Recently I published an article on the threat to penalty rates from a government determined to drive the wedge further between the rich, and frankly the rest of us.
Now it would seem everybody is talking about what has been dubbed WorkChoices 2.0.
The government led by the man who told us all that WorkChoices was…
“Dead, Buried, and Cremated”
…now has all the vital ingredients of WorkChoices back on the agenda. Penalty rates, minimum wages, unfair dismissal, enterprise bargaining, even workplace bullying are up for review by the notoriously right-wing Productivity Commission. The same Productivity Commission that recommended Joe Hockey’s disgraceful unfair budget that the country rallied against.
Maybe the architects of WorkChoices remembered the title of John Howard’s book Lazarus Rising and thought it was time to reincarnate WorkChoices?
We hear a lot about the plight of the poor retailer struggling to pay double time to the kid trying to support themselves through uni or earn some spending money so they don’t have to hit up their cash-strapped parents.
Anyway, things are so tough for these retailers that they are pushing to have restrictions lifted so they can be open for even longer hours.
Is it just me or does there seem to be a conflict here? It seems a tad strange to complain about penalty rates and then ask for extended trading hours so you have to pay more overtime.
Last time I wrote about penalty rates I looked at major retailers like Woolworths, however the government is keen to make this review of industrial relations all about the little guy.
The Abbott government is keen to create the illusion of looking after the struggling small business, but this is just that, an illusion.
The destruction of penalty rates or minimum wage is not going to help in any real way. Tony Abbott and his Coalition henchmen would have you believe that having these retailers save on penalty rates and wages will make a world of difference to the struggling small retailer, but is this really the case?
So let’s do the math, let’s assume the person serving you in the store is on $24 an hour. If the owner pays that person double time for the opening hours on the weekend that’s an extra $384 for the 16 hours over the weekend.
While I agree that is a significant amount, we need to also bear in mind this business is likely paying thousands in rent to a landlord like Westfield that same week, and is also likely paying interest to a finance company on tens or hundreds of thousands worth of stock holdings. These are the real costs of business the Coalition seem to have forgotten or more likely just choose to ignore.
Businesses complaining about penalty rates in my mind are akin to someone who buys a house next to the airport and then complains about the noise.
Anyone entering a retail business who has not factored wages and overtime into the equation is doomed to fail, and when that happens is no doubt then tempted to blame government red tape or wage conditions rather than their own incompetence for their failure. The same goes for those in the service industry.
I’m sorry to have to state the bleeding obvious but if you open a store, café, or restaurant and don’t think you will be paying penalty rates or opening on a weekend then you are a moron.Don’t blame the government, the unions, or your staff for your own stupidity.
While I have no doubt many of these small businesses are doing it tough through no fault of their own I hope they look at the government’s rhetoric with open eyes.
A Coalition government will always talk up how they look after small business, however at the same time they will also cosy up to the big end of town. These big retailers that are out to crush the little guy have full-time staff employed to lobby the government, and on top of this also use PR firms to look after their political interests also. Given this amount of lobbying is anyone really surprised that so much deregulation is on the agenda?
When the government acts on the Productivity Commission report look out for changes to regulations that control market share allowing the majors to increase their market share by buying out or crushing smaller competitors. It will also be interesting to see if there are areas deregulated giving a green light to Coles and Woolworths to move into pharmaceuticals in a major way as they have spent years lobbying for. Through their loyalty programmes this would give them data on virtually every detail of our lives, even our medical history via our prescription records.
There are signals of what may be to come already from the Commission.
The Coalition will be hoping that the gullible will continue to believe that they can serve two masters at once, big business and small business.
For those wondering how serving two masters at once works, ask the owners of an independent service station, hardware store, or perhaps an independent bottleshop.
In fact in the last two weeks we have seen an example of how serving two masters doesn’t work.
In NSW Luke Foley the Labor Party leader has had the jump in to help try to save the struggling newsagents. In a move of callous disregard for small business the Liberal government was looking to allow the sale of lottery tickets from Coles and Woolworths, something that would send many a newsagency to the wall.
It is no secret that many a small retailer will fail, however we need to look at realistic reasons why, not just use the statistics to punish the poor worker and boost the profits of billion dollar retail giants.
As someone who has spent over 20 years in the retail supply industry I can shed a light on some things making it hard for the little guy.
The biggest issue is economy of scale. An independent retailer competing with a major chain is for the most part fighting a losing battle. An independent store purchasing 6 of an item from a supplier is not going to be buying at the same price as the major retailer buying 60,000 of the same item, nor are they going to have the same terms of trade such as the right to return goods that don’t sell, or be guaranteed markdowns on them.
The big retailers on top of discounted prices also receive huge rebates from suppliers, and also receive rivers of money for product placement in store as well as funds from suppliers for advertising as it is cheaper to advertise with a retailer than without as the retailers get huge discounts on advertising rates as they advertise in all press forms so heavily.
On top of all this many of them also pay vastly lower rent per square metre as they are seen as drawcards for shopping centres. Then we have the teams of accountants employed by the majors to ensure that they will pay a fraction of the tax rate the small business will be paying, and loyalty programmes that the little guy cannot even hope to hold a candle to.
With all of this going on the kid living off the penalty rates of a minimum wage hardly compares.
For independent retailers facing an ongoing attack by the majors with a chainsaw the Coalition are looking to offer a band-aid to the independent small business to stem the bleeding from their gaping wounds all the while subsidising the fuel in the majors chainsaws. What is even more insulting than the offer of a band-aid is that the Coalition are seeking the cost of that band-aid to be passed on to struggling students, or those working extra shifts and second jobs to feed their family.
We are sure to hear an avalanche of distorted facts and figures from Employment Minister Eric Abetz that justifies changes to penalty rates. These facts and figures will be doctored up using the traditional smoke and mirrors technique of the Productivity Commission and served up to Abetz and Abbott on a silver plate.
The Coalition will no doubt be hoping for the same distorted information from the Fair Work Commission on minimum wage recommendations.
Should the Coalition have their way the struggling small business will save a pittance, while the majors will save Millions of dollars. It doesn’t take a mastermind to realise that this extra profit for the majors will be used to squeeze even more of the independents out of the industry by further diminishing their profits.
All of this is known as helping small business by using the Liberal method.
Putting them in their place.