Firing 5 people to avoid paperwork

**buggerlugs** · 24-02-2015, 04:49 PM

http://www.news.com.au/finance/work/...-1227236531289

POLITICIANS and central bankers scratching their heads wondering why businesses aren’t investing ought to speak to Sydney hairdresser Penny Martin.
After running her own salon for several years, the burden of GST paperwork became so stressful, costly and time-consuming she decided to call it quits.
Ms Martin decided to work from home instead, letting five employees go and turning down clients to keep her annual revenue below $75,000 — all to avoid GST paperwork.
She supplements her income by teaching.
“I have purposely scaled down my business for that very reason, because it’s all just too much,” Ms Martin told AAP.
“I do not want to cop the GST, I’d rather earn less, go away and do a couple of days teaching a week and say no to customers and not bother, it’s just not worth it.
“I had five people that I employed, people doing work experience from schools, people in juvenile justice used to come and do work experience with me, all that commitment, all the charity events, all those things, gone.
“There’s no incentive to try and get on in this country.” Ms Martin’s story paints a bleak picture at a time when Australia’s jobless rate is rising to decade highs and the economy is struggling to grow.
Sluggish business investment was a key reason the Reserve Bank recently scaled back its forecasts for Australia’s economic growth, and in turn, cut interest rates to a record low.
RBA officials have repeatedly blamed a lack of business confidence and risk-taking as the major barrier to the economy’s ability to compensate for dwindling mining investment.
They say it’s up to the politicians to work out how to rouse those spirits.
Perhaps they should give Penny Martin a call.

I couldn't agree more with this woman. Her statement is so true "There's no incentive to try and get on in this country"...............
Salary and wage earners get screwed over big time doing overtime as well......

danzvtil · 24-02-2015, 06:50 PM

yes, she probably makes more now than then with none of the headaches or associated risk.

**Ross 1** · 24-02-2015, 07:52 PM

Had a small landscaping business in Brisbane, found other employers for 4 of my guys. With myself and two others and a reduced work load to compensate for smaller operation I ended up making more money and got my weekends back. Everyone used to say its great you only work 7-3, what they didn't see was the 4 hours every day doing paperwork to keep the government happy and calling customers, quotes etc. Downsizing you not only save time, you also save on workers comp., vehicle insurance, liability insurance and tax.

**buggerlugs** · 24-02-2015, 08:11 PM

Yep, the amount of blokes I know in business who reckon they made more money with less staff and less worries is amazing. It's terrible to be in that situation. It's not good for the country. What motivation have we got, as the harder we work to get ahead, the more we are penalized......

mr smith · 24-02-2015, 08:12 PM

I know two business owners who have done the same thing. Plumber and Forklift mechanic. The paper work and being stuck with nitwit employees due to not being able to fire the duds have kept probably 10 - 12 jobs from being created.

**aussiblue** · 24-02-2015, 08:23 PM

Paperwork has and always be part of running a business but I can understand why some people hate it and why since year dot small business has complained about government red tape etc. . However, there are other options e.g. hire a bookkeeping service or put a MYOB or similar system in place. But as always, some will choose to scale their business and future wealth options so they have minimal paperwork. At least in Oz the BAS and ABN rules provide for that option.

Geez Louise · 24-02-2015, 08:25 PM

Just so everyone knows what this thead is about. Extract of the story is below:

Quote:

Originally Posted by news.com.au

POLITICIANS and central bankers scratching their heads wondering why businesses aren’t investing ought to speak to Sydney hairdresser Penny Martin.

After running her own salon for several years, the burden of GST paperwork became so stressful, costly and time-consuming she decided to call it quits.

Ms Martin decided to work from home instead, letting five employees go and turning down clients to keep her annual revenue below $75,000 — all to avoid GST paperwork.

She supplements her income by teaching.

“I have purposely scaled down my business for that very reason, because it’s all just too much,” Ms Martin told AAP.

“I do not want to cop the GST, I’d rather earn less, go away and do a couple of days teaching a week and say no to customers and not bother, it’s just not worth it.

“I had five people that I employed, people doing work experience from schools, people in juvenile justice used to come and do work experience with me, all that commitment, all the charity events, all those things, gone.

“There’s no incentive to try and get on in this country.” Ms Martin’s story paints a bleak picture at a time when Australia’s jobless rate is rising to decade highs and the economy is struggling to grow..

**Ross 1** · 24-02-2015, 08:28 PM

I had one young guy,19, when I found him a new job and re did all my insurances, I saved $1600 on the ute cover, $1250 on workers comp- he had a claim for a tiny nick on his arm that only required a bandaid and that doubled my policy for 12 mths till I didn't claim in that year.

damo76 · 24-02-2015, 09:28 PM

Everything is just stupidly complicated just because the government is scared of missing out.
I used to love working for cash before the gst came in

b0son · 24-02-2015, 11:16 PM

Australia - a nation in which we've fooled ourselves into believing bureaucracy is proportional to productivity.

**buggerlugs** · 25-02-2015, 07:22 AM

Try to discuss with out bringing politics into it, as we know what will happen.............

QLD-Bluey · 25-02-2015, 07:33 AM

I wonder how long it will be that the government tries to lower the GST threshold?

mik · 25-02-2015, 08:12 AM

The whole system is broke, we are in a state of over regulation, i noticed as a young bloke that used to do a **** load of shift work hours each week , that every year govco would become more intrusive into the tax/wages system, now days you cant fart without govco wanting to try and find a way to put a gst on it.

i asked my accountant years ago if the gst was making taxation easier....... because that was the govcos main war cry at the time ..... the gst was going to simplify the tax system ...... he laughed his head off at me.

i believe we are on our way into recession, the work force is in a state of duldrums, the peoples confidence is in the septic, and the powers that be are looking at cutting the crap out of social welfare according to news today.

this thing with the lady in the article cutting people has been going on for some time, i would be expecting more unless something happens to get industry going again.

Sioso · 25-02-2015, 08:45 AM

Agree, over regulation is strangling the life out everyone.
10 years ago we had 175 field staff coordinated by 10 admin staff.
Today we turnover 30% less revenue and only have 120 field staff but require 22 admin staff!
The compliance is ridiculous, more than 50% of it is unrelated to anything we do but we still have to do it.
W/comp is a complete rort, fraudulent claims that nobody will look into, just have to shut up and pay no matter what.
Payroll tax - a tax on employing too many people??? This was supposed to be abolished with the introduction of GST - another non-incentive to grow your business.
We used to employ somebody and they would be working within a few days now it can take over 6 weeks after we jump through all the government hoops, by the time they start the job has disappeared.
And yet all I ever hear is how they are trying to streamline and simplify everything...............

**aussiblue** · 25-02-2015, 10:18 AM

Quote:

I used to love working for cash before the gst came in

and the related tax evasion for some that did gave the Government the excuse to adopt a GST.

vztrt · 25-02-2015, 10:47 AM

Quote:

Originally Posted by aussiblue

and the related tax evasion for some that did gave the Government the excuse to adopt a GST.

Which did nothing as plenty of people still work cash in hand.

**MercurySilver** · 25-02-2015, 11:23 AM

I could work 70 hrs a week.
But I do 50 because after about 50 the tax is that stupid I'm on less an hr than I am on normal time
So why would I bother?

No incentive.

Then the boss says ohh u get it all back at tax time.
If I got it back at tax time then they'd be no reason for a taxation system you dick

**aussiblue** · 25-02-2015, 11:57 AM

Everyone want a free ride; someone has to pay the taxes that provides for the school teachers, schools, defence, fire services, roads etc.

b0son · 25-02-2015, 12:16 PM

Quote:

Originally Posted by aussiblue

Everyone want a free ride; someone has to pay the taxes that provides for the school teachers, schools, defence, fire services, roads etc.

No, we understand we need those services. What we don't want is money spent on rubbish the majority have no need for.

This makes for interesting reading, avoid if you are easily angered...

http://ciswastewatch.org.au/

**buggerlugs** · 25-02-2015, 12:35 PM

Quote:

Originally Posted by aussiblue

Everyone want a free ride; someone has to pay the taxes that provides for the school teachers, schools, defence, fire services, roads etc.

No, I don't think everyone wants a free ride. Many a worker are prepared to do overtime to get ahead, but what's the point if they are going to work all day Saturday (for an example) away from their family, earn an extra $160.00 in their paypacket and find an extra $80.00 taken out in tax. Why bother........

**Ross 1** · 25-02-2015, 12:55 PM

Quote:

Originally Posted by aussiblue

Everyone want a free ride; someone has to pay the taxes that provides for the school teachers, schools, defence, fire services, roads etc.

I sure most sane people realise the need for tax in society but to quote Kerry Packer "I am not evading tax in any way, shape or form. Of course, I am minimising my tax. Anybody in this country who does not minimise his tax wants his head read. I can tell you as a government that you are not spending it so well that we should be donating extra."
If I can ,through legal but creative, accounting keep my personal tax rate in 30 odd percent tax then I will. If it means not working as hard and seeing my family more, all the better.

**MercurySilver** · 25-02-2015, 12:57 PM

exactly

**aussiblue** · 25-02-2015, 01:04 PM

Avoiding rather than evading tax is fine provided it is not to the determent of your after tax profit or income. But many people are so tax minimalised that they sometimes reduce tax to detriment of their gross income or profit or control of their business assets (through setting up trusts etc). As an accountant and business adviser it was frustrating to see people rate you against other accountants according to how little tax they paid rather than how much income or profit they made. It was often hard to get them to understand that they were better off making more profit or more income and paying more tax.
The simple way to avoid tax is to make no profit or maintain a low income; but where does that lead? And I have some real ethical and morality concerns with companies like IKEA who set themselves up as a "charity" to avoid tax. Unfortunately the current Government has watered down the ACNC that was going to chase up these fake charities.

**aussiblue** · 25-02-2015, 01:13 PM

See http://www.afr.com/p/national/why_ik...IJHQzP8qQANBUP

Quote:

Despite reporting decades of miserable results, Swedish furniture company IKEA’s Australian arm has earned an estimated $1 billion in profits since 2003, and almost all of it has been exported tax-free to Luxembourg and the Netherlands.

Documents submitted by accounting firm PwC to Luxembourg officials help unlock one of the mysteries of Australian retailing – how the flat-pack giant could lift its sales here by 500 per cent while its profits barely budged.

The Luxembourg documents detail secret advance tax agreements in 2009, and identify IKEA entities that have received hundreds of millions of dollars from the Australian operation – including franchise fees, interest payments and fees for a “risk agreement” that to date has cost $260 million.

In contrast to the offshore profits, IKEA reported losing money here every year from the mid-1980s until 2002, when accumulated losses stood at $67 million.

**Ross 1** · 25-02-2015, 01:33 PM

Quote:

Originally Posted by aussiblue

Avoiding rather than evading tax is fine provided it is not to the determent of your after tax profit or income. But many people are so tax minimalised that they sometimes reduce tax to detriment of their gross income or profit or control of their business assets (through setting up trusts etc). As an accountant and business adviser it was frustrating to see people rate you against other accountants according to how little tax they paid rather than how much income or profit they made. It was often hard to get them to understand that they were better off making more profit or more income and paying more tax.

I understand what your writing, but, there seems to be very fine lines in this country between being a larger profitable company,that is constantly gambling on expansion, a medium size that is just breaking even and a small company that is making more profit than the medium companies with out the headaches. Have had experience with all sizes, medium and small I've owned, I would take the smaller company every time.

b0son · 25-02-2015, 01:49 PM

How much GST would IKEA pay? Since most of its inputs are from offshore, they'd not have many of the GST credits an entirely local operation would, so wouldn't be able to easily avoid that.

Maybe that's the secret... move away from an income-based system and more toward consumption-based. I'd happily pay a 25% GST and no income tax.

mik · 25-02-2015, 02:21 PM

Quote:

Originally Posted by FGX310

Agree, over regulation is strangling the life out everyone.
10 years ago we had 175 field staff coordinated by 10 admin staff.
Today we turnover 30% less revenue and only have 120 field staff but require 22 admin staff!
The compliance is ridiculous, more than 50% of it is unrelated to anything we do but we still have to do it.
W/comp is a complete rort, fraudulent claims that nobody will look into, just have to shut up and pay no matter what.
Payroll tax - a tax on employing too many people??? This was supposed to be abolished with the introduction of GST - another non-incentive to grow your business.
We used to employ somebody and they would be working within a few days now it can take over 6 weeks after we jump through all the government hoops, by the time they start the job has disappeared.
And yet all I ever hear is how they are trying to streamline and simplify everything...............

you dont have to walk far down the road to find many many more examples of your company.

the main road near me is industrial on the other side of the road, as a young unskilled bloke i used to door knock looking for work, actually got jobs in some of them, so i know the history of them , a lot where bigish companys that had hundreds of people and multiple offices around the country, have either closed or minimised down to a fraction of their original size or hang on by a shoe string.

this is the path we have been steered down , i make no apologies for blaming the powers that be(all of them ), who put us where we are today, some may think we are doing ok, personally i think we are looking up out of a deep hole and have been for some time ..... and have a lot of climbing to do.

jpblue1000 · 25-02-2015, 06:07 PM

Quote:

Originally Posted by mik

this is the path we have been steered down , i make no apologies for blaming the powers that be(all of them ), who put us where we are today, some may think we are doing ok, personally i think we are looking up out of a deep hole and have been for some time ..... and have a lot of climbing to do.

While I think governments of all persuasions have made poor judgment policy, I think the main reason medium sized Australian firms are downsizing is because Australians aren't using their goods or services. instead utilising offshore services and certainly preferring to by the oft cheaper product. They continue to exist to service niche markets sectors where the overseas providers don't yet have a comparable product or service.
We as Australians have ****ed our countries fortune down the drain buying cheap and nasty tat and governments have just given us what we want.
JP

Binny · 26-02-2015, 01:21 PM

All around me at the moment I am seeing people I know being made redundant, companies downsizing or closing. I have an axe over my head at the moment and I know my manager is struggling to fend off the directors who are asking him to downsize. It's not like its the first time, talk about Deja Vu.
I am on a a decent middle income wage, but we are single income as my wife is studying full time. I drive a modest car that cost 15k, we live in a cheap house out in the burbs and I commute up to an hour each way. And I have to admit we struggle to pay the bills.

Yet all around me every day I see people driving all these flash new cars and I wonder what the heck is going on. We seem to be heading toward recession, on one hand people are struggling yet more than 1,000,000 new cars are being sold each year and luxury brands like Mercedes and BMW are going gangbusters.

There seem to be some real contradictions going on. Are people just living way beyond their means?

vztrt · 26-02-2015, 01:36 PM

Quote:

Originally Posted by Binny

Yet all around me every day I see people driving all these flash new cars and I wonder what the heck is going on. We seem to be heading toward recession, on one hand people are struggling yet more than 1,000,000 new cars are being sold each year and luxury brands like Mercedes and BMW are going gangbusters.

There seem to be some real contradictions going on. Are people just living way beyond their means?

I bet there will be people who will be in big trouble if things go real bad. People are struggling to pay their mortgage now at record low interest rates.

The best thing is to be be able to have a back up plan if things go to the dogs. They'll be the ones who will ride out the bad times, till it comes good again.