The real cost to the economy

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The Queensland economy would be shortchanged millions of dollars a year if penalty rates were cut for hospitality and retail workers, according to recent research by the McKell Institute.

This research sits in contrast to a study by Restaurant & Catering Australia claiming a reduction in penalty rates will stimulate the economy.

Research conducted by the McKell Institute found that any significant reduction in penalty rates would have an adverse effect on workers and local economies. A hospitality worker working 8 hours on a Sunday could lose up to $71 a week, or $3,700 per annum. Hospitality workers earn an average wage of less than $30,000 a year.

The research reveals a loss of income of $78million across the Bonner, Bowman, Brisbane, Dickson, Forde and Longman electorates if Sunday rates were reduced to Saturday levels for retail and hospitality workers.

“Claims that slashing the pay packets of people already earning low incomes will strengthen our economy are ridiculous,” said Gary Bullock, United Voice Queensland Secretary.

“All you’re going to do is take hard-earned cash from the back pockets of a group of low paid workers who would have spent it in their communities and hand it back to their boss.

“It also completely defies logic that employers will spend that boost in their profits on employing more people, despite what RCA may claim.

“Penalty rates serve as not only financial security for individuals in lower paying industries, but they also help to foster economic vibrancy throughout Brisbane and all across Queensland. When people earn less money, they spend less money.

“Hospitality workers rely on weekend penalty rates to compensate them for missing time with family and friends and to ensure they can pay their bills. A cut to penalty rates without compensation is a cut to take home pay workers can’t afford and don’t deserve.”

Around 70,000 Queenslanders within the electorates of Bonner, Bowman, Brisbane, Dickson, Forde and Longman work in the hospitality and retail industries and rely on penalty rates. The total value of the penalty rates earned by hospitality and retail workers in these six Queensland electorates examined equates to $197 million.

The McKell report states that any significant reduction in such rates would be felt throughout these local economies.

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