Discussion paper

Fork in the road: the impact of the two major parties’ penalty rate policies in the 2019 federal election

Work insecurity Retail trade Food industry and trade Wages Australian federal election 2019 Liberal Party of Australia Australian Labor Party Penalty rates Australia

On February 23 2017, the Fair Work Commission ruled in favour of cutting Sunday and public holiday penalty rates for awards in the hospitality, fast-food, retail and pharmacy industries.

The McKell Institute has explored the impact of reducing penalty rates since that initial ruling in 2017, focusing on the aggregate national, state and electorate level costs to workers associated with the proposed changes.

Since the 2017 ruling by the FWC, debate around penalty rates has been front and center in the national policy conversation. The 45th parliament – the most recent parliament – is now dissolved, with a Federal Election scheduled for May 18, 2019. During the 2019 Federal Election, the two major parties’ policies regarding penalty rates have emerged as a significant point of distinction.

This discussion paper aggregates the likely impact to workers’ pay under the policy of the incumbent Government, and that of the Federal Opposition, over the forthcoming three-year parliamentary term. When forecasting the Sunday and penalty rate incomes expected to be received over the forthcoming parliamentary term in the industries subject to penalty rate changes, it identifies that award-reliant weekend workers will likely receive $2.87 billion less under existing policy settings, supported by the Government, compared to under the policy settings proposed by the Federal Opposition.

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