IR Simplified Penalty Rates DecisionThe FWC’s decision to reduce penalty rates has divided the industrial relations ‘community’. The pundits claim that the decision will help small business, and increase employment.

Discussion around the decision has created a false dichotomy.

If you support the decision you are anti-worker. And, if you disagree with it, you are anti-business.

It also highlights one of the reasons why industrial relations in Australia is the way that it is.

The reality of the decision is that it will do very little to support small business, and could quite possibly be to it’s detriment.

Who Benefits?

Who actually benefits from this decision?

Is it really small business?

Everything that I have seen points to the only benefit being to big business.

To get the full benefit of the Sunday reduction in hospitality, there will have to be a minimum of 6 full/part time employees rostered.

How many small business owners do you know that have nearly half of their staff rostered on Sunday’s?

Ask yourself this question.

Why were those industries chosen, and not an across the board rate reduction?

The Math Doesn’t Add Up

Industry groups have hoodwinked into believing that the decision will increase employment.

This isn’t true

How many small businesses have said that they WILL hire more staff?

I haven’t read of one.

Remember way back when K-Rudd was PM, and the world was about to succumb to the first GFC?

What did he do?

He gave everyone $900.00 to “stimulate” the economy.

Now, bear with me for a minute here.

If giving people more money to spend stimulates it, what will reducing the amount of money they have do?

Let’s look at it from another angle.

We know that middle class households are struggling to balance their household budget.

What do you think will happen when they have less disposable income?

Will they be spending it going out for coffee or to eat at a restaurant?

I think you know the answer to that question.

What Should Be Done?

Small business “leaders” are silent on things that will actually help small business.

For a start, there has been not one word of concern or resistance to big brand stores opening up everywhere.
Big chains moving into an area is never good for small business. Think milk bars and local hardware store.

Let’s remove the income tax payable on overtime.
If people have more money to spend, they will buy more, which will increase demand for products and services. Which will then cause employment to increase to meet demand.

Spend the money they usually do on lawyers to an advertising campaign promoting the benefits of buying from a small business instead.
How much of a difference would it have made to small business to have THEIR organisation promoting them?

Provide free/low cost training to employees of small business to help them add value to what they do.
Any help that small business can get to better train their employees is always a plus.

I could go on, though I think I have made my point.

Finally, if the penalty rates reduction was genuinely made to help small business, let’s make it only apply to them.

While that may be a bitter pill to swallow, at least then we would know that something is being done to help them. Rather than use them as a pawn to help big business become more profitable.