Public holiday penalty rates pile pressure on small businesses

With the Victorian Government earmarking extra public holidays in the state, threatening to squeeze more penalty rates out of small businesses, the Australasian Association of Convenience Stores (AACS) has called for common sense to prevail.

According to media reports, the Victorian Government is preparing to gazette changes to Victoria’s public holiday schedule to include Easter Sunday as well as Grand Final Eve.

AACS CEO Jeff Rogut said the proposed changes are completely unnecessary, out of touch with reality and a huge burden on small businesses struggling to cover the exorbitant penalty rates already in place.

“Penalty rates are a huge cost to small businesses and Governments should be looking to scale penalty rates back instead of forcing retailers to cough up more,” Mr Rogut explained.

“At the end of the day, the pressure that more penalty rates will apply to small businesses will force them to close on public holidays, resulting in missed economic opportunities and disadvantaging consumers in the process.

“Some franchisees will incur a loss or be lucky to break even unless they consider reducing labour shifts and service. Once again this plays into the hands of the major supermarkets who can afford to carry such additional costs through their scale,” Mr Rogut said.

“We urge the Victorian Government to recognise the serious financial impacts that penalty rates have on small business and scrap plans to make Easter Sunday another public holiday. Declaring a public holiday does not declare greater sales for retailers, only greater, less affordable costs.
“As for declaring Grand Final Eve a public holiday, this proposal is completely absurd and would make Victoria the laughing stock of the nation. It is difficult to believe this proposal is seriously under consideration,” Mr Rogut said.

In response to the Victorian Government’s proposed changes to public holidays, one prominent Victorian-based service station franchisor has confirmed that some franchisees would incur a loss on Easter Sunday if penalty rates were applied.

“It is clear that the impact of such a change would potentially make trading on Easter Sunday unviable for these franchisees, who of course are small business owners in their own right,” Mr Rogut said.

“After the two public holidays and the one to follow on Easter Monday, surely small business owners should receive some respite from penalty rates on the Sunday as recognition of their willingness to trade.”

Mr Rogut said existing mandated penalty rates are already forcing some convenience stores to reconsider their trading hours and minimise working hours for employees.

“Rather than supporting workers, penalty rates actually place undue pressure on labour costs for small businesses and as such opportunities for employees are constrained,” Mr Rogut said.

“Convenience stores provide a valuable round the clock service for customers, particularly those in regional areas, but the nature of this 24 hour a day, seven day a week industry means that outdated penalty rates hit these businesses hardest.

“Penalty rate legislation fails to take into account the fact that many employees actually desire flexibility in their working arrangements, with many preferring to work nights or weekends to fit in with their lifestyle.

“Instead of seeking to add to the burden on small businesses by increasing the number of days for which penalty rates apply, the Victorian Government should in fact be looking to reduce this burden and promote a more supportive environment for small business in the process,” he said.

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