Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise today to bring to the House’s attention some of the ramifications of the Government’s Fair Work Bill and the change to new modern awards. One would think anything that modernises the employment system would on the face of it be welcomed. Unfortunately, despite the government’s commitment to not raising the price of labour in the process of award modernisation, it is now becoming apparent that this will not be the case and that the retail and hospitality industries in particular will be digging deeper into their pockets in order to keep their doors open.

Changes such as 25 per cent penalties for weekday work after six o’clock and on Saturdays, currently paid at ordinary time as well as a steep rise in penalties for Sundays to 100 per cent and public holidays to 150 per cent above ordinary time rates will ratchet up costs, particularly for small employers at a time when they can least afford it. When our unemployment queues are already growing at the fastest rate in the last forty years, now is not the time for a new wages push in these high-employment sectors. In some cases the wage rises will lead to a reduction in services. The Australian public has made it abundantly clear how much it enjoys extended services—the demand is there and business has shown its commitment to responding—but, in the end, if you cannot make a profit, you will not open.

Retailers in South Australia are currently governed by the state retail award. Some years ago, when the award was adjusted to meet the demands of extended shopping hours, adjustments were made resulting in higher ordinary time wages as a trade-off to the flattening out of penalty rates. It was recognised that these businesses were now required to trade longer hours in order to remain competitive and meet public demand. Now, as a result of the new awards, that higher base rate, put in place to compensate for lower penalties, is being protected and penalty rates are being reintroduced on top of it. It has, in fact, a ratcheting effect on wages.

I have been contacted by John Sandercock, a medium sized supermarket operator in the progressive country town of Ardrossan within my electorate of Grey. John currently employs 30 full-time equivalent staff. He calculates that he will see his wages bill rise by $70,000 a year. This amounts to about two staff positions. He tells me he will have to make cuts to his workforce to meet the new constraints. How can this be productive? How can putting wages pressure on a small business at a time of great financial challenge be a good thing? The ramifications for the restaurant industry, which largely operates out of hours, will be even more telling. There is no doubt the Australian public were convinced that they should get rid of Work Choices. This side of parliament has heard the message and allowed it to happen. What the electorate did not ask for was a return to the 1970s.

The time frame for introduction of the new awards is at best difficult—right in the middle of the Christmas-new year retail surge. The name ‘new modern award’ may be all of those things—that is, it may be new, it may be modern and it certainly is an award—but it is not simple. It’s an interesting use of words, isn’t it? New modern award implies simplicity; in fact, it is far more complex than the old award. In the eyes of business this is just more government red tape. Small businesses do not have human resources departments. Awards that have more pay scales and more restrictions on the mix of working hours just make life more difficult.

There have been enormous changes in the Australian community over the last twenty years. There was a time when, on Sundays, buying petrol was difficult, restaurants, cafes and hotels were shut and hardware shops and boutiques were shut. Australians do not want to go back to that era, and yet many of the flexibilities in the workforce that allowed those services to evolve are now being attacked, no more so than by the reintroduction of totally prohibitive penalty rates. The imposition of a 150 per cent loading for public holidays will mean the only businesses which will open will, by and large, be those operated by family members. This is hardly a fair way to distribute the workload. The moves to lift casual loading to 25 per cent are a blunt way of trying to force businesses to put on permanent employees. There is a paradox when at the same time we have reintroduced unfair dismissal laws, which will discourage employers from taking on permanent staff. I urge the Industrial Relations Commission to allow for a phase-in period of a number of years and a later start-up date, which avoids the Christmas-new year 2010 rush, to allow the industry to adapt to the new conditions.