Friday, March 05, 2010

Sustaining small ICT business in Canberra

I presented evidence on "Sustainable ICT Procurement" to the ACT Legislative Assembly Public Accounts Committee, 9:30 am yesterday, as part of an Inquiry into ACT Government Procurement.

The hearing started on time, with three MLAs and about five audience members. The ACT Government is more of a town council, that a regional government. The Committee Room 1 of the Legislative assembly was small, but well equipped. There are very sturdy looking native timber desks, with microphones built in (the hearings are recorded and a transcript prepared).

The hearing was chaired by Ms Caroline Le Couteur MLA (Greens). The ACT has a Labour minority government, with support of the Greens. Like Senate hearings I have attended, there was a colleguete atmosphere, without overt politics. As usual, as an "expert" I was treated very respectfully by the committee.

I made a brief opening summary of my submissions and then answered questions. There was considerable interest in the idea of having green standards for procurement and for working with the commonwealth. There was no interest in green education. There was also considerable interest in impediments to small business in the tender process.

I suggested that the federal government would most likely adopt US Energy Star version 4 for computer purchases. It was unlieklt that the EPEAT standard would be made mandatory, as so few products currently comply.

A series of questions I was not prepared for were about the need for professional indemnity insurance for consultants. I suggested that it would be useful if the level of insurance required could be capped. I explained that government contracts generally required me to have $10M insurance. I suggested this would be better capped at $1M and the Australian Computer Society was working on having this introduced first in NSW. However, on checking later, I found the figure for the ACS Limited Liability (NSW) Scheme is $1.5M and came into force in NSW on 1 January 2010. So it would seem sensible for the ACT to match this $1.5M.

As I was asked about insurance, I raised the issue of Worker's Compensation insurance. My company is required to have this insurance, even though I am the only employee. The paperwork is onerous, requiring a statutory declaration from myself every six months and a statement from my accountant, as to how much I was paid. It is necessary to wait for the accounts to be finalised and get three signatures on one piece of paper. The forms a routinely late as a result and the insurance company is obliged to threaten me each time that they will inform the ACT Government who will then prosecute me. I explained to the committee that the requirements where not as onerous in NSW. I suggested that these be relaxed for micro businesses and explained to the committee that otherwise I may move my business to NSW (many other ICT professionals may do likewise).

ps: I previously wrote to the ACT Government and opposition requesting the worker's compensation law be changed, but they declined to do so:
Date: Tue, 21 Aug 2001 09:26:51 +1000
To: ACT Attorney-General stefaniak(a)
From: Tom Worthington
Subject: Request Change To Workers Compensation Act
Cc: Shadow ACT Attorney-General stanhope(a)

This is to request a change to the Workers' Compensation Act 1951 - SCHEDULE 3 paragraph 10 to remove the requirement for employers to provide a certificate from a registered auditor and a statutory declaration of wages paid. Three people are required to sign a paper form to verify the wages paid by an employer. This is an unnecessary burden, particularly on small bushiness, and precludes the use of electronic commence.

Paragraph 10 currently requires the Employer to supply the insurer with:
(a) a certificate from a registered auditor stating the total amount of wages paid to workers; and
(b) a statutory declaration setting out:
(i) the determined categories of workers employed by the employer; and
(ii) the total amount of wages paid ...
I suggest this be changed by:

1. Omitting sub paragraph (a), and
2. Replacing the words "a statutory declaration" with "an approved form".

This change would allow the Minister to approve a form which simply requires the employer to detail the wages paid. Electronic as well as paper forms could be approved. Electronic signatures would not be needed, as the transaction with the insurer would be sufficient to provide verification at least equal to the current system.

The employer could fill in a paper form or a web form on the insurer's web site. They would later be presented with those details in an invoice for payment. The invoice and payment could be electronic. Paying the invoice would be evidence that the employer received the invoice and considered the figures it was calculated from were correct.

ps: My small business consults to the Federal Department of Employment, Workplace Relations and Small Business on e-commerce and its implementation for business:


Philip Argy said...

This is very informative, Tom - we should talk more often!

Simplifying said...

Hi Tom, I'm in the same position and the insurance company recently told me that the law _had_ been changed in the ACT - towards the end of 2009. My understanding is that all though we still have to take out Workers Comp, it doesn't have to be verified by an accountant anymore. Hope I'm right...
Madeline Carr

Tom Worthington said...

Madeline Carr commented March 12, 2010 1:17 PM:

>... insurance company recently told me ... Workers Comp ... doesn't have to be verified by an accountant anymore ...

The latest form from my insurance company (GIO) has a section for my accountant to fill in and sign, as well as a statutory declaration for me to sign and have witnessed. But perhaps this is an old form.

If other insurance companies do not require this, perhaps it is time I changed insurance companies.

Or perhaps the states could be persuaded to all abolish this requirement. They need to keep in mind that an IT company can easily move elsewhere.