Albanese government’s family business changes bringing fury to the farm
It’s unlikely that Australia’s anti-family business warriors – Anthony Albanese and senators David Pocock and Jacquie Lambie – have ever come face-to-face with a furious ‘farmer’s wife’.
Certainly, until the second day of 2024, I had never had such an experience.
I describe my encounter below to underline that I don’t believe the government has any idea of the family business community fury that they are about to unleash.
My encounter came at a surf coast coffee shop, where I was recognised by a husband and wife who own a small dairy farm in southwestern Victoria near the South Australian border.
They have around eight employees, including some who have been with the family for many years.
On the dairy farm, the wife – like many spouses in smaller businesses – knows everything about the families of their workers.
The spouses or partners to the base entrepreneur are often the family business equivalent of a large enterprise human resources manager, except they operate in a close-knit community and there are no unions involved.
I explained to the couple that very likely one of their eight employees would join a union and become a union representative and as business owners, the farmers would have to pay the cost of training.
The husband was shocked, but the wife was goggle-eyed with anger and frustration and couldn’t believe what I was telling her. Their dairy farm culture would change.
“It won’t happen,” she said with determination.
“But it’s the law,” I replied. And I warned that it gets worse.
If there was a sharp fall in the milk price, and they had to cut staff, they would now have to make retrenchment payments, which, of course, would lower the equity in their property at a time when the business would be struggling.
Previously, businesses employing less than 15 people did not pay retrenchment benefits.
Her eyes were enlarging, and the obvious anger caused me not to mention the other four blows, which she would have read about on Monday. And the family will also learn the new small vehicle emission rules will make it difficult for farms and other industries to buy the flexible vehicles required to carry heavy loads.
Once family enterprises understand the impact of the Albanese, Lambie and Pocock blows, there will be sheer horror. For example, the retrenchment provision means that hiring friends to help expand small enterprises means those friends can wipe out the family taking the risk.
Families in successful businesses in all industries see their employees as part of their community, with a relationship that doesn’t exist in larger enterprises. Of course, many family businesses may find that none of their staff are prepared to be a union representative, but there only needs to be one.
In the statutory retrenchment provisions the number of weeks retrenchment pay rises with the length of service and so for example for two or three years’ service it is around six weeks but for nine to ten years’ service it is 16 weeks. And that means that every year a person works for a small family business, they become a greater threat to the capital base of the business. And that is now in legislation thanks to the ALP, Lambie and Pocock.
It is also going to be harder for smaller family businesses to get loan capital because the banks will look at the retrenchment liability in assessing the security on top of the new accounting standards incorporating emissions and environmental rules.
Accordingly, the attack on the family business sector not only changes people management practices but will reduce the amount of capital that is available and no doubt over time will reduce the significance of the sector – exactly what is planned by the government.
Yet it is smaller enterprises that provide much of our innovation, and consequently our productivity will be harmed. Unions have been reduced to a token force in the private sector, particularly in the family business area. The Albanese government is funded by unions, and the agenda to unionise the family business sector is in part payment for the cash they received to gain power.
By confusing contracting with labour employment and taking on the High Court of Australia, the government will trigger long court cases and incredible uncertainty in the contracting sector for years to come.
Large companies usually have the resources to manage, but family enterprises, including sole traders do not and many will be damaged and shut down. What we are looking at is probably the biggest social change that any elected government has undertaken, leaving aside the measures that were required during the first and second world wars.
Where it will be most prevalent is in small towns, which operate via networks of small businesses which embrace the farming communities. The head of the National Party, David Littleproud, grew up on a large family farm in North Queensland, and his family still operates it. That may give him an understanding of the damage that is set to be created in all rural electorates.
But he may not have personal experiences to enable him to relate to the wider family enterprise community and be the equivalent of a Jacinta Price in the referendum.
It is also possible that Lambie and Pocock having plunged the knife into the family business sector may see the reaction that will be headed their way if they approve the anti-family business measures that are yet to be passed by the Senate – the casual labour elimination, gig economy destruction and the bankrupting of independent truckles via a union-big company cartel and the slashing of ACCC protection powers. But that is a very long shot.
Meanwhile, banning of casual labour will not only greatly impact the flexibility of many family businesses, but it is also designed to hit people with large mortgages. This will longer term lower homeownership in Australia, as well as lifting current mortgage stress.
One of the problems of the Australian parliamentary system is that very few of the politicians experienced mortgage stress, and almost none have understood the pressures in the family businesses.
During my working lifetime, I have invested capital (successfully) and embraced management operational duties in two media businesses. Every day starts with looking at the bank balance to make sure that the funds are available to pay everyone. Politicians and those that work for government and large enterprises simply I have no concept of the culture required to start the day checking the money in the bank.
ROBERT GOTTLIEBSEN BUSINESS COLUMNIST