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By its nature, the strong two-tier economy that exists within Australia is not captured within analyses like this. The “law abiding” tier that pays employees t
by DecoPerson 4y ago
By its nature, the strong two-tier economy that exists within Australia is not captured within analyses like this.
The “law abiding” tier that pays employees the award rate, pays something resembling proper GST & income tax, and doesn’t use Proprietary Limited tricks to escape long-term liabilities — the companies in that tier are suffering (especially the smaller ones). These companies are captured in these analyses.
Those in the “under the table” tier, such as your local kebab shop or the guy who takes cash to mow your lawn weekly — they are doing OK. Cooking oil may have doubled in price and fuel is now a significant cost, but they had enough margin to absorb that and can now raise their prices as everyone else does, staying healthy. These are “shadow” companies that don’t appear in analyses.
There’s also a strange kind of third tier, which is “lucky bastards” who score a government job or contract. All tiers of government pay stupidly high amounts, and there’s enough money flowing through the government that this tier (group?) is actually a significant portion of Australians. Imagine welding something for $3,000 for a local council, when it should only be $500 normally. The local council isn’t capable enough to push for reasonable prices.
Oh, and then there’s mining… that’s a whole different thing. So much money there.
At the end of the day, if you’re a small or medium (so 1-200 employees) business that does things properly (pays taxes, stays compliant, and charges honestly), you’re completely screwed.
- brutusborn 4y agoOut of interest, what makes you frame the two-tier economy like this? I’d always thought of the two tiers as rent-seeking vs firms that must compete, not small legal business vs the rest. For example you mention some companies paying award rate, but isn’t that a requirement for all companies? Obviously resource companies can afford to pay well above board, but isn’t that simply a function of high returns from rent-seeking activity?
- DecoPerson 4y agoPaying award rates is a requirement of all companies, but in reality many small and medium businesses don’t. Small business pay under the table, offering certain perks to employees that make them OK with the arrangement. Medium businesses use “contractors” where workers like delivery drivers aren’t employees but individuals (or sole traders) working under piecework contracts. Neither of these are reported to any data-collecting body. (which is the point I was trying to make above but I got a bit side-tracked!)