MCM Strategic Communications

MCM Strategic Communications
Leading Canberra-based government relations and media relations consultancy firm.

5 August 2015

Penalty rates reform could be just the beginning

The old weekend penalty rates chestnut has been raised again, courtesy of the release of a draft Productivity Commission report as part of its inquiry into Australia’s industrial relations framework.

The Australian Government’s principal economic advisory organisation has, among other things, recommended that for industries including hospitality and retail, high penalty rates paid to staff who work on Sundays should be reduced to the same level as penalty rates which are paid to workers on Saturdays.

The response to the Commission’s proposals was fairly predictable – unions were up in arms while business groups were, by and large, supportive.

For its part, the Government was at pains to point out that this is a report to government, not by government and that there would be no changes to the workplace relations framework before the next election. The Opposition claimed the Government was attempting to return to the “WorkChoices” regime of the mid-2000s which was one of the major reasons why the previous conservative government lost office in 2007.

In trying to predict the end result of this debate, the only certainty is that it won’t be known for some time and could ultimately be a key battleground for the major parties at the next federal election, which is likely to be held in the second half of next year.

As various stakeholders consider the make-up of their submissions to the draft report, two other points should be considered.

The issue of penalty rates on Sundays is merely one area which is holding back Australia’s tourism and hospitality industries. It could only be a matter of time before the practice of restaurants and cafes charging more for customers who eat in their premises, compared to those who take their food and drink away becomes widespread in Australia. Many restaurants and cafes in Europe already have such a pricing regime in place and it hasn’t deterred customers.

The other is the visionary call made by then outgoing union leader Paul Howes at the National Press Club in February 2014 for the development of “a grand compact in which business, unions and government all work out a deal that we all agree to live with for the long haul”. At the time he made the comments, Mr Howes attracted broad criticism, but the more that time goes by, the more sensible his proposal appears.

Who knows – if (or when) Mr Howes runs for Parliament, his plan could turn out to be the basis of a future Labor policy position on industrial relations.

- By Hamish Arthur

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