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While employer groups cried foul over the recent minimum wage increase, the reaction of small business owners was mixed.
Last week the Australian Fair Pay Commission announced an increase of $21.66 a week in the federal minimum wage, effective from October 1, 2008. This sum was close to double that proposed by employer groups and many, led by the Australian Chamber of Commerce and Industry, warned that the higher than expected pay rise handed to more than 1 million workers would increase inflationary pressures on the domestic economy.
But Steve Bennett, managing director of Sydney-based Benbro Electronics, said the commission's decision was a fair one.
"We at Benbro feel that the decision handed down by the Australian Fair Pay Commission was indeed a fair decision," he said.
"In the current climate, those on the minimum wage are doing it tough. Of course at Benbro we believe that if we paid just that minimum wage we'd go out of business."
"We have always paid well above minimum rates and we reap a reward from our staff in loyalty, high productivity and low turnover. Our average years of service per employee is 11 years."
Mr Bennett said Benbro would include the rise in its above-award payments even if that made it harder to compete against manufacturers in China and India.
"This is a federal government decision but, of course, the states will once more reap the benefits by adding their insidious 6 per cent payroll tax on top of the statutory 9 per cent superannuation," he said.
"Manufacturers, particularly those who employ people with disabilities, should not be subject to payroll tax."
In Canberra, Vicki Berry said that the move would not affect her Easycare Landscapes business because she paid her staff well above minimum wage.
However, although Ms Berry said she would retain all of her 16 staff, she said she knew of other landscaping businesses that were letting people go and she expected this to increase as the price of fuel and materials soared and discretionary spending fell.
The Council of Small Business of Australia said the government was perpetuating the problem of inflation by awarding wage increases that were not linked to productivity increases.
"Flexible working conditions and efficiency gains in the workplace are the only way in Australia to ensure wage rises like this are not inflationary," said CSBA chief executive Tony Steven.
The National Farmers Federation, which sought an increase in line with the consumer price index, said it was "dismayed" by the decision.
It also questioned the wisdom of adding to the burden on small businesses without any accompanying productivity gains.
(This Article by Damien Lynch appeared in The Australian Financial Review on 15 July 2008.) |
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