Author: Mark Fletcher

The weekend penalty rate deal between union and government in South Australia announced this week does not appear to be as good as pitched in my view. At its heart, the deal shifts labour costs from penalty rates to the base, thereby not reducing the cost of labour to a business. Further, the deal is voluntary and that is problematic.

At a small business round table with retailers and Minister for Employment Eric Abetz – before he was minister – I was part of a conversation about weekend penalty rates. While employers in the room were keen to achieve a lower operating cost on weekends, the risk of a change which was voluntary was clear as it could make competing for employees more difficult.

Speaking for my own business, an hourly cost of $40.00 on a Sunday is not justified in my view. There is no difficulty in finding people to work on a Sunday – because of the pay. I sense that cutting this to, say, $28.00 an hour would not alter availability of employees. That saving would add $9,984 to the bottom line of the business over a year.  All of this would be reinvested in a mixture of marketing, stock and more hours. This reinvestment would improve the business which would require hiring more people.

While I am no economist it seems simple to me. If the government wants to address unemployment, addressing the out of date weekend penalty rate structure is one of several options to consider.

The bigger picture here is overdue economic reform. The issue of penalty rates needs to be considered along with taxation (all of it – personal and business), government services and other economic levers available to government to stimulate the economy and reflect equity for all Australians. In other words, as part of a complete package of economic reform which deals with all participants in the economy and not one or two sectors. Unless this is done, selling any real penalty rate change would be impossible.

A newsagent who was adamant they could not sell gifts priced above $50.00 is now regularly selling gifts priced at $100.00 and more, much more.

After being encouraged to give more expensive gifts a go, they discovered their customers would happily spend more than the limit they had set themselves.

Sometimes we hold our businesses back by deciding what our customers will purchase and how much they will spend on an item.

If you sell Easter eggs in your newsagency and you compete with Coles, make sure you staff know that the Thorntons range sold by Coles is imported from the UK. Know the source of your eggs. If they are made in Australia, pitch this and have your staff ready to let customers know. Locally made eggs are better for our economy that the Thorntons eggs from the UK.

I am finding shoppers more engaged than ever with locally made products in certain product categories. Food is one such category. You can drive this engagement with promotion of locally made.  Even a simple sign LOCALLY MADE = LOCAL JOBS works a treat. Coles can’t say this with their Thorntons products.