Tech companies should pay for displaced Australian workers: TWU

Australian workers should be provided with a safety net if they find themselves displaced from the workforce as a result of technology and the "Uberisation" of jobs, according to Tony Sheldon, national secretary for the Transport Workers Union.

Speaking in Sydney on Friday, Sheldon said that the increased presence of tech companies in Australia has brought with it the financial struggle of everyday workers.

In the 18 months that controversial ridesharing service Uber has been in Australia, Sheldon said taxi driver income has dropped by 20 percent. He said the outsourcing of lower-cost labour jobs to Asia as well as the technological advancements of the 3D printing industry have displaced workers, allowing items like prosthetics or jet engines to be printed rather than man-made.

He said artificial intelligence, by way of smart sensors connected to the Internet of Things, is allowing machines to do their own thinking. The ability for machines to diagnose their own servicing needs and download software patches to fix themselves is doing away with traditional servicing jobs, Sheldon said.

"This confirms a trend that old-fashioned car mechanics have been feeling for a while now," he said. "The digitisation of machines makes the man with the wrench much less relevant."

According to Sheldon, the greatest challenge of digital disruption is capturing the benefits of higher productivity, higher income, and less working time whilst avoiding what he called the worsening inequality that previous technology revolutions have wrought.

Sheldon believes Australia as a nation needs to harnesses innovation, but he said this needs to be done whilst balancing market power across society to create a safety net for those displaced by technology.

"We know that some disruption from the current digital revolution is inevitable; some people will be left behind," Sheldon said.

"For those people, it's critical that we retain a decent pension, Newstart payments that allow recipients to make ends meet while they look for work, universal free healthcare for those who can't afford it, and comprehensive superannuation policies that mean workers can accumulate savings no matter what their employment situation."

A safety net such as this would come at a great cost and the workers union believes this cost should be mostly paid for by those that are profiting from the digital revolution.

"In the worst cases, these companies and their apps are ripping through the economy while ripping communities apart," Sheldon said. "Disruptive firms need to be accountable for the labour markets and supply chains they create, and the impact of these on communities."

Sheldon said the obvious way would be for such companies to pay their fair share of tax in a transparent manner.

"The Senate has been doing a good job of uncovering some of the worst excesses that have been going on, so it was disappointing to see the Greens join with the government last week to extend the shield that allows large private companies to hide their accounts."

Sheldon said that an all-white, all-male, all-under-30-years-old group of entrepreneurs is not showing the diversity and experience that is necessary.

"These people have made their own luck, and hats off to them, but it is concerning that a tiny homogenous group of people have such an impact on the working conditions of millions of people," he said.

"Disruption in isolation is no good if it doesn't benefit society more broadly, and you have to ask whether these guys have the life experience to inform big judgements that affect so many people."

Earlier this year, the Senate inquiry into the tax avoidance of multinational companies found AU$31 billion was funnelled to Singapore within a year by 10 multinational companies, and in April, executives from Apple, Google, and Microsoft confirmed they were being investigated by the Australian Taxation Office as part of the Senate's tax avoidance inquiry.

Last month, the Senate committee probed Uber, demanding an explanation of where the money paid in Australia was going.

"We are unlike other, more mature US tech companies," Brad Kitschke, Uber director of public policy in Australia and New Zealand said. "First, and simply, we are not yet a profitable company, and as you are aware, companies are taxed on profit, not revenue."

Sam McDonagh, Airbnb Country Manager Australia and New Zealand, also appeared before the committee in which he argued in a similar capacity to Kitschke that the online accommodation startup was not avoiding paying tax, despite its headquarters being in Ireland, where the tax rate is considerably less than that of Australia.

McDonagh avoided answering what taxation rates the platform was paying overseas, but continued to remind the committee that Airbnb brings tourists to Australia.

From the start of 2016, however, multinational companies found to be avoiding tax will have to pay back the tax owed, plus a 100 percent penalty.

It is expected that between 800 and 1,200 multinationals will need to report, with 30 to 50 businesses being headquartered in Australia.