What is sham contracting in the Australian trucking industry?

Sham contracting involves classifying employee drivers as independent contractors with Australian Business Numbers (ABNs) to avoid payroll tax, superannuation, and leave entitlements.

How much of a cost advantage do rogue operators have in Australia?

Rogue operators engaging in sham contracting can have a cost advantage of 20 to 30 percent over legitimate trucking companies.

What is the current insolvency situation for Australian transport businesses?

Insolvencies for Australian transport businesses have surged by 40 percent year-on-year, with 8.46 percent closing in the 12 months to November 2025.

Home / Business and Economy / Trucking's Secret: ABNs Hide Illegal Labour

Trucking's Secret: ABNs Hide Illegal Labour

29 Jan

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Summary

Sham contracting deprives workers of entitlements and government revenue.
Rogue operators gain a 20-30% cost advantage over legitimate companies.
Insolvency rates for Australian transport businesses have surged 40% year-on-year.

Trucking's Secret: ABNs Hide Illegal Labour

Australia's road freight industry is facing a critical crisis driven by widespread sham contracting, where drivers, including those on student visas, are falsely classified as independent contractors using Australian Business Numbers (ABNs). This scheme allows operators to bypass obligations such as payroll tax, superannuation, and leave entitlements, providing them with a substantial cost advantage of 20 to 30 percent over compliant businesses. The National Road Freight Transport Association (NatRoad) reports that this systemic manipulation is crippling legitimate companies and distorting fair competition. Enforcement of these illegal practices is described as virtually non-existent, allowing rogue operators to thrive while honest businesses struggle to survive. The consequences extend to supply chain stability, with potential for increased costs, delayed deliveries, and product shortages for consumers across Australia. The sector is experiencing a severe insolvency crisis, with business closures increasing by 40 percent year-on-year as of November 2025. Experts predict these financial pressures will continue through 2026, urging businesses reliant on road transport to consider the sector a growing financial risk due to these systemic weaknesses.