Victorian businesses are paying a heavy penalty for Footy Friday according to a new survey of businesses conducted by the Australian Industry Group (Ai Group).
The survey confirms the findings of research after last year’s holiday, that significant numbers of large and small, metropolitan and regional businesses were severely impacted.
The Victorian Head of Ai Group, Tim Piper, said last year 85% of companies closed for the day with 71% incurring additional labour costs; the average loss in revenue per business was $57,500 and ranged from $1,000 to well over $500,000.
This year 61% of surveyed businesses told us they are planning to close for the day and on average they anticipate losing around $16,000 in income for the day. This result reinforces the point made last year by Ai Group of significant costs to businesses, including an estimated cost to the Victorian economy of at least $1 billion worth of lost or deferred sales per year.
“Some companies have decided they simply have no choice but to open, often because of national responsibilities or the need to keep faith with customers. They will need to pay huge penalty rates to service the rest of the country as the consequences of closing are simply too great. But for them it’s become a shemozzle,” Mr Piper said.
As well as the wages businesses are already paying, three quarters of respondents (75%) expected to incur additional labour costs as a result of the public holiday; the average extra cost is expected to be approximately $9,000. Just over half (51%) expected their revenue to be down by an average of around $16,000.
One large Victorian regional business has told Ai Group that the costs resulting from the day are well over $200,000 and will mean a loss for the company for the entire month of September.
Mr Piper said the public holiday was an unnecessary obstacle for Victorian businesses in an already trying environment and the costs to Victorians far outweigh any perceived benefits.
BUSINESS RESPONSES TO THE FOOTBALL FRIDAY PUBLIC HOLIDAY
Some businesses stated that they are unable to meet the increased labour costs of production for the day without any increase in revenue, so will have to close:
We will need to close as we can’t cover the overtime, although essential support will still need to be paid. Unfortunately shutting down will impact on our productivity, we have orders to fulfill and a lost day severely impacts on our productivity.
A nothing holiday where we pay employees not to come to work.
I believe this public holiday is an absolute joke. I cannot afford to open my doors due to high wage expenses.
The Football Friday public holiday affects business nationally:
We are a national and global supplier. Our customers expect us to be open and our international customers do not understand the public holiday.
This additional holiday is not good for manufacturing in Australia. We are a 100% export business and we have to meet customer demand and working calendar. The effect on our business is an overtime penalty of around $35,000 or loss of sales around $230,000.
Some businesses have to absorb the additional labour costs, without any increase in revenue:
It is a joke! The business competes in a national market with the cost/price squeeze severely on manufacturing… the burden of additional penalty costs for staff working on the public holiday will worsen our financial performance. Government needs to get serious about supporting business.
Ridiculous and most wasteful; we won’t take anymore but will incur considerable extra cost. If we don’t open we stand to lose approximately $30k. Friday is the most important day of the week in the country.
The impact of the public holiday extends for more than just one day:
Absolutely stupid – creates a ripple before & after. The real impact last year was 1 week.
The problem with one public holiday before the weekend is most people start getting ready to leave on Thursday and then some add an RDO on Monday so effectively you lose 4 days of trading not just the one public holiday.
The Victorian Government has made a bad decision which is detrimental to a lot of businesses including ours.
Unnecessary. Our guys have the rostered day off on Monday so already have a long weekend for the footy final. I doubt any of them will go to any footy extravaganza on the Friday. It’s an extra cost to business (pay for no work) and if we are busy then we may have to pay overtime to make up for the lost day in production.
…Many of our employees leave the area for the weekend, so we effectively lose one and a half days of revenue and have to pay employees for the Friday. Our customers are impacted as many of them operate 7 days per week (transport) and delays in vehicle repairs are costly. We order spare parts from all over the country, so this holiday, backed up with public holidays interstate mean that we are unable to receive goods from Thursday until Tuesday. This is a huge impact for a single day off.
Regional businesses feel marginalised by the holiday:
I don’t believe it benefits rural Victoria at all, it’s just an added expense that many businesses can’t afford. It may be worthwhile in the Melbourne metro area but it doesn’t seem to bring extra custom to their either!
We are running additional overtime to make up for the lost production day. We are regionally located so this holiday does nothing positive for our region – nobody comes to our city as most services and retailers shut (due to additional cost) so there are not many tourist dollars coming our way. None of our employees plan to attend the Grand Final Parade.
Absolute waste especially in country areas. We basically lose one whole days’ production.
This holiday is forced on struggling small regional businesses … Regional people do not travel to Melbourne to watch a parade, it’s just another day off.
This holiday is a complete nonsense. And being based outside of the metropolitan area there is no benefit to our staff except a day off for no reason – just another cost that our business has to bear – paying staff to have another day off. As all our suppliers and nearly 50% of our customers are not based in Victoria this is another day where our business cannot be contacted and customers may go elsewhere for their needs. Even our Victorian customers do not take the day off (farmers don’t take many days off!)
Being a small country town this public holiday means we cannot afford to employ our regular staff on this day. Our business cannot afford the penalty rates so our casual staff are given a day off which means they get no pay at all. Hope the politicians enjoy their day off because all us small business owners nowhere near the city have to work to survive.