News

Wage Hike Further Impacts on Industry

Fair Work Australia’s justice Iain Ross has the national minimum wage for Australia’s 1.4 million lowest paid workers should be raised by 2.9% to $17.10 an hour.

It will take the wages of the lowest paid workers from $589.30 to $606.40 each week.

The ACTU had asked Fair Work to push up minimum wages by $26 a week, while employer body the Australian Industry Group said it should be around $14. The Australian Chamber of Commerce and Industry had said the rise should be restricted to $9.40 a week.

But operators of accommodation businesses are facing another financial impost as a result of the minimum wage decision.

Responding to the decision that the minimum wage will increase by 2.9%, the Accommodation Association of Australia says it’s another example of businesses in the tourism industry being subjected to higher costs.

“It’s well documented that broadly speaking, trading conditions for tourism businesses are far more difficult than other industries,” said the chief executive officer of AAA, Richard Munro.

“This was highlighted in our submission as one of the reasons why the increase in the minimum wage should have been capped at 2.25%. Given labour is one of the highest costs for tourism accommodation businesses, the decision makes doing business even tougher than it already is.

“On top of this increase, the accommodation industry is struggling to quantify the financial impact of the introduction of the carbon tax – which comes in exactly one month from today.

“Our industry is also in line to be penalised by Federal Budget measures such as the increase in the passenger movement charge and the proposal to lift the managed investment trust withholding tax.

Also of note is that although the process doesn’t commence until 2013-14, the increases in the superannuation guarantee are already imposing additional costs on businesses in our industry – they have started to allocate higher amounts in their budgets for accrual of annual leave, long-service leave and other forms of leave.

“For tourism accommodation businesses, it makes the task of continuing to provide some of the highest levels of customer service in the world more expensive.”

The announcement of an increase to award wages above the rate of CPI will have a disproportionate impact on the hospitality sector, including possible job cuts.

AHA (WA) CEO Bradley Woods said the WA hotel and hospitality industry employs nearly 40,000 people, with some operators already facing challenging economic conditions and tight business margins, today’s announcement will force some hospitality operators to consider reductions in working hours.

“While we are not against wage increases we believe they need to be connected to productivity and flexibility improvements for the industry, particularly in areas where it has undergone severe economic hardship.

Resource-rich regions continue to perform strongly; the majority of hotels are not benefiting from the mining boom and are facing flat trading conditions for the coming year. Last year’s significant increase resulted in a 7.8% reduction in working hours available in our industry and hoteliers will again be forced to assess their rostering to minimise the additional costs on their businesses.

“The impact of increased wages on employers cannot be viewed in isolation. WA’s hotels and hospitality businesses are also bracing for increases in electricity costs, and further rises in the costs of other products supplied to hotels as a result of the carbon tax and now this wage rise. For businesses in the resource and mining regions this increase may be manageable but for hotels and hospitality operators in the struggling tourism regions it will be a cause for serious concern.”

Related Articles

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
Back to top button
WP Tumblr Auto Publish Powered By : XYZScripts.com
AccomNews
0
Would love your thoughts, please comment.x
()
x