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Independent retail businesses find the Fair Work Commission wage increase unsustainable

June 4, 2018 Business News No Comments Email Email

The decision by the Fair Work Commission today to increase the award rates by 3.5% will, according to Jos de Bruin CEO of Master Grocers Australia, be a serious setback to the sustainability of thousands of family enterprises and private businesses in the retail industry. The Fair Work Commission believes that the Australian economy is strong, employment growth is healthy, wage growth and inflation are low, and these combined circumstances justify an increase of 3.5% to all industry awards

Mr. Jos de Bruin said, “This increase comes at a time when competition continues to impact on the ability of small businesses to survive and the cost of doing business continues to escalate. Now it’s going to cost more to employ staff, so where is the incentive to provide more jobs?”

“Higher wages mean that less people will be employed in the retail industry. Retailers will look to putting staff off rather than increasing job opportunities. Many retailers are losing confidence in their ability to battle on and some will just close their doors.”

“MGA was hopeful that the increase would be lower after the 3.3% they had to cope with last year. An increase of this size will make life harder for family run enterprises to survive at a time when profits are low, and margins are slimmer than ever.”

Mr de Bruin concluded “that there have been instances of store closures in the past year due to the cost of doing business. Now employers are going to face paying higher wages in the coming year and they will simply not be able to make these payments and remain in business.”

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