Weakness in the Australian economy is further proof of the need to stop cuts to penalty rates, according to Labor and unions.
But the government says it didn’t choose the cuts and that it is trying to give people more money to spend through its promised tax cuts.
About 700,000 retail, fast food, hospitality and pharmacy workers will have their Sunday penalty rates pared back from Monday, as part of a gradual easing of the loading initiated by the Fair Work Commission.
Labor has long railed against the cuts, but leader Anthony Albanese said stopping them is even more important while the Reserve Bank has indicated the economy is softening.
“At a time when wages are not keeping up with the cost of living for so many Australian families, this is a blow to them, but it’s also a blow to the national economy,” he told reporters in Canberra on Monday.
Labor’s workplace spokesman Tony Burke said it’s simply not fair that many people will earn less this Sunday than they would have a week before.
Finance Minister Mathias Cormann stressed the Fair Work Commission decided on the changes to penalty rates independently.
He said the wage price index, which tracks wage growth, is picking up and the government is trying to put more cash in people’s pockets through its $158 billion worth of tax cuts.
Looking to the economy more broadly, he said spending big on infrastructure is also in the government’s sights to keep things moving.
“We are very focused on making sure that we continue to deliver our pro-growth agenda,” Senator Cormann told ABC Radio National.
“It is what is reflected in our budget and it is what we will continue to do into the future.”
Australian Council of Trade Unions president Michele O’Neil agrees the economy would be best served by keeping Sunday rates higher, meaning many workers have more money to spend.
“It would be good for small business, good for local businesses and good for the economy,” she told reporters.
Hospitality union United Voice said Prime Minister Scott Morrison also needs to give the penalty rate cuts the boot for equity’s sake.
“Working people need jobs that are secure and pay them fairly – not more cuts that stop them from being able to pay for life’s essentials,” said the union’s national secretary Jo-Anne Schofield.
Business lobby the Australian Industry Group highlighted that the minimum wage increases by three per cent on Monday, meaning people on the rate will get $19.49 an hour.
“ACTU claims that workers will suffer because of Sunday penalty rate adjustments do not stand the most cursory of scrutiny,” chief executive Innes Willox said.
The Reserve Bank of Australia is widely expected to deliver the first back-to-back interest rate cut since 2012 when its board meets on Tuesday, in an effort to kick-start economic growth.
That would set a new record low cash rate of 1.0 per cent.
Mr Albanese says the central bank’s meeting is likely to influence the debate about the coalition’s full tax package, which will play out in parliament this week.
“We’ll wait and see what they have to say about the economy,” he said.