Penalty rates debate heats up with ARA calling for action on weekend and public holiday pay

The Australian Retailers Association has thrown its voice behind calls for immediate action to reduce penalty rates in the face of high youth unemployment figures.

The debate was reignited last week by Liberal backbencher Alex Hawke who called for weekend and public holiday penalty rates to be reduced, as reported by the ABC.

Prime Minister Tony Abbott has previously ruled out lowering or abolishing weekend penalty rates during his first term and has promised to set up a Productivity Commission inquiry into industrial relations. As it currently stands, any recommendations the Government supports from the inquiry will be taken to the next election.

However business groups are calling for changes now. Last week the Australian Chamber of Commerce and Industry’s (ACCI) praised Hawke’s comments and said waiting for the Productivity Commission recommendations would delay action needed to combat youth unemployment numbers.

In July 2014, Australia’s unemployment rate was 6.4 per cent and for people aged 15 to 24 it is 14.1 per cent, the highest youth unemployment rate since October 2001.

An recent analysis of Australian Bureau of Statistics data by the Brotherhood of St Laurence found more than 580,000 young Australians are now either underemployed or unemployed. Overall, this represents more than a quarter of 15 to 24 year olds in the labour market.

“You can’t have unemployment at a twelve-year high, with the youth jobless rates double the national average, and not be concerned,” ACCI CEO Kate Carnell said in a statement last week.

“It is not good enough for the government to look at penalty rates via a productivity inquiry later in the year, and then take recommendations to the next election.

“We have a crisis now. That’s just too slow.”

Today, ARA executive director Russell Zimmerman said reducing penalty rates is a crucial step in creating higher levels of employment for Australians.

“There’s no denying the fact that retailers would employ more staff if they did not have to pay penalty rates. SME retailers in regional areas in particular, who do not currently open on Sundays, would definitely consider their options if penalties were reduced.

“Retail staff in regional areas do not usually have the opportunity to work on Sundays and a lower penalty rate would mean these retail employees would have the opportunity to work extra hours. We cannot ignore the major benefits for all involved, including additional hours retailers will be able operate, if penalties are reduced.

“Seeking to be the voice of reason, the ARA is not calling for penalty rates to be abolished but there is a strong need to get the balance right so that retailers can operate competitively on weekends and offer increased employment opportunities,” Mr Zimmerman said.

Guy Nichols, owner of Muswellbrook Betta Electrical and Scone Betta Electrical in regional NSW told Appliance Retailer that he was happy to see penalty rates remain unchanged.

Nichols’ stores don’t open on Sundays, a decision based on slower weekend trade rather than penalty rates.

“We tend to find being a country retailer that weekends and particularly public holidays a lot of people tend to leave town to more coastal or tourist areas. We don’t have a big weekend trade as the metropolitan stores would.

“We are probably happy to see penalty rates remain the same. We are in an area which is predominately mining so we are competing with high incomes anyway and a lot of the associated businesses around town are generally paying above award wages anyway because it’s a high income area,” he said.

Nichols said that the case is probably different for other stores that have a higher weekend patronage but, being regional, their chosen trading hours meant penalty rates didn’t affect them as much as some of the major players in metropolitan areas.

Would you like to see penalty rates for weekends and public holidays lowered? Tell us in the comments below. 

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