Businesses slam wage increase

THE Fair Work Commission has been criticised by business groups and unions alike following recent changes to wage structures.

The commission last month handed down two rulings, one to increase the minimum wage by $18.70 a week to $640.90 and another that saw Sunday penalty rates for casual employees reduced by 25 per cent. Both changes come into effect from July 1.

The Illawarra Business Chamber believes the decision to reduce Sunday penalty rates will benefit the entire Illawarra community.

"This is, and was never about ripping penalty rates away from workers," IBC chief executive officer Debra Murphy said. "It's about finding the middle ground to make it financially possible for owners of businesses to continue to trade on Sundays, as opposed to closing their doors because of their wage bill.

"The health and wellbeing of the Illawarra region is linked to our attractiveness as a tourist destination, and with a number of venues that couldn't afford to open on Sundays, it was becoming a real problem."

While the reduction in penalty rates has been welcomed, business groups have said the increase to the minimum wage could result in job losses and business closures, especially in the tourism industry.

"The negative impact of the increase will be felt most acutely by operators of regional tourism accommodation businesses," Accommodation Association of Australia chief executive officer Richard Munro said.

"Such small businesses face hardship because they will not be able to pay for the increase in wages - the largest expense for these businesses - by raising room-rates by a similar amount.

"It could result in accommodation businesses in regional areas closing."

While businesses are against the increase, South Coast Labor Council secretary Arthur Rorris believes it doesn't go far enough.

"It's something we welcome, but the rise in wages still doesn't match the rise in the cost of living that people are facing," he said.

Mr Rorris also said the lowering of Sunday penalty rates could see the end of the weekend as Australians know it.

"When Sunday trading was introduced it was done so that shifts were voluntary and employees could take them if they wanted them. Now we have business saying Sundays should be like any other day," he said.

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