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ARA says: New award to cripple small retailers - Wage bill rise, no productivity gains, archaic penalty rates

Peak retail industry body the Australian Retailers Association’s (ARA) said the new retail award announced last Friday could cripple small retailers with up to $28,473 in wage bill increases, no productivity gains and an archaic penalty rate structure.

ARA Executive Director Richard Evans said the costings analysis based on a roster for a small retailer with two full time and two casual employees indicated wage bill increases of up to $28,500 with state costings estimated to be the following:

New South Wales:                   $28,473p/a          (16.5% increase)
Victoria:                                 $18,821p/a          (11.5% increase)
Queensland:                           $25,402 p/a         (15.5% increase)
Western Australia:                  $19,496 p/a        (11.5% increase)
South Australia:                      $26,123 p/a        (15.6% increase)
Tasmania:                               $23,693 p/a        (14% increase)
Australian Capital Territory:   $24,863 p/a        (15% increase)
Northern Territory:                $15,581 p/a         (9.5% increase)

"To an average Australian small retailer the financial impact of the new award will hit their bottom line like a Mack truck driving through their shop window. Larger retailers may be able to absorb the new award's wage bill rise but smaller retailers simply cannot afford another blow in this tightening economic climate.

"To add insult to injury, the so called ‘modern' retail award also includes a penalty rate structure reminiscent of the 1980s and ignores the seven day trading demands of modern consumers.

"Under the new award smaller retailers are penalised for being open to meet consumer demand with overtime and loadings taking effect after prescribed working days not prescribed working hours. This means to stay open and meet consumer demand a small retailer must pay more for staff to flip burgers on a Sunday than they do on a Monday.

"The AIRC's misdirected focus on simplifying and rationalising the new retail award failed to answer retailers' call for a penalty rate structure recognising the modern deregulated retail market.  The result is an unnecessary financial imposition on retailers who are struggling and who were just beginning to smell an air of confidence following the Rudd Government's Economic Stimulus package.

"There is no doubt consumers will foot the bill through price increases on goods and groceries.  The AIRC's new retail award has ensured prices will go up and the consumer will pay at a time when they can least afford it," Evans said.

For over 104 years, the Australian Retailers Association (ARA) has been the peak industry body in Australia's $292 billion retail sector which employs over 1.2 million people. As an incorporated employer body under the Workplace Relations Act and with a range of member services including business consulting, policy development, advocacy and education, the ARA promotes and protects over 5000 independent and national retailers throughout Australia. Visit www.retail.org.au or call 1300 368 041.

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