When journalists ask difficult questions . . .

I’m quite used to receiving phone calls from the media, but when a senior journalist from one of the main media companies makes an appointment to come and see you, generally something is up. Such was the case recently when I was interviewed for a series of investigative articles that appeared in Fairfax media’s flagship papers — The Age and The Sydney Morning Herald.

I’m used to being contacted by junior journalists who talk to me for twenty minutes, then take two sentences out of context, misquote me and write some beat-up story about some aspect of the industry. This was quite different; the gentleman concerned announced that he and another colleague had been granted a substantial number of labour hours to research working conditions and taxation compliance in the hospitality industry. He had detailed notes about the preliminary research he had conducted and it became obvious he had spoken to many people before coming to see me.

Some subject matter is best left to others

Danger, danger!

I must admit to having mixed feelings about the subject matter I was asked to comment about. This is dangerous stuff. On one hand I have never been comfortable about some of the more nefarious aspects of this industry, particularly the working conditions and below award payments I am aware exist in many businesses and the blatant tax evasion I have encountered. On the other hand, I have quite a bit of sympathy for business operators who would be insolvent if they played by the rules.

What did become apparent was that a spotlight was being placed on the industry by the media and that some pretty unsavoury stuff was surfacing, and that Government departments that had placed enforcement of our industry rules into the ‘too hard basket’ were not being criticised in equal measure. I probably added to the narrative by taking the attitude that it is human nature to push the boundaries when rules are not enforced, and that you can hardly blame one side of the equation for not doing the right thing when the other side — the regulators — are equally negligent.

The consequences of negative publicity can destroy a business — take the case of George Calombaris in Melbourne

Most larger businesses do the right thing — but some do not.

The clients I deal with tend to be larger and generally play the game quite straight because it is good business practice to do so, despite recent shaming of a small few of them. At present we appear to have a two-tiered hospitality economy where responsible business people who do the right thing by their staff and who pay their taxes are being forced to compete with businesses down the road who operate on an entirely different cost structure because they unashamedly rort the system. This strikes me as manifestly unfair. I wonder what the man in the street, who has PAYE taken from his pay packet before he even sees the money would say if asked about this?

Because of the size and distribution of the industry enforcement is nearly impossible

Enforcement is almost impossible

Is the answer stricter enforcement of the rules? Perhaps, but it’s easier said than done. There are 80,000 hospitality businesses in this country and it would require a massive and very costly exercise to audit them all and force compliance. Think about the difficulties of language and distance and you’ll start to appreciate the problem. Conversely, I don’t think highlighting unwitting scapegoats in the media is terribly fair either, when the practices the hapless victims are being publically pilloried for are quite common or even universal.

I also have to admit some sneaking sympathy for the argument so eloquently put by Kerry Packer in his now famous Senate enquiry appearance many years ago. To paraphrase: ‘Why should I give the Government any more money than I have to, when they only waste it (with inefficient bureaucracies)’?

Survival of unsustainable businesses hurts us all

If I look at the bigger picture, allowing businesses to exist when they are really not viable has led us to the point where there are an unsustainable number of hospitality businesses in this country. As a result, margins have declined to the point where there is a major incentive to cheat in order to survive. In other words, because of a lack of enforcement of the rules more and more business operators are forced into the situation where they either follow suit, or close-up shop. This becomes self-perpetuating and does none of us any good in the long run.

Obviously, I don’t have the answers to the problem of creating a fair and equitable system, because these are complex issues that will require major changes to both Government and the industry, and ultimately I suspect that market forces will prevail — but not before many workers and many business operators suffer.

Because of all this it’s inevitable that we will move toward a cashless society.