Victoria’s new public holidays will cost business $700 million: “They should hang their heads in shame”

Business groups are up in arms over the Victorian government’s decision to forge ahead with two new public holidays that could see businesses fork out an extra $105 million in penalty rates.

The changes mean Easter Sunday and Grand Final Friday will become public holidays in Victoria, meaning the state will have the most holidays in Australia.

New South Wales has 11 public holidays per year, including state and national holidays, with Queensland and Western Australia close behind, recognising 10 state and national annual holidays.

The Victorian government has been quick to point out the two new holidays are expected to deliver between $156 million and $312 million in benefits to the Victorian economy, according to an independent impact study by PwC.

However, the same study shows the extra holidays will mean the local economy will miss out on between $717 million and $898 million in production, clearly outweighing the proposed benefits.

Victoria’s acting Small Business Minister, Gavin Jennings, said in a statement Victorians work hard and deserve two extra working holidays.

“The new holidays will deliver massive benefits across Victoria, boosting the state’s tourism and hospitality sectors and helping Victorians spend more quality time with their families and friends,” Jennings said.

“Grand Final Friday will see Melbourne’s streets buzzing and our regions full of visitors, cementing Victoria’s reputation as Australia’s sporting capital.”

But the small business lobby has slammed the decision, with Council of Small Business of Australia chief executive Peter Strong telling SmartCompany it is very disappointing to see the holidays announced by the acting small business minister.

“This is a person who’s supposed to be representing the needs of 400,000 people who run businesses that employ at least 1.2 million other people,” Strong says.

“The care factor seems to be zero and he wants to look after what a very small number of people want. This might keep people happy for one day, but it won’t make an economy.”

Strong says the Victorian government should “hang their heads in shame” and undo the decision.

READ MORE:Hotel owners say they’d be bunnies to stay open over Easter, as penalty rates put the bite on small businesses

Meanwhile, the Victorian Employers’ Chamber of Commerce and Industry has also slammed the decision to introduce two new public holidays, pointing out the new rules will mean almost two million full-time employees will not show up to work on Grand Final Friday.

VECCI says penalty rates for those who will be working in the retail and hospitality sectors are expected to set business owners back more than $100 million across the two holidays, with wages up to 50% higher for Easter Sunday and 150% higher for the eve of the grand final.

Business groups are also concerned the changes will see Victorian small businesses placed at a disadvantage in comparison to states with fewer public holidays.

Steven Wojtkiw, chief economist for VECCI, told SmartCompany the new rules will create a financial disadvantage for small businesses in Victoria.

“We consider the new public holidays certainly not small business friendly,” he says.

“Small business needs to trade and trade competitively. The additional cost to operate a small business on public holidays with higher penalty rates means many small businesses will be operating at a financial disadvantage.”

Wojtkiw says VECCI will continue to encourage the government to rethink this policy and in the meantime small businesses should make their voices heard.

“We encourage small business owners and operators to make their own submissions to the government indicating the additional costs and or loss of business that will result from the new public holiday,” he says.

“The new holidays are not job-friendly, which is a key priority of the Andrews government. VECCI urges the government to rethink their intentions.”