David Leyonhjelm. The sharing economy

If a man’s home is his castle, he should be free to allow anyone he wants to stay in this castle. If a woman’s car is her chariot, she should be free to offer a ride to anyone she wants. And unless we are slaves, we should be free to offer our time to do odd jobs and to offer our goods for sale.

These are age old truths, so basic that no one ever bothers to question them. And as we increasingly rely on the internet, it is also becoming easier for people to offer their homes to visitors, their car for trips, their time for odd jobs, and their goods for sale. Mutually beneficial exchanges are blossoming everywhere.

This is the sharing economy, made possible because we live in an essentially harmonious society where people get along, we trust our neighbours, and contracts are enforceable. The development of the sharing economy is truly something to celebrate.

But there are leeches who want to spoil the party, and who are getting governments to do their bidding.

Hotels, real estate agencies, taxi companies, unions and retailers are lobbying for bans, regulations and taxes to discourage people from participating in the sharing economy, because it disadvantages them. They have taken aim at sites like AirBNB, Cubbi (a site to find a home to rent), Uber, Airtasker and E-bay. They want to protect their interests at the expense of everyday Australians.

Hotels are lobbying for a tax on people using AirBNB. Taxi companies have succeeded in hitting Uber drivers with GST even when their annual turnover falls short of the $75,000 small business threshold. Unions are busy labelling every odd job arranged through sites such as Airtasker as sham contracting. And the big chain stores have succeeded in imposing GST on people who buy items from overseas through sites like E-Bay, even when the item is below the $1,000 low value imported goods threshold.

These vested interests invariably argue that people making mutually beneficial exchanges through the sharing economy are being exploited. Yet, oddly enough, they struggle to find anyone who thinks they’ve been exploited. To the contrary, the vast majority of people who find somewhere to stay using AirBNB, take a trip on Uber, get an odd job through Airtasker or buy something on E-Bay value the experience. In fact, they do it again and again. If this is exploitation, Australians are a bunch of serial masochists.

The vested interests argue that people making money in the sharing economy are dodging tax. But how would they know? People who make money letting out their home through AirBNB are obliged to declare their income to the tax office, not the lobby group representing resorts and motels.

True, if you rent someone’s home through AirBNB it might not have wheelchair access and the cupboards and appliances might not be child-proofed. The same applies when staying in a friend or relative’s home. It’s also a risk that no one is forced to take, and yet millions are willing to take it. The old adage of ‘buyer beware’ applies.

As it happens, the quality of service in the sharing economy is second to none. For instance, when you arrange a ride with Uber, the car is invariably cleaner and delivers a smoother ride than a taxi. This has something to do with the desire to get repeat business, and that you can read and give reviews of the people offering their services. But it is also a result of the basic hospitality of everyday Australians in their person-to-person interactions.

Rather than attempt to shut down the sharing economy, those in the old economy who are complaining about it should lift their game. Service, quality and price are still the keys to success.

And rather than heed the special pleading of the vested interests, governments should learn some lessons from the popularity of the sharing economy. People are happy to stay in a house that isn’t plastered with warning signs on the walls, and to ride in a car that doesn’t have bureaucratic notices stuck all over the windscreen.

Regulation in the old economy that wraps us in cotton wool and adds layers of costs should be pared back, rather than extended to everyday Australians voluntarily participating in the sharing economy. And lower taxes on the old economy would be a welcome development too.

David Leyonhjelm is a Senator for the Liberal Democrats

This entry was posted in Cultural Issues, Guest Post, Uncategorized. Bookmark the permalink.

25 Responses to David Leyonhjelm. The sharing economy

  1. Nicholas (Unlicensed Joker) Gray

    You want people to decide for themselves? But only the government has the resources to be able to tell what is the best option for you, so it should decide!
    Glad we’ve had this little chat. I’ll tell you what your opinion should be on other subjects later.

  2. stackja

    ALP likes the regulations.

  3. Tim Neilson

    It’s going to get worse, not better.

    The “Black Economy Task Force” has released a new paper of policy ideas. Much of it is reasonable at least for discussion, but there’s one highly dangerous concept.

    They are floating the idea of an “Australian Business Licence”, i.e. that anyone who wants to establish any business whatsoever has to apply to the government for permission, and satisfy any criteria that the government seeks to impose.

    Bye bye liberty.

  4. .

    They are floating the idea of an “Australian Business Licence”, i.e. that anyone who wants to establish any business whatsoever has to apply to the government for permission, and satisfy any criteria that the government seeks to impose.

    Bye bye liberty.

    Holy fucking shit. They can’t be serious can they? Well, yes they can.

  5. Senile Old Guy

    They are floating the idea of an “Australian Business Licence”, i.e. that anyone who wants to establish any business whatsoever has to apply to the government for permission, and satisfy any criteria that the government seeks to impose.

    Since we currently have a LNP government, I expect they will follow this recommendation, once they have finished with SSM.

  6. struth

    The government has it’s monstrous tentacles wrapped firmly around the ship of freedom and is pulling it under fast.
    Even if we succeeded in chopping a few of the tentacles attacking the above “sharing examples” the government monster’s tentacles will come at it from a new angle and eventually even regrow the tentacle anyway.
    A blow must be struck at the heart of the beast.
    Trump style.

  7. Jumpnmcar

    Illicit Liberty is the goal of the left, always has been.

  8. BoyfromTottenham

    I am the first person to want government regulation wound back – IMO most of it is just a dead weight on the economy, reducing private investment, employment and profits, while increasing taxes to employ hordes of inefficient bureaucrats. On the other hand, ordinary folk who willfully and knowingly break government regulations by say running an unlicenced taxi service or an online ‘bank’ get taken to court and punished, while foreign companies that do the same thing get away with it scot free. So dear Senator, lets hear your plan for creating a level playing field for Australian entrepreneurs in the ‘sharing economy’. How exactly do you propose that an Australian company setting up a business to provide a ‘sharing’ service which is currently licensed or otherwise regulated by a level of our government, but without bothering to comply with these regulations, will be treated as generously as Uber, or AirBNB by our state and federal governments? Call me when I am eligible to be treated equally with Uber.

  9. .

    Stupid. Banal. Evil.

    https://www.accountantsdaily.com.au/tax-compliance/10612-black-economy-taskforce-makes-raft-of-proposals

    A third notable proposal is to reform the Australian Business Number model.

    The taskforce has found that ABNs are not valued by holders, and suggests that the ABN should be renamed the Australian Business Licence (ABL), whereby holders must first obtain a provisional licence before having to complete a business literacy test to convert to a full licence.

    Unrelenting government greed and catastrophically damaging sheer economic ignorance

    http://www.smartcompany.com.au/finance/tradies-accused-of-using-bunnings-abn-details-as-calls-for-a-system-overhaul-grow/

    Small businesses operating in “high risk” sectors could be subject to automatic minimum tax bills after the black economy taskforce suggested it would investigate the idea…

  10. Rohan

    But there are leeches who want to spoil the party, and who are getting governments to do their bidding.

    Hotels, real estate agencies, taxi companies, unions and retailers are lobbying for bans, regulations and taxes to discourage people from participating in the sharing economy, because it disadvantages them.

    Yes, leeches from free enterprise like Hoteliers, real estate agents and retailers who are under the imposition of heavy, draconian and expensive government regulation and/or licencing. But lets not stop there, lets add builders, accountants, lawyers (especially those leeches) medical practitioners, forestry workers, manufacturers, energy and mining and on and on and on. Leeches one and all.

    They have to tow the all encompassing government regulatory line or be closed down and/or heavily fined and/or jailed BY the government for failure to comply. Bloody leeches! Parasites!

    Now if I offer my services on the side to my usual employment, for a fee, the ATO demand that I declare that as income so it is therefore taxed and/or regulated. I face similar draconian penalties for non compliance if caught to the leeches of society listed above. I guess that makes me a tax paying leech too.

    But low and behold, our incumbent federal senator thinks that others making a quid outside the usual business channels, ie the “sharing economy”, are exempt from all forms of regulation and taxation.

    Excellent. Lets apply that to the whole economy, both the caring one and the leech like one. No more rules, licencing, regulation and taxation for everyone. Equalidy for all; I’ll vote for that!

    But senator, doesn’t that mean no more taxation, government licensing fees and duties are raised to pay for your exorbitant parliamentary salary. What will you then do? I’ve heard that Uber has some openings…

  11. Jumpnmcar

    They are floating the idea of an “Australian Business Licence”, i.e. that anyone who wants to establish any business whatsoever has to apply to the government for permission, and satisfy any criteria that the government seeks to impose.

    It’s that way now.

  12. Jumpnmcar

    shit, wrong button….

  13. struth

    Complying with regulation and the financial burden of government needs to be seriously looked at.
    Those made to comply and pay government for operating have a legitimate complaint against those that don’t.
    It’s like Gerry Hervey pointing and winge-ing about competitors instead of seeing that it’s the government holding him back from competing.
    The government love these types.
    Instead of attacking the government for taxing him unfairly compared to his competitors, he attacks his competitors.
    Taxis companies should be fighting the government and not Uber.

  14. struth

    They are floating the idea of an “Australian Business Licence”, i.e. that anyone who wants to establish any business whatsoever has to apply to the government for permission, and satisfy any criteria that the government seeks to impose.

    It’s that way now.

    I’ve got an ABN and a registered business name.
    What else do they need, now?

  15. .

    But senator, doesn’t that mean no more taxation, government licensing fees and duties are raised to pay for your exorbitant parliamentary salary. What will you then do? I’ve heard that Uber has some openings…

    He owned a commercial farm, HR consultancy and was a vet before he was a Senator.

    Dave is also an old man now too so he might retire.

    Now if I offer my services on the side to my usual employment, for a fee, the ATO demand that I declare that as income so it is therefore taxed and/or regulated. I face similar draconian penalties for non compliance if caught to the leeches of society listed above. I guess that makes me a tax paying leech too.

    Well, you are unfortunately encouraging them. In some places, they have signs up saying we shouldn’t feed ravenous predators.

  16. Jumpnmcar

    I’ve got an ABN and a registered business name.
    What else do they need, now?

    Exactly, nothin, you’re in it now.

  17. Jumpnmcar

    Struth

    Your registered by a State Government I assume ?
    It’s just the Fed want to take over the States shit again.
    I hope it’s Unconstitutional but I can’t find grounds.

  18. Art Vandelay

    They are floating the idea of an “Australian Business Licence”, i.e. that anyone who wants to establish any business whatsoever has to apply to the government for permission, and satisfy any criteria that the government seeks to impose.

    Speaking of, I saw a great quote on this issue earlier today:

    Licensing: when the government takes away your right to do something, then sells it back to you.

  19. Tim Neilson

    I’ve got an ABN and a registered business name.
    What else do they need, now?

    They’re suggesting (and it is only an idea at present) that in order to get an ABN – essentially a prerequisite to having a business – you’d have to pass some sort of government test of your fitness to run a business.

    Brought to you by the people who gave you pink batts, BER and the NBN.

  20. John Bayley

    The “Black Economy Task Force”

    Aren’t they the geniuses that also proposed that Australia should either phase out cash altogether, or at least the government should chip $50 and $20 notes, so they could track how they are spent, and if need be potentially cancelled?
    Just great ideas all around…
    If only the Soviet commies had today’s technology at their disposal, they would have surely made communism work! /sarc

  21. True Aussie

    David once again shows why libertarians are a laughing stock. Zoning laws exist for a reason dumb arse. Industry regulations exist for a reason too. If David wants to live in a country with no zoning laws and no industry regulations then he can move to the Congo. As for me I will happily put up with regs and zoning laws if it means that the apartment I buy does not suddenly have an impromptu hotel open up above it or the car acting as a taxi actually has the proper insurance if it runs into me.

  22. DeanG

    David once again shows why libertarians are a laughing stock. Zoning laws exist for a reason dumb arse. Industry regulations exist for a reason too. If David wants to live in a country with no zoning laws and no industry regulations then he can move to the Congo.

    Not great comprehension skills there “True Aussie”. At no point in the article does David talk about zoning laws or industry regulations. Every comment is pretty much about new taxes to dissuade competition and prevent new business models from emerging. The incumbents who have been protected for decades by the high cost of entry due in large part to the regulatory frameworks that act like regulatory tariffs. Now technology makes those regulatory walls a disadvantage rather than a protective barrier. Maybe if you want to deny technology and competition you should move to the Congo.

  23. BoyfromTottenham

    Question: if Uber or AirBNB were based in NZ rather than the US would our governments have rolled over and legalised their business models that were previously illegal in Australia?

    Interesting fact: As I understand it, US law prevents the extradition of US citizens to another country for financial crimes. Think about it.

  24. .

    Oh yay, zoning laws. They don’t need to exist. At all. If you buy near a piggery and it stinks, this is your fault.

    They’re not going to build near you UNLESS the land was zoned for that anyway and you bought a cheap house…zoning laws are as dumb as banning people building in flood prone areas. Make them responsible for their own loss.

    The idea that residential properties are going to be cheaply snapped up for a piggery…just fucking dumb.

    The fact is the haphazard development you see in the Congo etc is because of insecure property rights.

    “Industry regulation” is so broad it encompasses knowledge and practical tests for surgeons, to having a Cert II. in pool cleaning or stop./go sign holding.

    Nevertheless stupid and praised by stupid people – insurance can sort it out. If you get surgery done by an unlicensed doctor your insurer won’t cover you for…once again, dumb people wanting society to subsidise their loss for their stupidity.

Leave a Reply

Your email address will not be published. Required fields are marked *