Penalty rate reduction inevitable: Turnbull

06 October, 2015 by
Aoife Boothroyd

Prime Minister Malcolm Turnbull has made his strongest indication yet that Sunday penalty rates will be reduced.

Speaking with Melbourne radio station 3AW, Turnbull described Sunday penalty rates as a hallmark of the old economy, but stated that there would need to be acceptance from workers that any changes would not leave them worse off.


“The only reason they’re different, I assume, is history,” Turnbull told 3AW.

Turnbull said that over time, Australia will see a move to a "more flexible workplace", noting that it was imperative to get the support of workers and unions.


“… 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.”

In August, the Productivity Commission released its draft workplace reform recommendations. The draft report recommended that Sunday penalty rates for hospitality, entertainment, retail, restaurant and caf workers should be cut, and that modest pay increases for workers on minimum wage should be adopted.


In response to a recent protest over the proposed cutting of penalty rates in Melbourne last month, Australian Council of Trade Unions secretary, Dave Oliver said that any cut to penalty rates suggests that a hospitality worker’s weekend is not as valuable as anyone else’s in the community. Oliver also added that those receiving penalty rates are among the nation’s lowest paid workers.

However, Turnbull says that those earning penalty rates could potentially be compensated through the tax system via incentives or credits should the recommendations be accepted.

The Productivity Commission’s final report will be released in November.