Penalty Rate Cuts Will Build Inequality

Cutting weekend penalty rates will not create jobs but will build inequality, according to social sector organisations which say they remain “deeply opposed” to the landmark cuts.

The move by Fair Work Australia, which was first announced in February and will come into effect on Saturday, will see cuts to the income of weekend workers, first by 5 per cent this year, then by greater amounts up until 2020.

St Vincent de Paul Society CEO Dr John Falzon said the incremental cuts were an attack on people who were already struggling to survive

“Changes to penalty rates will affect more than 700,000 workers across the retail, hospitality, fast-food and pharmacy industries. These industries have the largest proportions of low-paid, award reliant workers,” Falzon said.

“Cutting penalty rates will not create jobs but it will build inequality.”

In line with the new cuts, retail and pharmacy workers will lose double-time Sunday rates and instead be paid at 150 per cent of their normal pay by 2020.

Meanwhile penalty rates for fast-food employees will drop from 150 per cent to 125 per cent by 2019, and hospitality workers’ Sunday pay will fall from 175 per cent to 150 per cent over the next three years.

Australian Council of Trade Unions (ACTU) president Ged Kearney said the federal government had turned its back on working people.

“The Turnbull government’s decision to vote against proposed legislation to stop the penalty rate cuts is another failure to stand up for Australian working people,” Kearney said.

“About 25 per cent of Australians currently work on weekends. The working people affected by these cuts do not work weekends by choice, they work weekends and give up time with family and friends because penalty rates allow them to make ends meet.

“Australia is languishing in the midst of record low wage growth. The Governor of the Reserve Bank this week even said there is a ‘real wage crisis’.

“Cutting penalty rates is a cut to pay when Australian workers desperately need a pay rise.”

Kearney said the ACTU would campaign to stop the penalty rate cuts until they were reversed.

“All Australians deserve to be able to spend time with their kids, contribute to their community and be able to survive. These cuts are cruel,” he said.

It comes as opposition leader Bill Shorten announced on Wednesday that Labor would reverse the decision of the Fair Work Commission to reduce weekend pay for workers in the hospitality, retail, fast food and pharmacy industries, if they won the election.

Speaking on the eve of the cuts he said it was a “dark day for Australia’s workforce”.

“Malcolm Turnbull will be giving millionaires a $16,500 pay cut [sic] but he will be giving 700,000 plus workers a pay cut in their award system on Sunday. It is not good enough. We need government of Australia to be standing up for the interests of all Australians,” Shorten said.

“On 1st of July, peoples’ electricity prices just go up and up. Peoples’ penalty rates are getting cut. All Malcolm Turnbull wants to do is give large corporations a tax cut and look after his mates, the millionaires, and give them a tax cut. We have got to look after the Australia in the interests of everyone, not just the lucky few at the top of the tree.”