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Claims penalty rates are killing Canberra jobs

Date

Phillip Thomson

Penalty rates are killing Canberra jobs and some businesses have already cut staff expenses after Wednesday's decision to increase the minimum wage, says the head of a major organisation representing private enterprise. 

Some territory businesses had already reduced commissions and sacked staff because of the minimum wage decision, according to ACT and Region Chamber of Commerce and Industry chief executive Andrew Blyth.

Pay for about 1.5 million of Australia's lowest-paid workers will increase by an extra $18.70 per week from July in response to a decline in their living standards after the Fair Work Commission's decision. 

"We need to start having a mature discussion around penalty rates," Mr Blyth said.

"Potentially, this is going to be a jobs killer."

He said 2.5 times the normal rate of pay for working a public holiday in retail was unsustainable and that 1.5 times the rate of pay would be more bearable. 

"Otherwise, we'll see businesses hit the wall," he said. 

"On the Australia Day long weekend, you were lucky if you got a coffee in Braddon and half the eateries in Kingston were shut.

"If we're looking to position Canberra in the global context by actively pursuing flights to and from Singapore, then we're not sending the right message."

In May, the ACT government announced there would be additional public holidays in Canberra when special days over the Christmas period fell on a weekend.

The chamber criticised this because it said businesses would be forced to pay double time and a half on two days, instead of one.  

Australian workplace laws for retail require double time to be paid for working Sundays. 

"We are a 24-7 economy," Mr Blyth said.

"The numbers of people going to church are dropping – we don't have the seven-day-a-week approach to our lifestyle any more.

"People like to shop when they want to shop."

He said small business people created jobs – "they're hirers, not firers" – and they had been feeling the onslaught from unregulated online sales from overseas companies.

Unions ACT secretary Kim Sattler said Mr Blyth's comments were part of a concerted effort by the business lobby to scare people.

"Retail is still making the same profit margin it was making before this campaign," Ms Sattler said. 

"And a lot of them are into online sales."

She said penalty rates had been in existence for generations.

"People working social hours are making a sacrifice into their own time," she said.

"[The business lobby] wouldn't dream of saying ambulance officers or firefighters shouldn't be getting penalty rates."

Ms Sattler said some retail businesses in Canberra were breaking the law by not paying penalty rates. 

As previously reported, Canberra recorded a decline in year-on-year April retail spending for the first time since the Australian Bureau of Statistics began recording monthly data in April 1982. 

Retail sales in the ACT fell to $406.3 million in April according to ABS data released on Tuesday, which was a 0.7 per cent decline on the 409.3 million posted in March. 

The April figures are the lowest sales result posted in the ACT since January 2012, but are higher than the $394 million posted in April 2012 or the $381 million in April 2011.

20 comments

  • Paying people for their time is ethical - 'fair trade'. If businesses can't afford to share a little of their profits with the people who work for them, they should not be in business.

    Commenter
    Mardi
    Location
    Tuggeranong
    Date and time
    June 06, 2014, 12:01AM
    • So they don't do business on Sundays and public holidays. They close or only use family labour. Simple.

      Commenter
      iain russell
      Location
      Singapore
      Date and time
      June 06, 2014, 1:18PM
  • Well they would say that wouldn't they.

    Commenter
    Steve777
    Location
    Sydney
    Date and time
    June 06, 2014, 12:54AM
    • Canberra has too many public servants who are paid to sit on computers all day internet shopping.

      Commenter
      Bob
      Date and time
      June 06, 2014, 5:29AM
      • What an intelligent comment. Not. What on earth has this got to do with penalty rates?

        Commenter
        What The?
        Date and time
        June 06, 2014, 8:23AM
    • A public holiday means, gasp, a public holiday. Not a holiday for some, and the rest of you get to work. Penalty rates are designed to compensate someone for missing out on that group rest day. At most, Public Holiday rates should come down to 2x, and Sunday rates to match Saturday at 1.5x - however, 'whinging' that its 'unsustainable' just paints you as someone who shouldn't be in business.

      Commenter
      Camm
      Date and time
      June 06, 2014, 7:11AM
      • The penalty rate regime harks back to a time when pubs closed at 6pm, televisions were black and white and people drank tea and observed the sabbath. I can understand why the unions would be horrified at the suggestion of reducing or abolishing penalty rates but they really are inconsistent to how people live and work in this age. Service sector employment conditions need to relate to the demands and needs of the customers.

        Commenter
        Shopper
        Location
        Canberra
        Date and time
        June 06, 2014, 7:13AM
        • Is this because it is eating into the hge 200% to 300% mark up that they apply to their prices. Please the low paid don't get paid all that much from you people and you tack it onto the end prices anyway. You buy a lot of you stuff China were wages are low mark it up 200 to 300 % and it is carp products that you sell from China anyway.

          Commenter
          Wayne
          Location
          Brisbane
          Date and time
          June 06, 2014, 7:30AM
          • Wayne, you are spot on. This is an attempt to boost profits not cut costs. I remember some years ago a vocal entrepaneur claiming that Australian printing costs forced his work offshore but when his magazine went on to retail shelves it was priced no cheaper than the locally produced publications.

            Commenter
            ephesus
            Location
            canberra
            Date and time
            June 06, 2014, 8:18AM
            • The Business Council of Australia would only express happiness if as Gina suggested people worked for $2 an hour and grovelled at their bosses feet for having a job. The fact is that we are not the US, we don't employ slave labour. We should reward people with a reasonable remuneration for their work. Many people survive through penalty rates. If they give up nights, public holidays, weekends they deserve to be paid penalty rates. We now have a society where everyone expects everything to be open at all times, including Christmas Day. Would anyone work Christmas Day if they weren't paid penalty rates. Of course people would rather spend time with their families. The business lobby, like the Abbott government appear to want the US model where people get paid almost nothing and survive on tips. An episode of a Foreign Correspondent last year showed some hospitality workers in the US were earning $2.30 per hour plus tips. Some nights if the place was empty they got no tips. How many nurses would work night shifts if they weren't rewarded? People deserve penalty rates.

              Commenter
              Arthur Scrooge
              Date and time
              June 06, 2014, 8:32AM

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