EDITORIAL: Penalised by penalty rate cuts

The pay packets of some of our lowest-paid workers are a touch even lower this week, thanks to the federal government’s cuts to weekend penalty rates.

The cuts implemented by the Fair Work Commission came into effect on July 1, just in time for the weekend shifts for an estimated 700,000 workers in the hospitality, retail, pharmaceutical and fast food industries.

The cuts to Sunday wages will be phased in over the next two to three years, with workers losing up to five per cent during this first phase. Once the full cuts take effect, Sunday wages will be in line with Saturday, meaning a drop of up to 25 per cent of an hourly wage. 

No doubt this is music to the ears of small business owners around the country struggling to make ends meet in a new era of online commerce and ever-increasing overheads. It’s also undoubtedly a boon for the big chains and multi-nationals putting profits and shareholders first.

The Fair Work Commission says the decision will lead to small businesses being able to extend trading hours and allow a boost in employment. Longer opening hours on Sundays could definitely be a great thing if consumers get behind it as well as retailers.

But can anyone really see small businesses in regional areas like the Bega Valley hiring more people because they are now making a saving on Sundays?  Or will it just be a case of the existing employees being paid less to do the same job?

A sting in the tail is that July 1 also marked the day when federal politicians received a two per cent pay rise, as well as a two per cent tax rate cut.

Sydney Morning Herald reports a backbencher will now earn $203,020 a year, while at the top end, our PM –  who applauds the penalty rates cut – has seen his salary increase $10,000 to $527,852.

The median salary in Australia is about $80,000 – but we’d suggest those in the hospitality, retail pharmaceutical and fast food industries earn far less than that. (As an aside, regional journalists also earn far less than that average.)

The discrepancy was put succinctly by Bega High School teacher Peta Relton when she and some BHS students appeared on ABC television’s Q&A last week.

”Unlike politicians, low-paid workers don’t have the benefit of retiring with a gilded nest egg, or receive taxpayer-funded entitlements like helicopter rides and family holidays,” she said.