Government figures underestimate cost of new workplace laws

The federal government’s costings for Australian businesses to operate under proposed workplace laws are severe, but even these figures are grossly underestimated.

Yesterday the government’s cost estimates for Australian business were revealed: small businesses: $14,638; medium businesses: $75,148; and large businesses: $94,311. These costings were based on a $175 per hour rate provided by a self-described “spiritual healer”.

A more realistic analysis using current market rates shows these figures to be significant underestimates.

Using the government’s own methodology, but with a far more accurate minimum market rate of $438 per hour*, employers can expect to pay between:

  • $19,574 – $23,684 for a small business.
  • $107,344 – $129,880 for a medium business.
  • $126,307 – $152,820 for a large business.

Alarmingly, the bill’s own Regulatory Impact Statement also shows that even small business owners will have to spend at least 4.6 hours every day for up to six months, away from their businesses, negotiating a multi-employer agreement.

“When businesses are already facing soaring inflation, rising interest rates, skyrocketing energy bills and a crippling workforce shortage, the last thing they need is tens of thousands of dollars in extra costs,” ACCI chief executive Andrew McKellar said.

“Even under its own methodology, the government has vastly underestimated the direct costs to business of being dragged into multi-enterprise negotiations, let alone the costs of being forced to work under unsuitable arrangements determined in union offices.

“There’s no doubt that businesses want higher wages for all Australians. When wage growth is strong, businesses and families benefit. Yet the government’s proposal to implement sweeping multi-employer bargaining changes will do nothing to help deliver bigger pay packets.

*Costings calculated using Doyle’s Guide pricing reports, adjusted for inflation using RBA inflation calculator.

/Public Release. View in full here.