Cutting penalty rates won’t magically create jobs

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By Leith van Onselen

Following the Fair Work Commission’s (FWC) recent decision, public holiday and Sunday penalty rates in sectors such as retailing and hospitality will be reduced over several years. Employment Minister Michaelia Cash claims lowering penalty rates will encourage small businesses to trade on Sundays and create jobs, and has been welcomed by employer groups like the Business Council of Australia. However, the Australian Retailers Association argues that the full reduction in Sunday rates should have been made by mid-2018. From The Australian:

“This will help thousands of small businesses open their doors, serve customers and create jobs on Sundays,’’ [Michaelia Cash] said.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.