It looks like Australia is ready to tackle the penalty rates that small business hates

Australian prime minister Malcolm Turnbull. Photo: Getty Images

Prime minister Malcolm Turnbull has made the strongest signal yet that the government could reduce Sunday penalty rates, saying that they are “history” from an old economy.

In a radio interview with Melbourne’s 3AW Turnbull said the double-time payment no longer holds the same weight in today’s seven-day economy.

“I think over time you will see a move to a more flexible workplace,” Turnbull said.

“The only reason they’re different, I assume, is history.”

He suggested one way of compensating Sunday workers could be through incentives or credits.

“If you want to get the support of workers and unions … then you inevitably would have to persuade them that in net terms they’d be better off,” he said.

“And any reform has got to be able to demonstrate that people are certainly not going to be worse off and, overall ideally in net terms, better off.”

His comments follow those of Opposition leader Bill Shorten who challenged Turnbull and employment minister Michaelia Cash to make penalty rates a key issue ahead of the next federal election.

“For people on $40,000 and $50,000 and $60,000 dollars a year, penalty rates are the difference as to whether or not they can afford to send their kids to a private school,” he said.

“In the retail industry and in the hospitality industry – they are on average, along with agriculture, the lowest paid industries in Australia,” he said.

“If you were to take away penalty rates from these groups, you would even depress their wages further,” he said.

While the productivity commission has suggested bringing Sunday loadings into line with Saturday for retail and hospitality sector, the unions say that it would hurt those already on a lower income.

Restaurant & Catering Australia (R&CA) CEO John Hart says the industry is currently “hamstrung” with some businesses operating at a loss on some days, particularly public holidays.

“Research commissioned by R&CA indicates that 52% of businesses would employ more staff if penalty rates were reformed and 42% said they would open additional hours,” he said.

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