Proposals to cut Sunday penalties raise political problems for Tony Abbott

TONY Abbott faces the prospect of having to recommend slashing the weekend wages of tens of thousands of Australians ahead of an election.

Manly cafe - Hemingway's is on Yelp's latest top 100 best latte list in Australia. Head barista Alex Wearne making a coffee.

ANALYSIS

The thousands of Australians fretting over the fate of their Sunday wages might be reassured by the politics of pay packets.

Prime Minister Tony Abbott faces the prospect of having to recommend slashing the weekend wages of tens of thousands of Australians just as the countdown to a 2016 election begins.

In the wake of yesterday’s draft Productivity Commission report recommending the ditching of Sunday penalty rates for retail and hospitality workers, the Prime Minister can be sure he will also face the accusation — whatever his response — that he has gone to the industrial relations graveyard at midnight and dug up WorkChoices, the notorious Howard government workplace package he had declared dead and buried.

In addition, there is the 2013 election promise made by Mr Abbott and his Employment Minister Eric Abetz that “Under our policy, no Australian worker will be worse off and businesses will be encouraged to grow.”

Service industries, which include shops and eateries, are doing well already.

The Australian Industry Group’s services sector index for July, released today, was at 54.1, the highest level since February, 2014.

The growth and wage objectives are not mutually exclusive but business groups, including the increasingly powerful Council of Small Business Organisations Australia is arguing growth in many sectors will be aided by changes to the wages system. And that means targeting penalty rates.

It also means workers relying on the pay premium for Sunday labour would be worse off, as proposed in the interim document from the Productivity Commission yesterday.

The draft proposes an “enterprise contract” which would be based on a no-disadvantage test to distinguish it from the Australian Workplace Agreements of the Howard era.

More contentious, the Productivity Commission recommends reducing Sunday penalty rates in retail and restaurant outlets to Saturday levels to reflect changing consumer patterns.

“Australian society expects to be able to shop, go to a pharmacy, and eat at cafes and restaurants on weekends,” said PC chairman Peter Harris.

“The value of supermarket shopping on Sundays now exceeds some weekdays.

“The bottom line is we are pretty confident from analysis that [cutting Sunday penalty rates] will increase overall employment in those services industries and provide consumers with additional benefits.”

The final PC report will be delivered in November.

Tony Abbott has no intention of reviving WorkChoices and was never convinced it was a winner in its original form close to a decade ago.

But trade unions will make sure the ghost of that policy will a hover over whatever the Prime Minister decides.