“Current talks around changes to IR laws should unequivocally exclude any changes to the right of Australian tradies to work as independent contractors,” said Jocelyn Martin, HIA Deputy Managing Director - Policy & Industry.

Ms Martin’s call comes as the Government and Industry representatives meet in Canberra this week to discuss a broad range of changes to areas in the IR space.

“Independent contracting arrangements are a long-standing feature of the residential building industry. The industry relies on these work arrangements as a way of productively managing the needs of building businesses, especially smaller businesses,” said Ms Martin.

“HIA estimates that over 80 per cent of the work completed in the sector is performed by independent contractors.

“For residential builders, it provides a flexible, workable and efficient model for engaging workers and managing the peaks and troughs of the home building cycle. Builders rely on access to good and reliable trade contractors to maintain competitiveness.

“Australians rely on independent contractors to build the houses that feed the desperate demand for affordable housing.

“Federal and state governments have long held different views on what constitutes an independent contractor creating challenges for the industry and threaten the ability for a trades person to remain their own boss. However, any moves that would force a legitimate independent contractor to be classified as an employee would be a backward step.

“HIA is well equipped to help all sides of politics come to a sensible definition for independent contracting, that will not impede the right for trades people to work independently.

“HIA suggests there needs to be a single national objective test, based on the ATO’s approach, to distinguish employees from independent contractors."

To distinguish independent contractors from employees the ATO considers whether a person works to produce a result, provides plant and equipment or tools of the trade and whether they are liable to rectify defective work.

The advantage of this approach is that instead of defining an ’employee’, the rules merely identify who is an independent contractor.

“The task of governments should be to preserve and enhance genuine independent contracting businesses, not force small business to become employees.

“Restricting the use of independent contracting in the residential building industry will only serve to undermine the contribution of the sector to overall economic growth and exacerbate the challenge of making housing more affordable,” concluded Ms Martin.