POLITICS

Penalty Rate Cut To Cost Government $650m In Lost Tax, ACTU Claim

Unions mobilise for huge campaign opposing penalty rate cut.

28/03/2017 11:07 AM AEDT | Updated 28/03/2017 12:40 PM AEDT
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Retail, hospitality, fast food and pharmacy workers are affected by the penalty rate cut.

CANBERRA -- The Australian Council of Trade Unions claims the federal government will lose $650 million in tax revenue over the next four years under the decision to cut weekend penalty rates for some workers, as unions nationwide mobilise a massive campaign to oppose the change.

The ACTU brought a clutch of workers from the retail, hospitality, fast food and pharmacy sectors to Parliament House last week, meeting with politicians to share stories of how the cut to penalty rates will affect workers. Workers in those industries will have their Sunday and public holiday pay rates cut, after the Fair Work Commission's decision last month. Prime Minister Malcolm Turnbull has said he supports the FWC decision, while Labor, the Greens and other minor parties oppose it.

Kerrie Hamilton, a part-time pharmacy worker from Adelaide, was one of those workers. She cares for her elderly mother at home, and says the penalty rate decision will cost her several thousand dollars each year.

"I have a very small social life as it is, I'm already living on the line. The biggest impact will be my quality of life. I'm 57, I work 27 hours a week, I have an 81-year-old mother who is a big part of my life and I don't want her to have to go into a nursing home," Hamilton told The Huffington Post Australia.

"I can't cut back anywhere. What it will mean is increased work hours and I don't want to do that, because that will have a flow on effect with my mother and my ability to look after the house. I used to have choices. I feel like my choices are being taken away from me."

The ACTU said on Tuesday it had commissioned modelling on the economic impacts of the penalty rates decision. The trade union body claimed the government will lose $650m in tax revenue alone in the next four years, as workers earn less and therefore pay less tax. The ACTU said this figure did not include other impacts of the decision, such as lower-paid workers having to rely more on welfare or other government assistance.

"The Fair Work Commission decided to back small business and we back small business," Turnbull said in defending the penalty rates cut. He said the changes would lead to employment growth and more hours for employees who want to work more.

ACTU president Ged Kearney said the modelling showed the penalty rates decision should be opposed by the government.

"The cuts to penalty rates supported by this government are not only going to hurt some of the lowest paid workers in Australia, it also represents a significant blow to the tax base," she said in a release.

"In effect the Government is accepting a cost of more than half a billion dollars over four years to make sure that vulnerable workers get a pay cut. Meaning that not only will low paid worker have less money in their pocket but the Government will have less to spend on services."

"The Government promised jobs and growth, this modelling shows that they support a ruling which will result in damage to the budget bottom line and lower paid jobs. If this government has any interest in jobs or growth it should legislate to protect penalty rates."

The ACTU's modelling is just one plank in a nationwide union effort to oppose the penalty rate decision. Unions have said the recent FWC decision, while only affecting a few industries, may be the thin end of the wedge to crack down on penalty rates Australia-wide -- just last week, a push to address rates in the hairdressing and hospitality industries was confirmed.

The ACTU met with Labor, the Greens and crossbenchers including the Nick Xenophon Team, Bob Katter, Jacqui Lambie, Cathy McGowan and Andrew Wilkie, among others, on their parliament trip last week. The United Voice union has started an entire dedicated campaign, Save Our Weekend, to fight the penalty rate cut.

Unions including the CFMEU, Australian Manufacturing Workers Union, the Australian Services Union and the Shop, Distributive and Allied Employees Association have been mounting social media campaigns opposing the penalty rate cut.

United Voice is also crowdfunding to place a large ad in The Australian newspaper, asking Turnbull to meet with a woman called Margarita, a hotel cleaner who will be affected by the penalty rate cut.

Unions have previously promised to mount an even bigger campaign against penalty rates than the one they ran against the Howard government's Workchoices changes.

Back in Canberra, Hamilton said the penalty rate cut represented a "changing of the guard" in Australia.

"Our culture is changing completely, it's about the money god now. It's not like in my father's time when it was about quality of life, a standard of living, a work-life balance, some choice. Now, it's not about that, it's not about kids and women and students, it's about the money god," she said.

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