The Lake Times spoke to several business owners after federal Trade Minister Andrew Robb blamed penalty rates as one of the factors "crippling" the tourism industry and Victorian Liberal Dan Tehan suggested the penalty could be halved.

Angela Cramp, Shellharbour Village Chamber of Commerce spokeswoman, said retail hospitality businesses were expected to open on weekends and public holidays and penalty rates were not fair on employers.

"You can go shopping 24 hours a day - people want freedom of retail seven days a week, so why should businesses be penalised for providing a service and not be commercially viable?" she said.

"We need to accept either businesses close at 5pm on Friday or pay everybody a normal rate."

Ms Cramp said the pressure on Shellharbour Village had increased with the growth of online shopping and Stockland Shellharbour.

"The foot traffic has left the area," she said.

For several of the business owners, high penalty rates meant they worked on weekends to limit their costs.

Shellharbour Ice Cream and Cafe co-owner Mary Novak said the business had to employ one less staff member on those days.

"We can't afford it - we work ourselves to reduce the weight," she said.

Shelley's Cafe co-owner Michelle Williams said she and her business partner also worked and kept other staff to a minimum.

"I'd change it. I've got four children all under the age of six and I don't want to be missing out on them," she said.

"We've had the business since July last year and I've had one weekend off.

"In hospitality, they shouldn't have them because that's our busiest time - you either work in hospitality or you don't."

Shique Floral Design owner Sharon Crilly said owning a business has meant giving up her family days and if penalty rates were not as high, she might be able to give people more shifts.

But she also felt staff were entitled to penalty rates if they did work on those days.

"It's the owner who chooses to open and we're expected to be open at [the customer's] beck and call," she said.

Shellharbour Bait and Tackle owner Craig Rushby agreed, saying it was his choice to own a business.

"If people work weekends, they probably deserve their penalty rates," he said.

But Mr Rushby said governments could have a role to play in helping small businesses afford staff penalty rates.

"We should be able to have some sort of tax incentive so we don't pay tax on Saturdays and Sundays, so [employees] don't lose and the business doesn't lose," he said.

"They'll spend it and that generates more sales elsewhere."

He believed cutting penalty rates altogether could be the "thin edge of the wedge".

"It wouldn't be long before big business stopped paying it as well and then you become America," he said.

Member for Gilmore Ann Sudmalis said the situation was under review.

However, she said a "flexible" workplace arrangement with her 27 employees had worked for both parties when she owned a fudge business.

"If they have work experience, the door will not close in their face and it's far better if that's paid work experience," she said.

She said government incentives were unlikely considering the budget deficit was heading towards $120 billion.