Compo drives NSW exodus

If you were thinking of visiting a country and saw on television a huge refugee exodus from that country, you'd be cautious about visiting.  Surely if the locals are running away there must be something dangerous about the place?

The New South Wales Government is doing a business promotion exercise in Queensland.  "Come to NSW!" they say.  But the problem is there's a business exodus from NSW to Queensland.

What do the NSW residents know that is causing them to leave?

Some simple stories tell the truth.

June Gibson is a suburban mum.  Her husband, David, is a bricklayer or at least he was until NSW workers compensation laws put him out of business.

June and David live in Gosford.  Like most self-employed people in the building industry if David had a job, he'd call on other self-employed bricklayer mates to help him.  They paid workers compensation premiums on the labourers they employed.  But they weren't required to pay premiums on the self-employed bricklayers.  They'd had several audits by the workcover authority over the years and everything was OK.

In early 2004 they had another audit.  They received a bill for $52,000 demanding premium payment on the self-employed bricklayers they'd used over the past seven years.  They were shocked.  They would have to re-mortgage their house.

They said this was unfair and refused to pay.  They were refused workers compensation cover until they paid.  This meant David could not work.  He had to close his business.  Their retirement plans have been destroyed.

The local newspaper ran a story.  June was swamped by people in the same situation.  She formed a committee and lobbied politicians.  June and David have had their bill reduced to $10,000.

The same thing has happened to others who have run public campaigns.  But June won't pay.  She says the NSW workers compensation laws are a mess.  She is correct.

If you are self-employed in NSW you are not allowed to register for workers compensation.  If you use a self-employed person you are not supposed to pay premiums on them.  But the definition of who is self-employed is confusing.  Even the auditors don't agree.

The outcome is that hundreds of thousands of small businesses in NSW live in a legal grey-zone always fearful of facing June and David's situation.  With fear like this it's hard doing business.

But it's only one reason why NSW business people shift to Queensland.

NSW has "unfair" contract laws that have turned the NSW Industrial Relations Commission into a super policeman of business.

The laws don't apply to employees but to commercial contracts.  Commercial disputes are handled as if they are industrial relations disputes.  It's created massive confusion on tenancy leases, franchising and many commercial contract situations.  Normal commercial law has been dumped and no one can be sure where they stand.

There's still more.  NSW work safety laws are dangerous.  If an accident occurs the employer is automatically guilty.  Un-proving guilt is almost impossible.  Appeals are prohibited.

Employees have little responsibility even if they cause an accident.  Unions can and do prosecute and keep half the fines.  Banks have suffered work safety prosecutions after bank robberies.  The robbers have presumption of innocence.  The businesses have presumption of guilt.  Normal justice has been eliminated in NSW.

The Government has proposed changing some of the laws but is still prosecuting people under the existing unjust laws.  These are just a few examples of a deep cancer that is repeated in almost every area of NSW business regulation.

Laws in NSW don't give business clarity.  Justice is too often dependent on striking the right deal with the right union or political faction.

If you're high profile you might receive a better deal than someone else.  "Mates" are favoured over truth, and clear and consistent policy.

The outcome is that the cost of doing business in NSW is always unknown.  June, her husband, David, and all their friends are now fearful of doing business in NSW.

Big business is in the same situation.

This is why NSW has become the business refugee source of Australia.

The best advice for Queensland business people is to stay put and enjoy the more certain business climate.

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