Penalty rates to remain unchanged in an Abbott government, angering small businesses

Under an Abbott government, the Productivity Commission could be charged with overhauling workplace laws, but penalty rates will remain unchanged.

Small business hopes were once again dashed that penalty rates would be lowered as the Coalition’s workplace relations spokesman, Eric Abetz, said yesterday there would be no legislation to change penalty rates.

According to The Australian, Abetz said penalty rates would remain the “province of the independent umpire, the Fair Work Commission”.

Executive director of COSBOA, Peter Strong, told SmartCompany penalty rates need to be changed.

“There should be changes to penalty rates because they are too high. We’re not saying to get rid of them, but they do need to be lowered. Currently, the rates are so high they’re getting rid of jobs,” Strong says.

In an interview with Sky News yesterday, opposition small business spokesman Bruce Billson avoided directly giving answers in regard to penalty rates.

“In relation to the workplace regime, we’ve said there’s a flexibility problem. We know there is a militancy problem; that is why we want to reactivate a genuine building and construction commission. When that commission was established we saw a 10% increase in productivity in the building sector alone,” he told Sky News.

The Australian reported Coalition sources said the Liberal Party were “actively considering” an in-depth investigation into the Fair Work regime to be conducted by the Productivity Commission, but major changes to the Act would be delayed until after the 2016 election.

It is thought the plan was designed to minimise a potential campaign by Labor and unions to convince voters the Coalition would bring back John Howard’s hotly debated WorkChoices regime.

Billson reiterated yesterday past Coalition comments saying WorkChoices will not come back under the Liberals.

“Look, we’ve said WorkChoices is dead, buried, cremated and there is a memorial service conducted periodically when the government tries to roll out a fear campaign which is completely baseless,” he said.

Strong says getting the Productivity Commission to review the Fair Work Act is “an interesting approach”.

“My immediate reaction is to support [the] Productivity Commission… We know that’s what it should be all about, but people’s ideologies get in the way and often hamper productivity,” he says.

Strong says the Coalition would delay changes to the Fair Work Act because of voters’ reactions around election time.

“I think they’d delay that because there is an election coming. They’ve basically said that they’ll leave it until the potential Productivity Commission report comes out I suppose,” he says.

The establishment of a Productivity Commission review is consistent with the Liberal Party’s view the Fair Work Act should be the responsibility of the commission rather than the three-person panel appointed by the government.

Abbott said last week he would release the industrial relations policy “sooner rather than later”.