resolution moved by the heads of the Construction Forestry Mining and Energy Union and the Community and Public Sector Union, the ALP unanimously agreed that any tax reforms suggested by Ken Henry’s review of the tax system should focus on low income earners instead of business.

The resolution is a direct response to growing suggestions that the Henry Review will examine ways to cut corporate tax rates.

It says changes “must meet the needs of society and not the ideologically based demands for lower business taxation. There should be no reduction in company income tax revenues as the consequence of this would be cuts to public services or higher tax payments by individuals.

“Accordingly, in the event the Henry review recommends a cut in company tax rates the Government response will be at least revenue-neutral.”

Small Business Minister Craig Emerson has also promised to crack down on employers seeking to avoid paying some employee entitlements through sham contracting arrangements.

Emerson warned yesterday there is evidence of an increase in such arrangements.

According to a report in the Australian Financial Review, Emerson and Workplace Minister Julia Gillard will meet with union representatives to discuss potential reforms to independent contractors’ laws.

Gillard has also introduced rules that mean firms tendering for Government work will need to comply with Federal workplace laws and provide other support for low-income earners, such as apprentices.

While it must be emphasised the resolutions at political party conferences do not necessarily translate into Government policy, the ALP national conference has given the resurgent union movement a chance to flex their muscles just weeks after the introduction of the Rudd Government’s Fair Work industrial relations regime.