Bill Shorten penalty vow ‘to cost jobs’

The Australian, June 29, 2017

Bill Shorten’s pledge to overturn penalty rate cuts for retail and hospitality workers will generate uncertainty, harm job creation and deter “mum-and-dad” operators from extending opening hours, small business chiefs say.

The Opposition Leader, who promised to reinstate penalty rates in a speech to the ACTU’s 90th anniversary dinner on Tuesday, was yesterday condemned for undercutting the authority of the Fair Work Commission and outsourcing wage ­decisions to federal parliament.

Australian Chamber of Commerce and Industry chief executive James Pearson said the Labor pledge meant small businesses were unlikely to begin capitalising on cuts to Sunday rates scheduled to begin phasing-in this weekend, undermining the full economic benefits of the FWC decision.

“Small businesses are looking forward to offering new job opportunities as penalty rates are ­reduced, but the prospect of the reductions being reversed puts those new jobs at risk,” Mr Pearson said. “Uncertainty is the enemy of doing business and hiring staff. The opposition’s plan to overturn the penalty rates reductions risks leaving small businesses not knowing where they stand.”

Mr Shorten, who previously said he would accept the decision of the industrial umpire, framed his address to the ACTU as a “call to arms” for the union movement.

“There are people who are born with money and power who resent the idea of the fair distribution of a national income, of sharing the power,” Mr Shorten said.

The Opposition Leader said “every Australian unionist has to pass on better conditions to the people that come after them, better than the conditions that we inherited in the past”.

His words were slammed by Employment Minister Michaelia Cash, who warned Labor would “destroy” small business by doing nothing to stop unions negotiating down penalty rates in deals with larger competitors, creating an uneven playing field for mum-and-dad operators.

“Mr Shorten is demonstrating contempt and a complete lack of understanding for small business operators,” Ms Cash said. “He has ­declared war on hardworking small businesses who want to ­create more jobs for Australians.”

In February, the FWC opted to reduce Sunday penalty rates across the hospitality, retail and pharmacy awards to 150 per cent for full and part-time workers and to 125 per cent for Level 1 full- and part-time employees under the fast-food award. The cuts are to phase in over three or four years.

Under the shake-up, Sunday pay packets for full- and part-time retail and pharmacy employees will be reduced this weekend from 200 to 195 per cent and to 170 per cent from 175 per cent for hospitality workers.

Affected fast-food workers will see a cut in Sunday pay from 150 to 145 per cent.

Mr Shorten yesterday also took aim at the government for removing the 2014 temporary deficit levy for taxpayers on annual incomes of more than $180,000.

“I will reverse the cuts to penalty rates and I will reverse the tax cuts for millionaires,” he said. “If Labor gets elected at the next election, we will restore the Sunday penalty rates of every Australian.”

Australian Small Business and Family Enterprise Ombudsman Kate Carnell said the cuts would be partly offset by the above-inflation minimum wage rise of 3.3 per cent, also starting this weekend.

She warned that Mr Shorten’s pledge amounted to an attack on small business owners because they did not have the industrial clout to negotiate deals with unions for lower penalties. “If small business has no confidence that the reductions over the next thee or fours years will actually happen because a change of government would reverse them, you wouldn’t change your hours,” she said.

The chief executive of the Council of Small Business of Australia, Peter Strong, questioned what purpose the Fair Work Commission would serve if governments could overturn decisions.

“It defeats the whole purpose of having a Fair Work Commission,” he said. “It’s anti-small business … Nobody is going to think about opening longer because the election is around the corner.”

​The federal poll is likely to be between August next year and May 2019.