The Killing of Small Businesses

Rudd comes from the world of big business, expensive parties and has a wife who has made a fortune on the policies of the Howard government. Rudd's party has solid roots in the Union movement, the majority of sitting members are or were closely associated with the Unions.

As we have seen over the years unions kill business. They block work, stop imports and exports, ask for more and more benefits without putting much back and they are not concerned if a company folds as long as the unions get their own way.

In June the Rudd government will re implement the "unfair dismissal laws" and processes for small businesses. Many small businesses are being forced to close right now because of the current financial crisis. The law works as follows:

1. If a company wants to get rid of an employee who is not performing they will need to pay to seek advise on the process.
2. They then face a process where they are encouraged to pay off the employee.
3. If they hold firm they have to go to court to defend their decision.

Sounds easy right? The problem is the cost. The first part costs about $10000 in legals fees, the second is typically 12-13 weeks of pay and the third is an additional $10000 to $50000 in costs to defend themselves.

The process is designed to give the sacked employee an additional bonus that works out to an average of $10000. The process is also designed to discourage taking the case to step 3.

This means that a company either needs to keep a useless or disruptive employee or budget 10-20 thousand for each one. It doesn't take a genius to see that the reintroduction of this process, under the current circumstances and economic times will force many more small business out of business. It will also have people think twice about setting up a new small business. It could also means that employment becomes a contract process, or one with high turnover during probation periods.

Labor governments have never been very supportive of the small businessman.