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Like for Like Hot Water Service Replacement

Like for Like Hot Water Service Replacement

In Queensland, if you see online bunnings hot water service price beat guaranteewebsite  prices or are quoted over the phone a price for like for like hot water service replacement for an electric or gas storage tank¹ system, don’t believe one word of it. The prices are a sham designed to scam you into calling them to book in the job.

I can 99.9% guarantee² you will not receive that price for a legally compliant hot water service replacement issued with a QBCC Form 4 compliance certificate.

The pricing and terminology are deliberately deceptive and are a scam. I will categorically state the prices are absolutely bullshit and lies.

Going back over ten years ago yes all plumbers undertook like for like hot water service replacement when replacing electric or gas storage hot water tanks. Simply this was legally compliant at the time and accepted industry practice.

The pricing and terminology are deliberately deceptive and are a scam. I will categorically state the prices are absolutely bullshit and lies.

Going back over ten years ago yes all plumbers undertook like for like hot water service replacement when replacing electric or gas storage hot water tanks. Simply this was legally compliant at the time and accepted industry practice.

What is like for like hot water service replacement?

“Like for like” installation is frequently seen as the basis of pricing on websites as a starting point for pricing for replacing your hot water system. They usually use confusing terminology stating that the pricing is starting from what is a low price for a like for like installation. They then vaguely define like for like as being for replacing the hot water system where it is:

  • the same type of hot water system as the old hot water system
  • that the hot water system is being installed in precisely the same location as the old hot water system
  • that the new hot water system is the same size as the old hot water system
  • that the new hot water system has the same electrical requirements as the old hot water system

Of course, it’s not explained clearly like I have using sixty-seven words.  Instead, they tell all of that in one compressed vague sentence of thirty-four words.

And naturally, there will be getting out of gaol clauses that are again vague and confusing. These clauses will state that other costs may be incurred because:

  • you have individual site installation requirements to ensure your like for like hot water service replacement is compliant with all regulations
  • if you require any additional valves installed that were not in the like for like scope of works
  • if you request removal and disposal of the old hot water service
  • if you require a new concrete slab or support base
  • if you need any additional piping to be installed
  • if you require any additional electrical wiring or any electrical work other than disconnecting and reconnecting
  • any work what so ever that is required to the existing plumbing, electrical or gas infrastructure to ensure your like for like hot water service replacement is compliant with the council, state or commonwealth regulations
  • any additional labour or equipment required due to site access conditions

All of the above are standard requirements on any hot water system replacement to meet the legal requirements of the Plumbing and Drainage Act 2018 and the Plumbing and Drainage Regulation 2019.

The whole reason all of the above and many more possibilities are excluded from a like for like hot water service replacement offer is to fool you.

Ultimately every existing hot water service installation has individual requirements when installing a replacement hot water service.  That is why a website price or a quote over the phone is meaningless.

You can only ever get a correct price for replacing your old, leaking hot water service after a comprehensive site inspection. In the small print on all websites that quote like for like replacements they almost always state somewhere that pricing may change once their plumber undertakes a site inspection.

The photo on the right is a Dux 50 dux 50 litre electric hot water servicelitre electric hot water service that has been replaced like for like. Except it is utterly non-compliant because:

  • the hot water pipes are not insulated
  • the relief valve is not insulated
  • there is no pressure reduction valve
  • there is no cold-water expansion valve
  • there is no tempering valve
  • as it is an internal installation, there is no hot water tray to contain water leaking from the tank, pipes or valves
  • there is no automatic shutoff valve to cut off the water should there be a leak
  • there was no QBCC form 4 given to the property owner

There is no such thing as a like for like installation. There is definitely no such thing as an exemption for a QBCC Form 4 compliance certificate if you are only undertaking a like for like installation.

What is required to replace a leaking hot water service?

If your hot water service is leaking and requires a replacement then in all likelihood it will be at least eight years old and probably much more. I can guarantee the infrastructure regarding valves and overflow drains will not be compliant with the legal requirements that we must now adhere to.

We recently replaced the nine-year-old Siddons heat pump unit in the photo on the right Like for Like Hot Water Service Replacement 3

that was no longer functioning with a CO2 Smart Heat Pump hot water unit. Even though it was only installed nine years ago, it was utterly non-compliant with the current requirements.

Since 1 July 2019 every hot water service whether its a new installation or a replacement installation must be installed in complete compliance with AS/NZS 3500.4:2018 Plumbing and Drainage Part 4: Heated Water Services.

This standard, along with several other standards, is called into law via the Plumbing and Drainage Act 2018 and the Plumbing and Drainage Regulation 2019.

The installation of a new or replacement hot water service must comply absolutely with the standard and in particular Section 5 Installation of Water Heaters – General Requirements. The scope of this section states explicitly: This Section sets out general requirements for the installation of water heaters, their location, support, cold water service valves, the vent or drain lines, and the first 2 m of heated water supply piping.

This section sets out exactly how all hot water service installations must be undertaken. Nowhere does it refer to a like for like hot water service replacement.

No professional, reputable plumber will quote you on a like for like installation as they know it does not exist. Companies who market on this basis are engaging in deceptive and misleading marketing to get their foot in your door, so they can then upsell you.

Any plumber who starts telling you that you can get a lower price with a like for like replacement is simply a liar.

Every hot water service replacement must have a Form 4 compliance certificate lodged with the QBCC and the appropriate fee paid. Ultimately this is for your protection as compliantly installed plumbing, and drainage installation is about protecting your health.

Replacing a hot water service does not involve guesswork it’s about merely obeying the law and being compliant with the Plumbing and Drainage Act 2018. If you have had your hot water service replaced as a like for like replacement you need to report it now to the QBCC as an offence complaint. The plumber who undertook the installation will be required to return and complete the installation in compliance with the Plumbing and Drainage Act 2018 at his cost.

If you are uncertain about your hot water service replacement or need assistance contact us on (07) 5551 5193 and we will give you our opinion on how to proceed.

¹ : Replacing an instantaneous gas hot water unit is frequently like for like as it is a straight disconnection and reconnection to the gas connection and to the water pipes. In most instantaneous units, there is no need to install or replace valves as all management of temperature is undertaken in the unit.

² : The only time I have seen a compliant like for like replacement is when a faulty hot water service has had to be replaced within the first 12 months after installation and was already fully compliant. This is a genuine like for like replacement under the manufacturers guarantee where the client pays nothing and where everything concerning the plumbing and electrical infrastructure was already compliant.

Plumbing Rip Offs

Plumbing Rip Offs

Plumbing rip offs, in my opinion, are frequently emotive exaggerations bereft of facts from people whose only motive is not to pay their plumbers bills.

Sadly most plumbing rip offs are perpetuated not on the customer but on the plumber by other plumbers who stupidly aid and abet con artists using them without any payment to condemn work another plumber has undertaken.

Every week we get multiple phone calls virtually demanding that we condemn over the phone other plumbers work or for us tell them that they have been overcharged. Of course, they never wish to pay for this advice and never want it adequately investigated.

Unfortunately, far too many plumbers are completely gullible and get sucked into agreeing with unsubstantiated, exaggerated statements over the phone from someone they have never met. For some bizarre reason, they think by agreeing with baseless opinions from an unqualified person that they will get work from it and even more bizarrely get paid for it!

Despite what some non-plumbers think plumbing is complex in its entirety requiring in-depth knowledge and precision. With the dominance of Google, it is effortless for someone to create a cheap website and make a raft of promises usually based on how cheap they are.

“No call out fee! Free quotes! No service charge! Free plumbing audit! Free gas inspection! $0 call out fee! $40 off today! $99 drain special! Free plumbing quotes!” And so the list goes on when you Google the term “plumber Gold Coast”. All of these “promises” create the perception that you are getting something for free or at a considerable discount.

The often-quoted “There is no such thing as a free lunch” is applicable in this situation. Obviously, it means nothing is ever truly free because the fact is someone has to pay for the plumber to come to your house or business. All of those above claims are designed with the sole purpose of getting you to ring that plumbing company and nothing else. I guarantee you will be paying for them to come out one way or another.

You should know it costs money for a fully equipped and staffed plumbing truck to arrive at your home or business. Some companies will charge a call-out fee which allows for no work. Some companies such as Whywait Plumbing will charge a diagnostic fee which provides for a preliminary investigation of the plumbing problem. Some companies will charge a minimum one hour fee no matter how long they are on site. Some companies offer a free call out, but it will be built into all their costs so beware of all free call out offers as generally, all their other prices are higher.

You are ripping me off because Joe Bumcrack Plumbing Service is half your price

In the last 42 years, I’ve heard multiple variations of this excuse for not paying an account countless times.

Buyers regret is a constant issue for all businesses. I remain bewildered by people who turn to the bottom feeders of our industry and turn them into experts. These hobby businesses are frequently referred to as Joe Bumcrack plumbers for obvious reasons. Of course, Joe Bumcrack’s phone wasn’t answered, and he wasn’t available at 10 pm on a Saturday night to clear the blocked drain. But of course, his word counts because he told the customer what he wants to hear concerning what price should have been charged and plumbing rip offs.

The reality is half the price of what? We have never been interested in being the cheapest Gold Coast plumber. We are not interested in what other plumbers charge because every business differs regarding cost structures, overhead costs and productivity levels that are utilised to set a selling price for a businesses services.

Notwithstanding the urban myth that there is a “going rate” or “recommended rate”  for plumbers, it is illegal under the Competition and Consumer Act 2010 for business to collude in setting prices or for there to be any set or recommended rates by master plumbers associations.

Here at Whywait Plumbing, we take pride in our industry best practice service levels. We endeavour without exception to deliver quality workmanship with expertise and long-lasting permanent solutions to complex plumbing problems that are fully compliant with the legal requirements in the Plumbing and Drainage Act 2018.

A recent e-mail I received with the following quote from Benjamin Franklin, “The Bitterness of Poor Quality Remains Long After the Sweetness of Low Price is Forgotten” always applies, and that is the lowest price is not still the best. With plumbing problems, they are frequently reactive, and the practice of going back after the job is completed to Joe Bumcrack Plumbing Services for his expert opinion on what work should have been undertaken is counterproductive as you are not comparing apples with apples.

Plumbing is like everything else with a plethora of solutions, methods and opinions to solve problems. This, in turn, creates multiple pricing solutions if you do not specify exactly what products you want installing with the result is that you require. We accept that our customers are often in a situation where they are choosing between the price we must charge versus the quality of the service.

More and more, we are seeing where a customer has researched what he should budget for a job via Google and on websites such as Bunnings. The reality is they don’t have the expertise or knowledge to undertake the research, so end up with a superficial answer. This research then becomes the driving force in determining the price they think they should pay for our service.

It is our experience over 42 years that many clients fool themselves or their employer in choosing the lowest price service to fit within a budget that was flawed from the start. Typically this results in budget blowouts in the short term as the lowers quality service, and products have to be replaced long before they should have been.

Equally, the highest price does not always mean the highest quality service. Frequently the highest price and the lowest price for service are due to inefficiencies in the service delivery combined with there not being a specifically tailored specification.

When you are assessing a company to provide service delivery, please ignore Joe Bumcrack Plumbing Services and their constant cry that all their competitors are involved in plumbing rip offs. The ability of companies such as Whywait Plumbing or Oceanside Plumbing or Waterfox Plumbing to meet your service and business requirements should be paramount in decisions. Equally successful past performance is just as critical to ensuring quality service and installation take precedent over the enticement of a low priced service delivery.

What’s your hourly rate?

No legitimate business works on hourly rates. The reality is most businesses charge a set price for a set service task. Even in the construction industry businesses such as tilers and plasterers charge per m² or brickies per 100 or 1000 bricks laid.

The exception to this is far too many plumbers and electricians who won’t invest in quantity surveying software and the time to create task based pricing. As a result, we have many Joe Bumcrack plumbers who work on hourly rates that do not cover the cost of wages and accuse all their competitors of engaging in plumbing rip offs. Even for a solo operator plumber or electrician, their break-even points will be between $100 – $150 per hour depending on their overhead costs. So if you engage a plumber who is telling you their hourly rate is $80, then you can guarantee they will be doubling up somewhere or charging for services that are not delivered.

Hourly rates are a meaningless component in the overall service cost being utterly subjective to the point of being meaningless.

I’m well aware many people think an hourly rate for a plumber in excess of $100 is a plumbing rip off and extortinate. This is why hourly rates are meaningless because within that price countless expenses have to be covered such as wages, superannuation, workcover, fuel, insurance, vehicle repairs, equipment repairs and replacement, travel time and so the list goes on and on.

I can only repeat that labour is only one component of the cost when working through a task cost in quanity surveying software. The other components are overheads, materials and equipment.

Plumbers who charge using hourly rates frequently engage in charging base to base travel time or charging for apprentices who are really goffas or for making multiple trips to the merchants for materials

Just give me a ballpark price over the phone

I repeat incessantly that no professional plumber can give you an estimate over the phone. Solving plumbing problems over the phone with any degree of certainty is an absolute impossibility. Every plumbing problem is entirely variable and can change rapidly once you start working on it.

The most common price we are asked for over the phone is for replacing a hot water service. Sadly many plumbers will indulge people and give costs for replacing a hot water service over the phone based on “Like for Like” installation. This is utterly deceptive as there is no such thing as a like for like installation. Every replacement installation must be done in accordance with ASNZS 3500.4:2018, which requires substantial upgrades on the original installation which is frequently over ten years old. Of course, once they get on-site, they discover you need all sorts of extras such as valves, insulation and drain installation.

Always require that the plumber comes to the site and gives you pricing after a thorough site inspection. Even then that can change as often once you start on the job, you can get a myriad of faults to show up that cannot be detected by a visual inspection.

How long does a bathroom renovation take?

How long does a bathroom renovation take?

Television renovation shows are not reality when it comes to a bathroom renovation. Sadly that’s the benchmark too many people use when they call us to discuss a bathroom renovation. We always know when a client phones and asks “how long does a bathroom renovation take” that they will have unreal expectations.bathroom renovation by Whywait Plumbing

The reality is that a well-planned bathroom renovation will take at least 4-6 weeks. A poorly planned bathroom renovation takes forever and is the most frustrating experience for everyone.

Your bathroom is one of the most expensive rooms to renovate and will need to last you at least ten years. What is hugely fashionable today will not be in two years.

A bathroom renovation is never straightforward and is all about planning, planning and more planning.

Get A Professional Design

There is a multitude of online tools that make designing a bathroom look easy. The reality is that doing your own design can be a false economy.

Getting the floor plan design right from the beginning is your number one priority. I guarantee it will save you money in the long term. A professional bathroom designer will ensure you get what you want. Everyone else involved with the bathroom renovation will be able to give you precise costings based on the design plans.

Remember it’s your bathroom so don’t be intimidated by a bathroom designer. Work with their suggestions and opinions to get the bathroom you want.

Relocating Plumbing is Expensive

bathroom renovation relocation of plumbing by Whywait Plumbing

relocation of plumbing starts with exploration to discover where the drains are hidden in walls

If you have a concrete slab, then relocating water pipes and drains is expensive. If you have a wooden floor and can get under the house, the relocation of your plumbing is much simpler.

In our experience, the unnecessary relocation of drains frequently causes budget blowouts. Utilising your existing plumbing layout will significantly reduce the cost of your bathroom renovation.

Even marginal changes can cause a budget blowout because the plumbing located in the concrete slab can be vastly different once we start exposing it.

As I said, a wooden floor where there is access to the plumbing underneath is a vastly different proposition because all of the plumbing is visible. This gives you much more scope in your bathroom renovation to rearrange the layout of your fixtures.

Draw Up a Specification

a bathroom renovation involves demolishing the existing bathroom by Whywait Plumbing

demolishing your existing bathroom creates a mess very fast

A precise specification of what you want in your bathroom renovation will save everyone a lot of heartache and frustration once work begins.

Project managing your bathroom renovation is not hard providing you have clear floor design plans and precise, unambiguous specifications.

Checklists are a must for your budget peace of mind for the tiler, electrician, plumber, plasterer and painter. This ensures everyone knows what their tasks are and where they stand from the beginning.

If it’s not written down, then you can guarantee you will get a continuous flow of variations that will blow your budget to pieces.

Avoid Reusing Parts of Your Existing Bathroom

The best way to renovate a bathroom is to strip everything back to the bare floor and framework. Keeping parts of your existing bathroom defeats the purpose of having a brand new bathroom.

We frequently see clients keeping the existing ceiling, but it saves very little and is frustrating working around it to install new lighting and extraction fans.

Reusing bathroom fixtures such as the mixer taps or toilet suite or bath save little as it means we have to remove them, clean them up and reinstall them carefully. All you are saving on is the cost of the fixture, which these days is often marginal.

Use Quality Fixtures and Fittings

luxury bathroom renovation by Whywait Plumbing

Opting for cheap no brand plumbing fixtures will lead to future maintenance problems. Frequently if there is no manufacturers brand name visible, then the plumbing fixtures are a poor quality that will not last past a couple of years.

There are plenty of quality taps and toilets that will not squeeze your budget. Avoid fashionable colours in taps as in my opinion chrome never goes out of fashion and always cleans up well.

Investing in good quality custom built vanity cabinets will give you much more value and aid the functionality of the bathroom. Investing in a quality frameless shower screen will again support the functionality of the bathroom.

Planning is the Answer

As I said, previously, the key to a bathroom renovation is about the preparation. A well-planned bathroom renovation with precise specifications ensures that the work requirements are clear and everyone will happily fulfil their obligations.

Does Your Insurance Cover All Water Leaks?

Does Your Insurance Cover All Water Leaks?

Here at Whywait Plumbing, we frequently get a phone call asking does insurance cover water leaks? Every week we are called upon to deal with insurance companies or assessors on behalf of clients when they have sustained water damage to their home.

does insurance cover water leaks in walls With water leaks just like everything else to do with insurance, there seem to be multiple grey areas with numerous interpretations. It is our experience we find every time we deal with an insurance company where the circumstances of the water leak are similar to previous we meet with a different response.

The product disclosure statement issued with your policy is where we find all the confusion starts. This is where the insurance company hopefully discloses what is covered by your policy. If you find the product disclosure statement confusing then call the insurance company to clarify what the coverage is that you are paying for. The more questions you ask, the more you will understand. Remember there is no such thing as a stupid question. Also, remember insurance companies record all calls, so keep diary notes of when you called and who you spoke to. Better still send them an email confirming your phone call and what your understanding was of the answers you received. This creates an electronic paper trail that can be utilised at a later date.

Important Definitions & Clauses

There are three important definitions and clauses which appear to apply to the question does insurance cover water leaks:

  • the “Water Damage Clauses” in the actual policy
  • the definition of what is water damage
  • the definition of what is gradual water damage

The Water Damage Clauses

The water damage clauses you should always read carefully and ensure you understand. Generally, it will have a section with several clauses and subclauses in the policy which will cover water damage and what you can claim for if you make a water damage claim on your home.

As a rule, it will state precisely what water damage your insurance policy covers and what is excluded. The exclusions are what you need to be aware of as often they will include an all-encompassing negligence clause coupled with a failure to maintain your home in good repair. If you have these general all-encompassing clauses, ask your insurance company what they precisely mean as we’ve seen these clauses used to deny coverage where it was in a very grey area and open to interpretation in their favour.

The Definition of Water Damage

does insurance cover water leaks caused by stormsWater damage can occur in so many ways that it’s generally not well defined in your insurance policy. In our experience, insurance companies specify water damage in two ways:

  • accidental or sudden water damage
  • gradual water damage

We’ve found that instances such as burst pipes, burst taps, burst valves, overflowing sewerage, overflowing stormwater and storm damage are covered by most insurance policies. This is because it was a sudden event that you could not have prevented.

In contrast, the damage caused by slow plumbing leaks in pipes, showers, toilets, gutters and roofs not damaged by a storm is not covered as they are classified as gradual water damage.

The Definition of Gradual Water Damage

Essentially gradual water damage is the insurance policy get out of jail free card. It is water damage they assess has occurred gradually over time. Frequently the water damage was visible to the trained eye but invisible to you as it covers the rotting of timber under the paint or mould in the walls, floor or ceiling. Essentially the insurance company will conclude you were negligent in not maintaining your home.

Examples of gradual water damage we frequently see are:

  • seepage from leaking taps into cupboards
  • leaking shower trays
  • leaking shower taps
  • leaking toilet cisterns
  • leaking drain pipes
  • rusted out sections in gutters and roof

The water damage from many of these occurrences is often not covered by your insurance policy as it will be concluded you failed to keep your home in good repair through regular and reasonable maintenance.

Water Leak Prevention

The best way to avoid an unsuccessful water leak claim is regular maintenance by Whywait Plumbing. Now this will not prevent every possible water leak scenario happening, but it will demonstrate to the insurance company that you have been undertaking regular maintenance.

At Whywait Plumbing, we see instances every day of water damage that has occurred through the failure to maintain your home regularly. That is why we recommend all our clients to become a Service Partner and enjoy the VIP benefits of having a Service Partner Plan to maintain your most valuable asset, your home, proactively.

False Claims on Flushable Wipes Result In $700,000 Federal Court Fine

False Claims on Flushable Wipes Result In $700,000 Federal Court Fine

Back in September 2015 we here at Whywait Plumbing first alerted our clients in newsletters and blogs to the fact that flushable wipes were in fact not flushable. At the time we said flushable wipes are an environmental nightmare and we stand by that claim.

We have repeated over and over again that the only things that are flushable in your toilet are toilet paper, urine and faeces or if you like to adhere to the three P’s rule of pee, poo and paper.

But as we all know a multitude of products labelled as flushable wipes or wet wipes have been claimed by their manufacturers that they could be simply disposed of by flushing down the toilet.

Federal Court of Australia fined Pental Limited for false claims about flushable wipes after campaigns by Whywait PlumbingLast Thursday the first of the ACCC prosecutions against manufacturers Pental and Kimberly-Clark Australia had a positive result in the Federal Court of Australia.

The manufacturer of White Kings flushable toilet and bathroom cleaning wipes Pental Limited and Pental Products Pty Ltd was fined $700,000 for its continual false and misleading claims that their products disintegrated “just like toilet paper”  in the sewage system.  The ACCC has separate ongoing proceedings against Kimberly-Clark Australia.

White Kings products in labelling, packaging and promotional materials included the following misleading statements:

  • flushable
  • White King Toilet Wipes are made from a specially designed material, which will disintegrate in the sewage system when flushed, just like toilet paper
  • Simply wipe over the hard surface of the toilet … and just flush away

The Federal Court ruled all these statements were, in fact, false with ACCC Commissioner, Sarah Court stating, “These White King wipes can’t be flushed down the toilet, and Australian wastewater authorities face significant problems if they are because they can cause blockages in household and municipal sewerage systems.” 

This is a huge win for the sewers and house drains where blockages have been an ongoing issue creating $16000 plumbing repair bills for homeowners.

Here in Queensland Michelle Cull from Queensland Urban Utilities said it was a “real win” for sewers as “We remove around 160 tonnes of flushable wipes from our sewerage network every year. Laid end-to-end, that’s enough to stretch all the way from Brisbane to Bali. We spend around $1.5 million a year clearing blockages from our sewer pipes and flushable wipes are a big contributing factor.”

flushable wipes Shonky Award supported by Whywait PlumbingThe campaign by Choice against flushable wipes has been an outstanding success. In 2015 Kleenex flushable wipes were an outstanding winner in their 2015 “Shonky Awards” which we highlighted in Flushable Wipes Win “Shonky Award” from CHOICE at the time.

On Thursday after the Federal Court, decision Choice spokesman Tom Godfrey reiterated that the false claims about flushable wipes were a “grubby marketing tactic that left households, local councils and water services organisations having to struggle with the cost of removing these wipes from the sewage system”.

The $700,000 fine is a positive message to manufacturers and the water industry and plumbers are now hopeful the manufacturers of wipes products now prominently label DO NOT FLUSH on all their products.

The $700,000 fine also sends a positive international message as the water industry worldwide has collectively committed to a position statement where all wipes and personal hygiene products must be clearly marked DO NOT FLUSH and that they can only be disposed of in the rubbish bin.

Here at Whywait Plumbing, we hope this $700,000 fine reinforces to everyone that any wipe product is never flushed down the toilet. I can only repeat if you wish to continue flushing wipes in all their forms down your toilet then I recommend you become a Whywait Plumbing Service Partner.

Tradies Discounts for Cash Payments Rip Off Everyone

Tradies Discounts for Cash Payments Rip Off Everyone

I’m well aware everyone loves a bargain especially with tradies giving cash discounts. We all understand household budgets are being stretched to the limit by ever increasing state government charges on electricity, car registration and water charges.

In the 41 years I’ve been in business nothing has changed in one area, and that is so many people expect substantial cash discounts if they pay tradies in cash.

The trade services sector of the economy is notorious for undercutting and giving cash discounts to clients who pay in cash.

Generally, tradies who offer substantial cash discounts are solo operators cash discounts from Whywait Plumbingwho are pocketing the cash and not paying for critical business expenses to protect clients such as public liability insurance. As a rule, they are also tax cheats which cost us all more in tax ultimately.

Cash discounts rip everyone off including yourself when you have no invoice to prove who did the work which means no guarantees if anything goes wrong.

I have lost count of the number of times I have been out to defective and non-compliant plumbing jobs where the client cannot get hold of the original plumber who did the work. Frequently this is because they have no record of who did the work as they paid in cash for the work to be done cheaply. This results in the client paying twice to have the same job undertaken and often costs much more to rectify and make legally compliant.

The ATO and the Tax Commissioner, Chris Jordon are 100% correct in saying cash discounts were ripping “billions of dollars” out of the economy that would otherwise be going to services such as schools and hospitals.

Like most other business owners I am 100% supportive of Chris Jordon when he recently issued a passionate plea to Australians to stop paying tradies in cash as the ATO confronts a host of black-economy rorts that include the fraudulent misuse of ABN’s.

cash discounts rip off everyone“Stop paying cash for a discount,” he has told taxpayers.“Because you are effectively cheating the system or helping someone else to. This is not a victimless crime. If you pay cash for a discount, in many cases you are effectively ripping off yourself as an Australian taxpayer, because this type of behaviour is what sees ­billions flow out of the tax system and into the cash economy.”

The Australian Government’s Black Economy Taskforce has estimated that the cash economy is now in excess of $25 billion a year. Simply this is $25 billion of cash transactions where no tax is paid in GST or PAYG or superannuation or company tax.

I’m well aware some people like to pay in cash but don’t rip yourself off by not getting an invoice from the tradie who has done your work if you pay him in cash. As a precaution, you should always ensure that you are getting a legitimate ‘Tax Invoice’ that has all the tradies details on it including a legitimate ABN and their QBCC contractors licence number.

It’s very simple to check an ABN to ensure it’s not a fictitious ABN. All you need to do is go the ABN Lookup and type in the ABN. It is quick and easy to do but gives you the assurance that you are dealing with a legitimate business that is paying their fair share of tax.

Every tradie must have a QBCC contractors licence and once again its very easy to check at the QBCC Online Licence Search. Remember if they don’t have a licence then you do not have to pay them.

Scarily the Black Economy Taskforce found 40 percent of ABN’s quoted where cash is paid to tradies, were the Bunnings ABN. There is no suggestion Bunnings has done anything wrong.

The old cliche that you get what you pay for will always be true. There is no need to ever pay cash despite what some tradies will try and force you to do. You should never let a tradie take you to an ATM where they sit with you watching you take out cash.

In today’s world of instant payments and it pays to protect yourself and create a digital trail.

At Whywait Plumbing we will happily take payment in cash or cheque or credit card. But we will not give you a discount for paying in cash ever as every job is invoiced correctly and paid into our bank account.

Remember at Whywait we ensure you always know the cost of your job before we start the job.

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