What will happen to struggling students if Tony Abbott slashes penalty rates?

March 09, 2015
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Workers could be left severely out of pocket if Tony Abbott seeks to slash penalty rates next year. Mr Abbott initially promised to leave penalty rates untouched, but he now fears higher hourly pay-rates may be discouraging businesses from hiring and rostering more workers. The PM has ruled out any changes prior to a 2016 election mandate – so people can relish double-time for now.

Teenagers and young adults are among the most reliant on penalty rates. Individuals undertaking secondary and tertiary study are restricted in their available work hours – often having to sacrifice their weekends to make a living. Those sacrifices may not be enough for students to get by if weekend pay is cut by half, or even up to two thirds.

And weekend shifts would not be the only ones stifled. Social science student Vickie Pearson says she struggles to get by on two short shifts a week. Vickie works a night-filler position at Coles supermarket, and due to study and other life-commitments, she is only able to work six hours a week.

The saving grace for Vickie, is that she fills the shelves from late at night through to the early hours of the morning – and she is rewarded accordingly with high penalty rates.

Vickie says that the removal of penalty rates is unfair on people who work tougher hours, and she will be forced to sacrifice other life commitments to take up more hours if the change goes ahead.

“If I’m working at 12 o’clock midnight, and somebody else is working at 12 in the afternoon and getting the same pay, then that’s completely unfair.”

“Study and placements take up so much of my time that I have to take up late hour shifts just to make enough to survive.”

She also adds that many students may refuse to work for standard wages during weekends, public holidays, and after hours – instead resulting to welfare.

“I’ve talked to some of my co-workers who also study, and they said they wouldn’t continue working nightshift for half the wage.” She adds that “they’re limited in their free time, so they’d probably try and get money from Centrelink instead.”

The issue does raise an interesting question of which employers can actually afford to pay penalty rates. Many large corporations could pay their workers quadruple rates and still create profit, but small businesses are not so fortunate.

If I’m working at 12 o’clock midnight, and somebody else is working at 12 in the afternoon and getting the same pay, then that’s completely unfair.

Many smaller businesses cannot justify staying open late, or on weekends, because of how expensive it is to pay their workers. The more economically viable choice is for them to stay closed.

Peter Wyatt operates a tow-truck business from a small factory in which he resides. Peter says he “would love to employ casual workers and factory hands to help him out on weekends” – but the skyrocketed cost of hiring during those times would drive his business down.

“There are always little jobs around the factory that someone could be doing, and I have no problem with helping someone afford their schooling by giving them some work. But I also have to think about myself – and I couldn’t make a living if I had to pay them penalty rates.”

The decision to kill off penalty rates would be a gamble. It could potentially encourage businesses to hire and roster workers that they otherwise would not. At the same time, however, it could also be detrimental to young people, who rely on the boosted rates to get by.

And if more young people are struggling to get by, there will be further strain on the already crippled welfare system in Australia.

Rowan Forster

Rowan is a third year journalism student at RMIT University. He recently discovered that avocado is actually a fruit, and not a yoghurt.

Image: George Pauwels, Flickr Creative Commons license