Penalty rates cut would devastate regional economies: research

Regional Australia would take an economic hit of up to $1.55 billion every year if penalty rates are scrapped, research released by two of Australia’s largest union today has found.

The research conducted by the McKell Institute reveals that retail and hospitality workers in rural Australia would lose between $370 million and $1.55 billion each year.

The economic modelling shows any cut would reduce disposable income in regional areas by up to $748.3 million a year, hitting local economies hard.  The total economic impact will depend on the extent of the cut to penalty rates and the level of local ownership of retail stores.

United Voice and the Shop, Distributive and Allied Employees’ Association, together representing well over 320,000 members, have released preliminary findings from an upcoming report ‘Who loses when penalty rates are cut?’

These findings come at a time when penalty rates are the focus of a multi-pronged attack from business lobby groups and government, including:

  • The Productivity Commission’s controversial recommendation to reduce penalty rates for retail and hospitality workers;
  • Employer’s application to the Fair Work Commission to reduce penalty rates in some modern awards; and
  • Senators, John Leyonhjelm and Bob Day introduction on Monday of a private members bill to scrap penalty rates in the restaurant and catering, retail and hospitality industries.

Quotes attributed to Shop, Distributive and Allied Employees’ Association (SDA) National Secretary Gerard Dwyer:

“This research highlights the devastating impact cutting penalty rates would have on rural and regional Australia.

“The argument to cut penalty rates across the board is short-sighted and ill-informed.  This report proves that despite what the business lobby groups may say, cutting penalty rates will only serve to hurt employees, their families, the economy, and local communities.

“The retail and hospitality sectors account for around nearly 20 per cent of the workforce in rural Australia.  Any move to scrap penalty rates would have a disproportionate impact on our rural communities.”

Quotes attributed to United Voice National President, Jo-Anne Schofield:

“This report is a wakeup call.  Australia workers and their families rely heavily on penalty rates to make ends meet.  Any cut to penalty rates will deepen the divide between the city and the bush, the haves and the have nots.

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