Penalty rates, flexibility and pay conditions are on the agenda for the upcoming Productivity Commission review of the Fair Work Act, according to Fairfax Media. A leaked draft terms of reference for the review revealed the broad scope of inquiry this morning, as Council of Small Business of Australia executive director Peter Strong called on the Productivity Commission to be practical, rather than ideological in its approach to workplace issues. “The penalty rates issue is great, but it often gets tied up in ideology. It’s not about getting rid of penalty rates, the big word is actually practicality,” Strong told SmartCompany. “I think the Productivity Commission will stay away from ideology and actually look at the impact on productivity.” The wide-ranging review is also set to look at union militancy, the ability of the labour market to respond to economic conditions and the impact of current laws on unemployment. Small Business Minister Bruce Billson told SmartCompany the review has been designed to “support the objectives of the nation in terms of the economy and employment opportunities”. “It’s consistent with our election commitment and it will improve the incomes, livelihoods and employment opportunities for Australians and also the economy more generally. “We will take the changes to the next election so the electorate can decide if they’re for the good of Australia.” The review’s scope is pleasing to small business, but Australian Retailers Association executive director Russell Zimmerman told SmartCompany “it’s no surprise”. “I don’t think it’s really anything different to what the government said prior to the election. There is no great surprise and we’ve always supported the government and the Productivity Commission in its review of the Fair Work Act,” he says. “We will be looking at penalty rates and we’ll be seeking a reduction, particularly on Sunday.” The impact of red tape will also be considered as part of the review, which aims to establish “fair and equitable pay and conditions for employees, including the maintenance of a relevant safety net”, according to Fairfax. The terms of reference are yet to be finalised by Parliament. However, the leaked document revealed it would “maximise outcomes for Australian employers, employees and the economy, bearing in mind the need to ensure workers are protected, the need for business to grow, prosper and employ and the need to reduce unnecessary and excessive regulation”. While penalty rates are an important issue for small business, neither Strong nor Zimmerman expect them to be completely removed. “We don’t think at this point in time we need to have penalty rates abolished completely,” Zimmerman says. However, he does believe lowering weekend rates will help boost employment. “Some of our large retail chains are closing doors on Sundays and public holidays. While this happens no one is getting employed. Obviously this is a detriment to the Australian economy and we need to look at making things better, fairer and boosting productivity for the whole of Australia.” Strong says the broad scope of the review is necessary to meet the needs of small business. “When things get too wound up in one issue, reviews like this tend to lose their way,” he says. “From a small business point of view, it’s not one thing which affects us, it’s several.” Strong says flexibility and pay conditions are also important issues for small business. “With the flexibility legislation, many of us liked the laws which were introduced under the previous government, but they’re too hard to understand. So if the government and the commission is looking at how to better communicate with small business that’s a good thing,” he says. “Pay conditions are also important. In a small workplace none of us are pay masters… We need a system which is easy for both the employers and employees to understand. There needs to be no ambiguity.” Employment Minister Eric Abetz confirmed to ABC Radio the review would be broad and thorough, but did not elaborate further. “We're not in a position to pre-empt what's going to be in the terms of reference other than to say we did promise a comprehensive, broad review of laws,” he says. However, opposition employment spokesman Brendan O’Connor told ABC Radio the scope of the review was “frightening”. “This government has Work Choices in its DNA and it wants to return to reducing conditions of employment particularly for low and mid income earners,” he told ABC radio. “We know now the true intent behind this government in terms of reforming the Fair Work Act.” But Strong says the Productivity Commission has a strong track history. “We’ll get the right hearing and the right recommendations will come out of it, so long as the focus is on practicality, not ideology.” Originally the review was due to be launched on March 7, but earlier this week it was delayed until after the March 15 state elections in Tasmania and South Australia. This article first appeared on SmartCompany.
Above: Opposition leader Tony Abbott. The Liberal Party will abandon its promise to cut company tax by 1.5%, should it be elected, new reports have suggested, disappointing business groups which have long called for a cut in this tax rate. Opposition Leader Tony Abbott (pictured above) has consistently said he would fund a $3.3 billion parental leave scheme by raising company tax a further 1.5% on the biggest 3,200 companies while introducing a cut of the same size for other businesses. In net terms, this would have resulted in companies outside the top 3,200 having a company tax rate of 28.5%, down from the current 29%. But now, sources have told The Australian Financial Review a 1.5% tax decrease was still possible, but unlikely. This would mean the top 3,200 companies are slugged with an extra tax but other businesses would receive no relief. A spokesperson for Shadow Small Business Minister Bruce Billson told SmartCompany commitments can only be made based on the latest information. “As of the last budget we believe that we can introduce a modest cut to company tax,” he says. “Unlike the Government we will not make reckless spending promises without taking into account changing budget forecasts and a deteriorating budget position.” The move, if it is accurate, is sure to disappoint businesses. The business community reacted negatively last year to the Government’s announcement it would abandon a company tax cut for SMEs. Abbott yesterday reaffirmed his commitment to the paid parental leave scheme and said it would be funded by increasing the company tax rate for Australia’s largest 3,200 companies. “It's been a signature policy of ours since early 2010 and I want this important reform to be one of the things for which an incoming Coalition government is remembered,” he said. “I want to stress that this isn't just a women's issue, it's not just a families issue, it's an economic issue and if we can get more women productively into the workforce, that's good for the economy as well good for families as well as good for society.” Earlier this year SmartCompany investigated the policy changes small business leaders wanted to see this year and a cut in the company tax rate was a regular feature. SmartCompany contacted the executive director of the Council of Small Businesses of Australia, Peter Strong, but he was unavailable to comment prior to publication. Executive director of the Australian Retailers Association, Russell Zimmerman, previously told SmartCompany changes to the current tax system are needed. “If there are good reasons to make changes, changes that make more economic sense, then surely we should make those changes,” he said. Chief executive of the Australian Industry Group, Innes Willox, was quoted in The Australian Financial Review as saying there were “deep concerns” about Abbott’s parental leave scheme. He said the proposal would, “put a huge additional cost on bigger companies”. “At times like these businesses need reductions on cost burdens, not new ones”. The move comes alongside an admission from the Opposition the budget may not return to surplus for some time, with Opposition Treasurer Joe Hockey signalling a longer than expected wait. “We are not going to go down the path of austerity simply to bring the budget back to surplus because it would end up being a temporary surplus, depending on how big the deficit is that we inherit,” he said yesterday. Earlier this year Hockey pledged on ABC Radio’s AM program the budget would be returned to surplus in the first year of governing, “and every year after that”. This story first appeared on SmartCompany.
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