Karen Andrews (McPherson, Liberal Party) Share this | Hansard source

Let me start by saying that penalty rates should not be a penalty on employers for providing work. A review of the proper application of penalty rates is well overdue and the time has come to move away from entrenched views and positions and to look at the organisation of work to ensure that the system that is in place is one that is conducive to employment and supports the creation of job opportunities rather than acts as a disincentive for employment.

There are many key issues that I would like to cover today, including the changes to the way work is organised, changes to preferred working patterns and the current levels of underutilisation that could be addressed through changes to the application of penalty rates. The days when work was organised to fall generally between the hours of 9 am to 5 pm Monday to Friday, with perhaps Saturday work from 9 am to 12 noon, are long gone. This is the case in many of the industry sectors, but let me just start today with the retail sector where the trading hours for major shopping centres are indicative of the pattern of work for much of the retail sector.

Most major centres around the country operate Monday to Wednesday, 9 am to 5.30 pm, which has been reasonably standard for a number of years. On Thursday and Friday there is generally late night trading from 9 am to 9 pm. Saturday is all day, from 9 am to 6 pm; and Sunday, 10 am to 5 pm. Over a period of seven days, major shopping centres are generally open for about 65½ hours. These hours of operation are a far cry from the days when the retailers were open for 40 to 45 hours a week. The 65-plus trading hours of the major shopping centres are reflected at small local centres that are competing with the major operators. For most retail traders, the cost of their merchandise remains constant, irrespective of the day that it is sold. For example, a shirt costs a customer the same amount on Monday as it does on Sunday, but it costs the retailer much more to sell that shirt on the Sunday than it does on the Monday, and that is because of the increased cost of labour as a result of penalty rates. The retailer cannot pass on this additional cost and therefore they must absorb it.

For restaurants and cafes, core trading times are predominantly evenings, Saturdays and Sundays, when penalty rates are highest. So, again, business operators are being penalised for operating during their peak periods. These are times when many businesses would prefer to have more staff but simply cannot afford to do so, and a significant contributing factor is the penalty rates that apply at those times. For those businesses that are dependent on the leisure and tourist trade, their core operating hours are not necessarily 9 am Monday to Friday either. It is weekends where, again, they pay a premium for operating during their busiest periods.

In many industries the services are required at anything but nine to five on Monday to Friday. They are required during the evenings and weekends when there is a premium that needs to be paid by the employer that in many cases simply cannot be passed on to the customer and must be absorbed. This leads to the question of how best to respond to the increased hours of operation that the community now expects. I accept that many people wish to work nine to five on Monday to Friday but there are many others who prefer to work on weekends and at other hours during the week. This is the case for students and also for the second earners in the family, primarily women, who have care of their children whilst their partner works during the week but would be available and willing to work on weekends when their partner could care for the child or children and the burden of childcare costs is therefore reduced. But the quantum of penalty rates means that opportunities to work during times that suit these potential workers are limited. This is adding to the already high levels of underemployment and underutilisation that we have in Australia.

We know from ABS data that underemployment, where individuals who are currently employed are willing and able to work more hours, has increased from 6.4 per cent in August 2007 to 7.2 per cent in August 2012. The underutilisation rate, which combines the unemployment rate and the underemployment rate, shows an increase from 10.8 per cent in August 2007 to 12.4 per cent in August 2012. When penalty rates are considered against this background, it is clear that we cannot continue to operate in the 21st century with terms and conditions of employment that reflect an era that is long gone. I am not advocating the total removal of penalty rates but I am saying that it is imperative that we move from entrenched positions, recognise consumers expect services to be available for extended hours, recognise the high level of underutilisation of labour that we have in this country, and recognise that a high quantum of penalty rates for Saturday and Sunday work will act as a disincentive for employment. (Time expired)

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