Sunday, June 12, 2011

COSBOA Warns Minimum Wage Increase Will Hurt Small Business

Minimum Wage Hike and its effect on Small Businesses
COSBOA, or the Council of Small Business of Australia, has given a warning that the upcoming minimum wage increase will definitely hurt small businesses.

Fair Work Australia has lifted the minimum wage from $569.90 to $589.30 per week last Friday (3rd June). The increase of $19.40 per week has come midway between the union’s call for a $28-rise per week and the business bodies’ call of a $10 increase. COSBOA is among the business bodies.

According to COSBOA executive director Peter Strong, the ruling is a pay decrease for small businesses even if employees are a getting a pay increase.

“People need more money and we understand that, but small businesses don't get a lot of money,” said Strong. “At the moment, small business is a lot of hard work. We're just here to make a living and it impacts on small business owners' family income,” he added.

COSBOA (Council of Small Business of Australia)
It was also said that the government cannot give any more money to small businesses. However, it can help them by giving them more tax breaks. The government can also help by removing red tape. GST and superannuation payments should also be looked at.

Around 1.4 million workers will be affected by the Fair Work ruling that will take effect on July. This ruling amounts to 3.4% rise above inflation.

After the Australian Chamber of Commerce and Industry (ACCI) initially lobbied for a $9.50 weekly increase, it said that the ruling is excessive.

The wage increase will add another $3 billion to the wages bill of small businesses of Australia, according to ACCI Chief Executive, Heather Ridout.

“While not wanting to overstate the risks, it has to be said that in the current circumstances faced by non-mining, trade-exposed sectors such as manufacturing and tourism, the decision is sure to further erode margins and will weigh against decisions over retentions and new hiring,” she added.

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