Penalty rates: Liberal MPs push for cuts as Malcolm Turnbull suggests change is inevitable
October 6, 2015
Malcolm Turnbull: Reduced penalty rates inevitable
Workers and unions will need to know they will be ‘better off’ under any workplace reform, says the Prime Minister speaking to 3AW’s Neil Mitchell.
Momentum is building in the Coalition for industrial relations reforms that could see weekend penalty rates cut, with Liberal MPs suggesting higher rates of pay across the seven day working week as a possible trade-off.
Six Liberal backbenchers told Fairfax Media on Tuesday that weekend penalty rates should be reduced in sectors such as hospitality, retail and tourism to drive business growth and stimulate employment, particularly of young people. One backbencher even suggested federal government intervention if the independent Fair Work Commission did not move on the issue.
The comments came after Prime Minister Malcolm Turnbull gave his clearest signal yet that changes to penalty rates could be on the table at the next election, suggesting that “over time you will see a move to a more flexible workplace”.
Mr Turnbull said that Sunday penalty rates, which can be up to twice the weekday hourly wage and are in excess of the time and a half paid in some sectors on Saturday, was an artifact of history.
“The only reason they’re different, I assume, is history,” Mr Turnbull said Fairfax radio station 3AW, adding that “of course” Australians now lived and worked in a seven day economy.
He struck a note of caution about the need to persuade unions and workers of the need for change and that “in net terms they’d be better off”.
Mr Turnbull said workers would be “naturally reluctant” to give up their benefits and that “any reform has got to be able to demonstrate that people are certainly not going to be worse off and, overall ideally in net terms, better off”.
That could mean, for example, that while weekend penalty rates could come down, weekday pay rates could be raised to compensate – an idea proposed in a framework enterprise bargaining agreement put forward by Business SA and that state’s shopkeepers union in March. Such a deal would still have to be approved by the Fair Work Commission under the “Better Off Overall Test”.
The Prime Minister’s comments, as well Employment Minister Michaelia Cash’s suggestion that weekend penalty rates deter employment, emboldened Liberal MPs to speak out on the need for change, in stark contrast to the former Abbott government’s approach to IR reform.
NSW Liberal MP Angus Taylor said penalty rates should be reduced on weekends to help tackle youth unemployment, which has been stuck at a high of 13.6 per cent since March, according to the ABS.
“Youth unemployment has been rising and, particularly in the hospitality industry, penalty rates are an issue. Lower penalty rates would create more opportunities for young people in that sector,” he said.
Mr Taylor added that a reduction of Sunday rates to the same level as Saturday rates – which was recommended in the Productivity Commission’s draft report into industrial relations – was a “good option worthy of consideration”.
” I’ve been very public in saying that the Fair Work Commission hadn’t done its work on this issue. Should government step in? Well, if they [Fair Work] are not going to solve it, then that is the only way.”
North Queensland senator Ian Macdonald said his home base of Townsville, which relies heavily on tourism and hospitality, would benefit from penalty rate cuts because “more small business people could actually employ staff on weekends”.
“Matching up Saturday and Sunday would be a good place to start,” he said, adding that ” I’d like to see [penalty] rates come down even lower if it were compensated by a better rate across the board [across the seven day week].”
Queensland Liberal colleague Warren Entsch, a former union official, said changes to penalty rates were ” not about stripping people of their rights” and that “if we don’t do something we will see more and more businesses close” as the economy shifted away from the traditional working week.
Victorian MPs Russell Broadbent and Dan Tehan also backed changes to the system of penalty rates, while ACT senator Zed Seselja spoke for all six Liberal MPs when he said: “I am hopeful the government will take up IR reform .. .and the way I read it from the PM and Michaelia [Cash] is we will look at reform and look at taking it to an election, which is a good thing.”
Opposition Leader Bill Shorten said that Mr Turnbull today had “given WorkChoices the kiss of life” and that Labor opposed reforms that could mean “millions of ordinary Australians take a pay cut”.
Read more: www.theage.com.au