Penalty rates cut would devastate regional economies: research

Aug 8 2015

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 unions 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;
  • employers’ 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.

Click here to see the report.

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