Wednesday 30 November 2016

Sunday Penalty Rates

And so it comes, more pushes for 7 day trading in country areas and always co-joined is the call for abolishing penalty rates. But what's it really work out to be?

Well the Federal Liberals and the State Liberals would be well aware of the Productivity Commission Report that Joe Hockey signed off on before he left politics and dived into the Diplomatic trough.

It stated that wages actually accounted for 47% of the cost of doing business. Now depending on how you closely crunch the numbers and which numbers you grab to crunch the effect is a little surprising.

Here's an indisputable fact...according to the report.

Wages account for 47% of a businesses cost.
Wages account for 100% of the workers income for working for the business. (yes being cheeky)

Abolishing penalty rates means the staff will take a pay cut of their 100% so as to reduce the business' 47%.

Now if, depending on the business they're effectively paying 8 days wages for 7 days work it comes out like this.

The wage earners in that case is taking a 12.5% pay cut.
The business will pickup a 5% saving on their whole budget.

Just check that again, the business is 5% wealthier and the staff are 12.5% poorer. If there's only 5% between being profitable and loss making I'd be very worried as a business owner about the business' model. Just wait until the Australian Interest rates get to 10 or 12% (they will eventually)

If the only place you can cut costs back is the wages and not from the other 53% then I'd be petrified.

One smart cookie has already suggested the business owners lessen their exposure by opening their doors on normal days & close on the days when penalty rates apply and go work for their opposition on those penalty days.
Think that's being cheeky, but it'd be a whole lot cheekier if it didn't have smart financial sense behind it.





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