Reducing penalty rates could eventually lead to a vibrant weekend retail trade, but may not encourage greater spending from consumers, business owners say.
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Inverell newsagent Anthony Michael, who opens weekends at Syretts Newsagency, said reducing penalty rates could help small businesses balance the bottom line for seven-day trading but consumers may not be inclined to spend more.
"They won't spend more money because they only have a certain amount of money to spend. And not a lot of people have excess cash," he said.
"So, they will only spend it in a different time and place, rather than spend more."
Inverell Chamber of Commerce president Josh McPhee agreed. He said the local shopping culture would need to shift to encourage weekend trading.
The argument in favour of rates cuts: that reduced penalty rates will free up retailers to hire more staff for improved customer service. But both Mr Michael and Mr McPhee agreed business owners would be left in a catch 22 – balancing costs of running a seven-day trade against actual consumer spending.
"For a lot of people in Inverell, Sunday is traditionally a rest day," Mr McPhee said.
"We could open late and open Sundays, but if people don't know you are open maybe they don't shop on Sundays. Maybe they do sport or go to the park or those sorts of things.
"It is a matter of the culture, and shifting that. I don't think that is something any one business can do, but it is something that will change over time."
The Fair Work Commission ruled that rate reductions for retail, fast food, hospitality and pharmacy workers would not take full effect until 2019. The first penalty rate cuts of five percentage points will begin next month.
Trade unions fought fiercely against the plan, arguing employees cannot afford the cut, estimated at a collective sum of around $1.42 billion.
Mr McPhee said, even with the reduced weekend rates, opening the doors came down to a bottom-line decision.
"But it comes down to whether it is worthwhile for the business as well, and without a stronger local shopping culture on a Sunday, it is going to be hard."
The decision to change penalty rates comes alongside a 3.3 percent minimum wage rise as of July 1, which will see the average worker take home around $22 more each week. But Mr Michael said the wage lift could cripple small businesses on the brink.
“If you are struggling to meet budgets, in the end, you have to cut wages. It is the only control you have. You can't cut your rent,” he said.
But Commission President Ian Ross said this week that previous reviews of the wage lift might have been "overly cautious" toward negative effects on employment.
Penalty Rates explained
Penalty rates were established in 1947 when unions argued in the Arbitration Commission that people needed extra money for working outside normal hours.
The introduction came as paid annual leave and sick leave were gradually phased in from 1935 to the mid-1970s, according to the Fair Work Ombudsman's industrial relations timeline.
Michael Taylor, principal consultant for Queensland firm HMT Consulting, publish a review of the decision in which he argued penalty rates were historically considered a reward for staff who made extra efforts, or compensated workers for time away from their communities, families and social lives.
While the ruling to cut penalty rates has been sighted to promote better customer service by offering opportunities to hire more staff, it has angered unions and some retailers.
Opposition Leader Bill Shorten said the decision "confirmed the worst fears of workers" and urged the government to support his private members' bill to stop the cuts..