Tourism industry demands review of penalty rates in Australia

Penalty rates are stifling Australia's tourism growth and making it impossible to compete with destinations such as Bali and Fiji, the industry says.

A report says penalty rates are the most pressing problem needing government attention.

The TTF-MasterCard Tourism Industry Sentiment Survey showed 67 per cent of respondents ranked the need for a review as highly important.

TTF chief executive Ken Morrison said tourism was a seven day a week, 24 hour a day business.

"Penalty rates make it very difficult to open on public holidays and on Sundays and provide the customer service that people want," he said.

"If we're going to grow tourism we need to recognise that the current penalty rates remain really discriminatory against tourism.

"We're a high-cost country compared to our competitors so the customer service experience and value needs to be there.

"It's difficult to do that when we have such a punishing penalty rates regime."

Mr Morrison said the industry would be able to employ more people if penalty rates were lower.

"The reality is people's lifestyles have changed a lot," he said.

"People don't have the same nine to five approach to their working life that they once did - they're looking for more flexibility."

Accommodation Association of Australia CEO Richard Munro said there were four public holidays over Easter this year.

"As a result the accommodation operators were paying 11 days of wages for four days of work, based on the fact that on a public holiday wages are 275 per cent," he said.

"Public holidays are the peak time people are travelling and hotels and motels are basically shutting down as much as they can to save on costs."

Mr Munro said those that did stay open were usually run by owners and family members they recruit for public holidays.

"We're not about abolishing penalty rates but it's about bringing back balance to an industry that runs 24/7," he said.

But Australian Council of Trade Unions president Ged Kearney said penalty rates had been part of the Australian workplace for decades and provided much-needed income for low-paid workers who were required to work weekends and public holidays.

"Employers made a bid to cut penalty rates earlier this year which was rejected by Fair Work Australia, which found they presented no reliable evidence that they cost jobs," he said.

"Cutting penalty rates will hurt workers without creating jobs.

"Money paid as penalty rates does not disappear - it is returned to the economy when workers use it to buy goods and services from businesses.

"Reducing penalty rates will hurt these businesses."

Mr Kearney said he was not surprised the report was being launched during an election campaign.

"We know business has a long-term agenda to get rid of penalty rates to increase profits, and they are trying to put pressure on the Coalition to support them," he said.

"The Coalition needs to guarantee that penalty rates will be retained if they win the election."

Overall the TTF survey found tourism operators were more optimistic about domestic and international tourism, thanks in part to the falling Australian dollar.

After penalty rates, the next most important was tax reform to encourage investment in

tourism infrastructure, increased funding for Tourism Australia and more resources to entice Asian tourists.

Source: The Australian, 30 August 2013