CUTTING PENALTY RATES NOT WAY TO BOOST JOBS
EMPLOYER lobby groups tend to argue that penalty rates make it harder for businesses to survive or to employ more people. But according to a new study by Citigroup released last week, cutting penalty rates would increase shareholder profits, result in negligible savings for customers who shop at major retailers, but result in no positive impact on jobs. While the cultural significance of Sunday as a ‘day of rest’ has changed since penalty rates were introduced in 1919, the Productivity Commission reported in its IR review last year that penalty rates had a role to play in compensating employees for working long or ‘asocial’ hours. Given the low base pay rates in retail and hospitality, and the prevalence of job insecurity and under-employment in Australia, penalty rates make up a significant portion of income for 4.5 million Australian workers. The Australian Work and Life Index reports that 37.8 per cent of workers who work weekends only and get penalty rates rely on these to meet household expenses. This goes up to 48.8 per cent for those working both evenings and weekends, and 52.2 per cent for Sundays only. If governments want to help small businesses flourish, they should cut – significantly – the company tax rate for small business, not the wages of people who are already among the worst paid in Australia.
Giovanni Torre - Reporter