Coalition Governments’ are obsessed with dismantling penalty rates. The impact on our economy today would be no different than when Howard announced his workplace reforms in 2001.

29th July 2001

Howard’s Workplace Reforms – Bad for Business!

 Central Victoria’s economy would be gutted if the Howard Government’s attack on workers’ penalty rates became law, according to the Federal MP for Bendigo, Steve Gibbons.

Mr Gibbons said the so-called Workplace Relations reforms proposed by the Howard Government could see the abolition of workers’ penalty rates totalling more than $80 million in Central Victoria alone.

“We stand to lose the economic equivalent of between 2100 and 3400 jobs – every year – through this attack on workers’ pay packets,” he said.

Mr Gibbon’s commissioned research using LaTrobe University’s pioneering “REMPLAN” economic modelling software that illustrated a dramatic reduction in disposable income injected into Central Victoria’s economy if the Howard Governments abolition of penalty rates became law.

He said Prime Minister Howard and several Ministers had constantly refused to rule out the likelihood of penalty rates disappearing altogether under the Governments proposed changes to Australia’s Workplace Relations system.

“REMPLAN statistics show a massive $84.3 million reduction in direct disposable income each year across all our Industry sectors throughout the Central Victorian economy and when you factor in the flow on effects the figure jumps to a whopping $136 million”, Mr Gibbons said.

“Think about that! Assuming the workers of our region get the Median Weekly family wage, this is equivalent to losing more than 2100 jobs, based on the direct loss of disposable income, or an even more heart-wrenching 3400 jobs based on the flow-on losses”.

“It’s nice for the Prime Minister to sit in Canberra and talk in waffly bureaucratic terms about his policies, but right here in the real world, this is what the impact will be,” Mr Gibbons said.

“It means a huge reduction in wages being spent in the local economy and small business in the Hospitality, Tourism and Retail sectors would be hit the hardest”.

“And the figures do not include the abolition of overtime which is also under threat from the Howard Government’s proposals”.

“Wage earners who have a penalty rate component as part of their annual income are already among the lowest paid workers throughout Australia and usually spend their entire pay packet each pay period on necessities”.

“Small business might gain a reduction in their wages bill if penalty rates are abolished but those gains would soon disappear through a substantial reduction in cash flow into their businesses”.

“In fact, the impact in our community will be even worse, because here our average wage is lower than most of the rest of Australia.

“In Bendigo and Central Victoria we already have one of the lowest Median Weekly Family Income levels at $736 per week and if the Howard Government’s Workplace Relations reforms are implemented this already low figure would become even lower.”

“The REMPLAN forecasts are terrifying, and if Mr Howard has any more encouraging data then let’s see it.”

(Figures based on a penalty rate component of 33% of annual disposable income from all Central Victorian sectors that attract penalty rates)