28 June 2019

Today, workers in hospitality, retail and fast food will have their penalty rates slashed. Frankly, many people, most importantly the workers themselves, are left scratching their heads and asking ‘for what?’

In 2017, the Fair Work Commission approved a round of penalty rate cuts over three years, this cut the latest.

Around 450,000 workers, according to the Government, will lose wages they rely on despite the fact that the job they are doing this Sunday is precisely the same as the job they will do the next.

The estimated hit to the pay packets varies between $2,000 to $6,000 a year, depending who you ask. But for low and middle income families, even the lowest estimate of $2,000 represents a significant impact on the weekly budget.

Some will argue that cutting penalty rates is good for business and will allow employers to offer more work.

But, recent research from the University of Wollongong shows there has been a decline in the number of shifts offered following each of the last two rounds of penalty rate cuts.

In fact earlier this year, Council of Small Business Australia chief executive Peter Strong described the rate cuts as a complete waste of time, stating they had not created a single new job or any extra shifts.

Some will argue that the world is changing, that it’s becoming increasingly normal to work on a Sunday, to be available for an employer at a moment’ notice and that in this environment, penalty rates are outdated.

But, this is surely an argument in favour of a robust program of compensation for workers that reflects the extra burden of working outside regular hours. It might be the bleeding obvious, but children are at school Monday to Friday. If you can’t be with your children on a Sunday afternoon, then when precisely should you be with them?

Some will argue that workers who lose penalty rates will benefit from tax cuts. This is highly misleading. The first round of tax cuts will see low income earners add a maximum of $1080 a year. In the face of penalty rate cuts that could be up to $6,000, according to the Australian Council of Trade Unions, $1080 won’t go far.

Regardless of what will be argued, there is no doubting the fact that come Sunday next week, many thousands of Australian families will find making ends meet even more difficult than they are now.

Penalty rates are not a luxury, and cutting them reduces the real wages of people who are at high risk of financial stress – people who rely on them to simply live.

For families penalty rates mean the difference between being able to take a sick child to the doctor, or waiting and hoping that whatever ailment they suffer from just passes by.

For single people, they might be what makes it possible to pay the ever-increasing electricity bill.

For students, they mean being able to get the books and resources you need for your studies, rather than borrowing them haphazardly from libraries and friends.

In times of growing job insecurity, low wages and increasing employer demands on workers, cuts to penalty rates make life harder, not easier.

It’s well past time our Government, the people we elect to work for us, set about creating an economy that delivers for everyone, not just the wealthy and powerful.

Featured image: Louis Hansel on Unsplash