KIAMA businesses have joined the debate after a federal cabinet minister joined calls for a fresh look at the impact of penalty rates on small business.
Trade Minister Andrew Robb told parliament last week that penalty rates had damaged the tourism industry.
His comment followed an article by his Victorian Liberal colleague Dan Tehan, who argued penalty rates are too high and are crippling small business operators who want to open on weekends.
Mr Robb said the previous Labor government had damaged the tourism industry through the carbon tax, higher visa charges and cutting funding to Tourism Australia.
"They've also increased penalty rates, which have crippled so much of the tourism industry in Australia," he told parliament.
Steve Willis, owner of Red Rooster Kiama, said the commission/cost of his employees had made weekend trade "really unproductive", and affected his ability to employ young people for weekends.
"I believe over the past three years, the cost and red tape to employ someone has really hindered productivity in Australia," he said.
"In hospitality, in my case, it is a struggle on weekends and public holidays.
"For our small shop, it's an issue. It might not affect bigger stores as much. It has reduced my ability to put staff on."
Mr Willis said employers needed greater flexibility with regard to how they employed someone.
"Conditions are very tough for employers in the retail sector; retailers are struggling with labour costs."
Kiama Supply Co Mitre 10 owner Ross Simmons said if penalty rates were to be cut on Sundays to help ease youth unemployment and the burden on regional businesses, there would have to be some form of trade-off.
"But the unions won't allow that to happen," he said.
"It's not so much a problem for my business as some others.
"I think the food industry struggles more."
Mr Simmons said while they weren't really a business which relied on being a tourist destination, they did trade in a tourist area.
"The business that we do during the tourist peaks is something we enjoy," he said.
"Indirectly it affects us.
"Businesses will only spend as much on penalty rates as that business allows ... you can't afford to stay open if you're going to go backwards.
"No-one wants their salary reduced. Everyone wants to maintain their same standard of living, everyone wants more free time and more money to enjoy their free time."
Kiama Newspower owner Shirley Johnston said while they didn't employ those under 18, they had cut their opening hours on Sundays.
"We don't operate as long because of the rates," she said.
"In the city, [in some suburbs] newsagents pretty well close at 11 or 12 o'clock; because we're in a tourist area, we're expected to be open longer.
"This year, it seems to have slowed down, but we just rationalised our staffing again, and we're taking Sundays back, as it's too expensive [to operate with penalty rates]."
Employment Minister Eric Abetz has told Fairfax Media the government will not legislate any changes to penalty rates, leaving any decision to the Fair Work Commission.
In January, the government made a submission to the commission's review of the award system, asking it to consider whether extra pay for working specific times was appropriate.