Observing that all our cleaning industry sectors – including large and small contractor employers, cleaners and the product supply chain – are losers in today’s ‘race to the floor’, the Australian Cleaning Contractors’ Alliance’s (ACCA) John Laws has again called for a united front.
In his January ACCA Update bulletin, Laws presents a troubling assessment of today’s cleaning service sector but, unfortunately, he is very much a lone public voice – apart from United Voice – in calling for change. INCLEAN believes his copy deserves to read in its entirety and is presented here un-edited.
The cleaning industry as a whole has to make a concerted effort to work together. By this I mean it’s time for the Building Service Contractors Association of Australia (BSCAA), National Cleaning Suppliers Association NCSA), Australian Cleaning Contractors’ Alliance (ACCA) and all others involved to get together and work on a concerted programme of public relations and advocacy designed to promote the industry as a valuable, effective, and necessary service which needs to be paid adequately and promptly.
The cleaning industry ended 2013 in the same way as in previous years. Everybody complaining prices are too low, the Government is ripping them off and the future looks bleak.
And, as usual, the bosses went off on their overseas holidays while the cleaners were left to clean up the mess left behind by people attending the Sales.
There have been a number of high profile failures in the last 12 months and there will be more in the coming months as everybody fights for the right to win the race to the floor.
It just amazes me how the big guys try to compete with the little fellow for work they will never be able to carry out competitively.
Major issues
The simple fact is there is still room for everybody in our industry but we have two sections working, un-happily, together bringing about a disaster for the whole industry.
On one hand we have established companies trying to get all the work they can, at, seemingly, any cost.
On the other hand we have a group of ‘smart’ migrants from many different lands who know little about the legal requirements of this country and don’t care about them and who are prepared to operate outside or on the fringes of the law to obtain work at ridiculously low prices and then pay some battling new arrival at unfair cash prices.
This practice makes it hard for an honest operator to compete and it exploits those new arrivals looking for a chance in their new country.
The result is the big boys lose money hand over fist because their pride is injured and the poor little person, new to the country, is ripped off fiercely by his own countrymen.
In the end pricing is forced down, a new expectation is delivered to the client and governments are unable to collect their due taxes.
Everybody is losing
To make it worse, I believe the Federal Government introduced a requirement a couple of years ago that anybody employing more than 20 persons must establish and maintain a Trust account into which all
Annual Leave, Loading and Long Service Leave entitlements are banked separately for all employees. This piece of Legislation has not yet been enforced but I hear that Audits by the ATO will include this requirement in 2014.
Now I know this will be the most troublesome matter to impact the cleaning and Security industries for some years as they all depend on cash flow, and pay entitlements as they occur. To have to find money to place in a Trust account will send many more to the wall or force them to visit the Subcontracting for cash crowd sooner rather than later.
Advice for contractors and suppliers
Advice under these circumstances is simple. Get together with your fellow contractors or suppliers through your industry body and immediately demand a return to the days of payments at seven days, and no later, from the end of the month. At present many clients pay at 30, 45, 60 and 90 days. This is simply not accept-able, and the industry as a whole has to enforce reasonable payment conditions. If you are running an overdraft the interest payments will ruin your profit and there will never be enough left over to fund further growth.
The future
The cleaning industry as a whole has to make a concerted effort to work together. By this I mean it’s time for the BSCAA, NCSA, ACCA and all others involved to get together and work on a concerted programme of public relations and advocacy designed to promote the industry as a valuable, effective, and necessary service which needs to be paid adequately and promptly.