Free Subscription

  • Access 15 free news articles each month

Professional

Try one month for $5
  • Unlimited access to news,insights and opinions
  • Quarterly and weekly magazines
  • Independent research reports and forecasts
  • Quarterly webinars with industry experts
  • Q&A with retail leaders
  • Career advice
  • Exclusive Masterclass access. Part of Retail Week 2021

Prominent economists slam penalty decision

time sheet, pay, wageFormer Reserve Bank governor Bernie Fraser is one of 75 prominent Australian economists and academics critical of a decision to cut Sunday penalty rates in the retail and hospitality sector.

The group has penned an open letter, released on Friday, arguing the reduction will boost inequality rather than employment.

“While it is doubtful that lower penalty rates will result in any measurable increase in total employment in the retail and hospitality industries, there is no doubt that this decision will reduce incomes for some of the most insecure and poorly-paid workers in the economy,” the letter says.

The signatories cite economic and other data to say the retail and hospitality workforce is disproportionately reliant on women, immigrants and young people.

“By reducing wages for this low income segment of the workforce, lower penalty rates would incrementally widen income inequality in Australia and exacerbate its varied economic and social consequences,” the letter says.

It would also reduce tax revenues for governments and increase welfare payments.

Fraser, who was head of treasury before serving as RBA governor from 1989 to 1996, has also criticised the Turnbull government’s company tax cuts for businesses with a turnover of up to $50 million.

“The main recipients will be the dividend holders – not traditionally a disadvantaged, vulnerable section in the community,” he told Fairfax Media.

“And the other people who will benefit will be the senior executives of those companies giving themselves bonuses.

“All the while the vulnerable people are being squeezed at the other end.”

Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.

You have 7 free articles.

Masterclasses are for professionals only

Only $5 p/m for first 3 months
Become a Professional Already a professional? Login
  • Daily exclusive Members Only content straight to your inbox
  • Access to exclusive Retail Week events including all 4 Masterclasses 28 February - 3 March
  • Retail insights and intelligence
  • On-demand videos with industry professionals
  • Weekly careers advice specific to retailers
  • Independent research reports and forecasts
  • Q&A with industry experts
  • Content, content, content! Weekly and quarterly magazines