As businesses around the country lick the wounds inflicted on P&L by the Easter weekend, the debate around penalty rates continues to brand employers the ‘bad guys’.
In terms of public opinion, the problem would largely appear to stem from the misconception that hospitality and retail businesses enjoy huge profit margins.
Member surveys by the likes of the AHA ACT and TAA found around two thirds of hospitality businesses would be forced to either close or drastically reduce hours over the four-day Easter weekend, with more than half of businesses expecting to make a loss and only 13 per cent expecting to trade in the black.
And yet, a social media campaign by the Australian Chamber of Commerce and Industry (ACCI) that encouraged small businesses supporting a review of penalty rates was ambushed by unionists and righteous idealists.
Encouraged to download and display A3 posters featuring the line “But the penalty rates are too high. Tell Canberra something has to change” some businesses involved were persecuted on Twitter and Facebook, with posts such as “If you can’t afford to pay fair wages, you shouldn’t be in business” and “I prefer to dine at quality places not places run by scrooges”.
ACCI chief executive Kate Carnell told SmartCompany businesses were “bullied and intimidated” by unionists and people that obviously did not fully understand the issue.
“I have to say, some of the behaviour was just unacceptable. I have no trouble with people on Twitter having a go at me or at ACCI, we’re fair game, but what is not fair game is a small business just wanting to be heard.”
Carnell went on to suggest people should realise what paying penalty rates around two and a half times normal casual rates does to businesses that typically budget for wages as around 30 per cent of costs.
Hotel operators around the country admit to being forced to work many more hours themselves to make trading viable for the business, leaving young workers at home unemployed.
Meanwhile, Unions maintain their mantra about public holidays depriving workers of precious time off to spend with their families. It’s true this was the fundamental basis upon which the penalty rates system was created – more than a century ago.
In today’s economy, the multiple rates are being enjoyed by casual workers, often in first job and part-time positions, and unlikely to be a sole bread winner struggling to find time with family.
“It is important to remember we’re not arguing for no penalty rates, just signalling current penalty rates have moved on from a time when opening on a public holiday was an unusual thing to do,” says Carnell.
This was highlighted by TAA Director Carol Giuseppi, who says high penalty rates in fact adversely affect a lot of workers.
“Penalty rates of 275 per cent actually discriminate against workers as much as they do employers, because if a hotel closes a restaurant or cuts back on service, the worker – for whom working on weekends or public holidays often suits their circumstances most of all – doesn’t get the opportunity to work.”
Finance publication Business Spectator goes even further, suggesting penalty rates and red tape from the ATO is driving the continuous expansion of the cash economy, as employers and employees are forced to strike under-the-table deals to circumvent the dilemma.
It criticises the review of the tax system for not addressing this issue and highlights an increasingly sophisticated cash economy’s ability to ‘cook the books’, drawing comparison to economic rodeos such as Greece, Spain and Italy.
Sadly, despite recommendations by the Product Commission, the flailing Abbott Government recently dismissed the subject of a review of penalty rates in a somewhat transparent attempt to regain lost support from the lower socio-economic community.
Perhaps the solution is for Government to give businesses a holiday from tax and let a competition-hungry public enjoy the services of hospitality businesses stocked with highly paid and happy young workers.
