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Easter penalty rates hit smaller operators

Small business owners in popular regional locations have warned they are the biggest losers from public holiday pay rates, with many closing their doors over the Easter long-weekend.

Lou Perri, the owner of the well-known Stunned Mullet restaurant in Port Macquarie, said there was a clear need to move away from the universal application of penalty rates. He told Dynamic Business that double time and half pay rates forced him to close his restaurant on Good Friday and would force him to close again on ANZAC day.

“We were only closed for Friday, but we have to open on Saturday and Sunday. To be honest we were sort of forced to open yesterday (Easter Monday) as well just given the way the holidays were falling,” he said.

Mr Perri warned small business owners in regional areas where especially hard hit by excessive penalty rates because their peak trading periods were usually on weekends and public holidays when visitors tended to arrive.

“The reality is, in a nutshell, as a regional operator our peak period of very high demand are weekends and public holidays. And those are also the times when we have overwhelming critical mass in our areas. And we can’t make it happen because we are getting penalized for being open and providing a service when the market and demand is here. It’s crazy,” he said.

Businesses in NSW have been hit with four consecutive public holidays over the Easter long weekend and will be hit again on Friday with ANZAC day. Usually, Mr Perri would not open on Easter Monday but because of school holidays and ANZAC day there was a commercial need to keep the doors open.

“I think that the blanket approach to public holidays particularly when it comes to regional areas is an absolute joke,” he said. “It doesn’t make any sense to pay people public holiday rates… It stifles any possible employment opportunities.”

Mr Perri said small business owners in Port Macquarie tended to “pull back” and rely on family members and close friends to avoid penalty rate costs. He warned this meant many people who would like to work public holidays were denied that opportunity. He suggested there would not be a single local small business operator in a commercially viable position at the end of a public holiday unless they imposed a 45 per cent surcharge on their customers.

Australian Retailers Association executive director, Russell Zimmerman, also said the additional impost of penalty rates meant many retailers had to rethink staying open on public holidays. Under the General Retail Award, an employee is also entitled to double time and a half on a public holiday. This requires retail employers in NSW to fork out nearly $50 an hour per worker just to trade.

“If you work on an ordinary Saturday, you are paying time and a half. On Sunday you are paying double time. On a public holiday you are paying two and a half times,” Mr Zimmerman told Dynamic Business. “There is a possibility that retailers who actually are employing staff would lose money.”

“Some retailers have already got to a stage… (where) they just simply refuse to open those stores where they can get out of them on the lease.”

Mr Zimmerman said the retail sector was crying out for the government to lower penalty rates as a matter of urgency, but said there was “no guarantee” this would happen.

Spokesman for Tourism Accommodation Australia, Peter Cook, also confirmed statistics published in early April suggesting that, of 225 hoteliers surveyed, two thirds would not open or offer reduced services over the Easter holiday period.

“It transpired much as we suggested,” he told Dynamic Business. “So clearly it had a major effect.”

The survey suggested that only 13 per cent of operators said they were expecting to make a profit on Good Friday and Easter Monday, compared to 54 per cent who were anticipating a loss. About 10 per cent said they would not open.


















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Joe Kelly

Joe Kelly

Joe Kelly is a writer for Dynamic Business. He has previously worked in the Canberra Press Gallery and has a keen interest in business, the economy and federal policy. He also follows international relations and likes to read history.

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