“I cannot imagine a circumstance in which a monopoly provider of a product in Australia achieving a profit of 85.5 per cent on sales would not expect or deserve to be referred to the ACCC,” […]
ALEX White, Secretary UnionsACT, writes about penalty rates as Easter approaches:
This Easter, the Productivity Commission want to give working people a cut to penalty rates that they can’t afford and don’t deserve.
Working people like Bryan, who works in local hospitality and has missed spending weekends and holidays with his family and children for the past few years. Working people like Teidi, a veteran Canberra nurse, who relied on penalty rates for her entire career to put food on the table, send her kids to school, and lead a normal life.
Holidays and weekends are still special times. And the Easter holidays especially are a time that most people spend with family and friends.
For small businesses too, these public holidays are a special time. For many small businesses, especially those in retail, holiday shopping periods can make or break the year. The spending of working people in those small businesses is key to their success. Yet despite this, the business lobby still calls for penalty rates to be cut.
The economic case for these calls is nonsense. Penalty rates are an essential component of one in four Canberrans’ regular income. If the government cut penalty rates, it would reduce the take-home pay of our economy’s real job creators – working people – and therefore reduce consumer demand. Cutting penalty rates will not create new jobs, but instead force people to work longer hours to make up the income they lose.
We are constantly told, by Tony Abbott and Malcolm Turnbull alike, that we live in a 24/7 society now. That weekends are no different to any other working day. This tells you more about the particular ideology of the people making this argument, than it does reflect how modern Australia works.
Weekends and public holidays are still special. They are when, as a community and society, we spend time with family and friends. It is when parents spend quality time with their kids. Public holidays like Easter are when families gather together, go on holidays, or simply relax.
Penalty rates are the expression of this reality. They are compensation for people who have to work during unsociable hours. For paramedics and nurses working over the Easter period, for security guards or petrol station workers, for engineers at Icon Water, and for retail workers staffing the shops on Easter Sunday. These people don’t get to spend their day with their children, or their husbands and wives. And for many of these workers, penalty rates make up twenty percent or more of their take-home pay as compensation.
However, there is one large cost to small businesses that lobby groups like the Business Council, the Chamber of Commerce and even the Small Business Council never talk about.
Rental costs for small business have been in the top five most important issues for small business for years, according to numerous business surveys (penalty rates comes in tenth out of ten as an issue).
A Federal Parliament report into retail trading found that major concerns included rental reviews, the charging of outgoings to retailers and misleading behaviour by shopping centre management.
Every year, major property owners like Westfield increase rents for small businesses by four percent or more; the leases for these shopping centres require small retailers to open every day, even if there is no consumer demand. Even outside of the major shopping centres, retail rental rates remain one of the major costs of running a small business.
It is excessive costs like these that are the real cause of pressure on small businesses. Yet the business lobby never complains about this. Instead, big business tries to play off small business against their employees, while protecting the interests of major centre-owners and landlords.
In Canberra, support for keeping penalty rates is at eighty percent. It is the same around Australia. Even the vast majority of Liberal party voters support penalty rates. Advocates of penalty rate cuts like to pretend that it is inevitable. But it’s not.
And if the Government and business lobby was serious about helping small businesses, they’d be talking about unreasonable rental increases for small business, not arguing that workers’ take a pay cut over Easter.