Penalty rate cut ‘to leave workers $2.8 billion worse off under Coalition’

Workers will receive billions less in penalty rate remuneration under the Coalition, analysis shows.

Prime Minister Scott Morrison makes a coffee in Googong, NSW in 2018. Picture: Kym Smith

Workers would collectively receive $2.88 billion less in penalty rate remuneration under a re-elected Coalition than if the ALP won office and reversed Sunday penalty rate cuts, analysis by the Labor-aligned McKell Institute claims.

The findings are based on the Coalition being re-elected and not changing the Fair Work Commission decision to phase in cuts to penalty rates paid to workers in the retail, hospitality, fast food and pharmacy sectors.

It finds workers in the retail sector would be expected to receive $1.64 billion less in penalty rate pay under a re-elected Coalition government than under a Labor Government over the life of the forthcoming parliament.

Hospitality workers would receive $837.15 million less under the Coalition; fast food workers would be worse off by $303.8 million and pharmacy workers would get $84.86 million less in penalty rate pay.

Bill Shorten has promised to reverse the penalty rate cuts within 100 days of winning office.

James Pawluk, the institute’s Victorian executive director, said the majority of the $2.88 billion would be pumped straight back into the economy under Labor’s policy, as those earning Sunday penalty rates were overwhelmingly likely to spend them locally.

“The primary effect of retaining lower penalty rates would be the transfer of billions of dollars from retail and hospitality workers to business owners and shareholders,’’ he said.

“There does not seem to be an economic or ethical justification for such a transfer at this time.”