Docked Entitlements

Employee. Entitlements. Are. Not. Operating. Capitol.

Everyone sets money aside for bills. From the dole bludger to the merchant banker. It's common sense. The cost, when reasonable (electricity in a certain state *cough*SA*cough*) is easily measurable, and being unable to pay is an excuse that should only be considered when in extreme hardship (loss of job, injury, whatever).

Business has no excuse for not putting aside employee entitlements in a fund they only dip into when paying employees. When an employee is paid, a certain amount goes to their bank account, and a certain amount goes in the entitlement fund, it's not rocket science, it's a automatic function of accounting software - and the full cost of a full time employee is known very well to every business. Using employee entitlements as operating capital is the same as docking their pay - if the business goes under, it's morally up there with theft.

The 'smirking boss' business Finlay Engineering boss claims: "By the time I pay out all the workers' entitlements, I've got no money." That should actually read "I have no money that is not owed to workers, I should go into debt, ride it out, or close the business." Jim Sutton, the boss, should still be commended for paying out the workers - it doesn't always happen.

A company that loses a worker's entitlements is no different than a worker who steals from their workplace. (And unions or the tribunal ain't gonna give two shits about you if you do that.)

Huon Corporation, in voluntary administration, has around $30 million in entitlements it can't guarantee workers - they're a bit upset about it.

Now, Howard introduced the General Employee Entitlements and Redundancy Scheme (GEERS). Kevin Andrews claimed:

• It "protects workers".
• "Employers are responsible for employee entitlements, but where they have failed to live up to their responsibilities the Australian Government has stepped in to assist employees"
• "Government strengthens commitment to protect employee entitlements"
• "By enhancing the range of entitlements available under GEERS, the Government is improving access for Australian workers and their families to a fair and appropriate level of support in the event of business failure."
• GEERS means, if a company becomes insolvent, the Australian Government pays eligible workers their entitlements - such as long service leave, holiday leave and redundancy pay - to the community standard.

Sounds great. (It doesn't apply to this Huon case, they went into voluntary administration, there a clause somewhere in the WorkChoices fine print - funny that.)

But this GEERS thing is interesting. It, along with other entitlement protection schemes, has paid out around $700 million in worker entitlements thus far. Labor had a plan to tax business in a similar insurance scheme, but now taxpayers pay. It was mocked for "slugging" business with yet another tax.

But, it should have been called an incompetence tax. The businesses all pay for their fellow incompetence - it creates incentive. But with Howards schemes - around 50% of taxes are from salary and wage earners, therefore we pay 50% of the costs - roughly $35 each - for each time companies have lost our entitlements.

So when a company, as in this case, transfers $10 million of assets into a separate property trust controlled by one of its directors and his daughters, the workers A) can't claim against that to get their entitlements, and B) are funding a scheme to save people like themselves, that isn't saving them.

It really is amazing how much shit we can tolerate.

Interesting tax facts: (2003-4)
Individuals: Total income: $415 billion, taxable income: $395 billion, net tax: $95 billion.
Company: Total income: $1,527 billion, taxable income: $145 billion, net tax: $35 billion.