Wage Theft !

 Australia now has employers troubled by a shortage of people with the skills they need. Industry is fast recovering from the coronavirus lockdowns  and  we may be about to see the long awaited pressure for a wage increase.

In recent times, the distinction between " employees " and  " self employed contractors " has become blurred.  The result is a lot of people earning far less than the minimum wage set by the government. This is particularly prevalent in the food industry and not only are workers deprived of a living wage, they also  lose access to annual and long service leave.

State parliament is about to crack down on what it terms " wage theft ".  The penalties for the under payment of wages will increase from $ 10,000 to $110,000 for each offence.   Under this new package  these penalties will apply to employers who lie to tax inspectors or make false records to conceal tax evasion.

The government is going after employers who " cook the books " to conceal the crime of paying employees less than the award specified  for their job classification, but unfortunately this also seems to be a case of " self interest ".   Under payment of wages also results in a loss of tax that is applied to the wage structure and flows into government coffers.

In particular, it is hard for the government to justify what is termed   " payroll tax " which is applied to employers who have a wage bill that exceeds $1.2 billion.   This has nothing to do with profitability, which is taxed seperately and is another of those " temporary " taxes applied to fund a war - and which persisted when the war ended.

Even the dreaded " income tax " was such a temporary tax when it was first levied but tax is similar to  heroin to a junkie.  It quickly becomes essential to government spending  and absorbed into the money flow that keeps governments solvent.

In many respects, this increased fine legislation to deter wage theft will increase the government payroll. It employs far too few tax inspectors to monitor the number of registered businesses in the state and to be effective those numbers will need to increase.

If this tax crackdown works to plan  there will be an upsurge in offences detected and the number of fines applied, but then those fines will become absorbed in government spending and we will see a drop in the incidence of wage theft.

Such is the outcome of penalty increases in the world in which we live.  Whenever the revenue flow decreases a new source of income has to be devised. and fines are fast becoming essential to the government money flow, as evidenced with speeding fines.