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.