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Minimum Wage Increase Would Hit Regional Businesses

April 2, 2014 Association No Comments Email Email

The accommodation industry has recommended to the Fair Work Commission that there should be no increase in the minimum wage in 2014.

In its submission to the Annual Wage Review, the Accommodation Association of Australia has cited increases in penalty rates and the superannuation guarantee as reasons for taking this position.

“More than 80 per cent of Australia’s accommodation businesses are small-to-medium enterprises, while 75 per cent of the Accommodation Association’s members are located in regional areas and any increase in the minimum wage would increase or impose financial hardship on them,” said the Association’s Chief Executive Officer, Richard Munro.

“For casual staff under the hospitality award, penalty rates apply on top of a loading, meaning that on public holidays, for example, employers have to pay casual staff at 250 per cent in addition to the 25 per cent casual loaded rate.

“According to our submission, this has ‘the potential to cause significant economic difficulties for the accommodation industry’ because businesses will find it difficult to make a profit on these days.

“This will be brought sharply into focus over Easter when casuals who work over these four public holidays days declared in NSW will receive the equivalent of 11 days’ pay.”

“With minimum superannuation payments required to increase to 9.5 per cent from 1 July, this represents another imposition on the bottom line.

“Therefore, there should be no increase to the minimum wage in the hospitality award. Any increase could impact on the viability of some small accommodation businesses, notably motels and B&Bs in country areas.”

The carbon tax has also had a negative impact on the accommodation industry.

“Accommodation businesses are heavily reliant on electricity, food production and transport and in most instances, the cost to operators of these suppliers has increased following the introduction of the carbon tax,” Mr Munro said.

“It’s another reason why our industry is calling for no increase in the minimum wage.

“In addition, we strongly support the repeal of the carbon tax, as a priority.”

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