The Australian Taxation Office needs to set up a taskforce to investigate sham contracting practices in the trucking industry, Western Australian Senator Glenn Sterle said.
Senator Sterle wrote to the ATO’s Commissioner of Taxation, Rob Heferen, after meeting with the ATO’s Parliamentary Services Team in conjunction with NatRoad CEO, Warren Clark and Queensland Trucking Association CEO, Gary Mahon.
“Many decent, reputable and tax paying Australian businesses are now closing their doors and putting their gear (trucks, trailers, equipment etc.) in the hands of auction houses,” Senator Sterle said in his letter to the Commissioner.
Senator Sterle said this situation has arisen due to operators having to compete against sham contractors and also tax avoidance “pricing them out of the market”.
“While drivers engaged on ABNs receive an amount that may look attractive on the surface, under these sham contracting arrangements, employers who engage drivers on ABNs get away without paying workers’ compensation, holiday allowances, sick leave allowances, annual leave, long service leave or superannuation and they don’t collect tax,” he said.
ATA CEO, Mathew Munro said the association supported Senator Sterle in calling for action by the ATO.
“The ATA’s members have raised sham contracting as a significant concern,” said Munro.
“We absolutely support the formation of an ATO taskforce to look more closely at the extent of sham contracting and how to stop it.
“Regulators are best placed to take enforcement action when they have specific information. Anyone in the industry who is aware of sham contracting should report it.”
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