Two new public holidays on AFL Grand Final Eve and Easter Sunday have been proposed by the Government and it recently announced that a Regulatory Impact Statement on the proposed new holidays is now available for public comment until 5 August 2015.
Victoria Tourism Industry Council (VTIC) believes that the net cost for the two new public holidays, estimated at around $405 million far outweighs the benefits to the State which are difficult to quantify.
1. Impact on Tourism & Hospitality Businesses
We believe a large number of businesses will choose not to operate on these public holidays due to increased wages costs and anticipated financial loss.
Earlier, VECCI projected that the additional wages for the retail, accommodation, food services and recreation industries are estimated to cost small business owners $105 million as wages can be 50 per cent higher on Easter Sunday and 150 per cent higher on Grand Final eve.
This also results in an overall loss of productivity or output for the business owner and leads to overall reduced gross state product (GSP) for Victoria.
2. Economic Output, Job Retention and Creation
The Regulatory Impact Statement identifies that the loss of economic output from the AFL Grand Final public holiday is significantly higher at between $680 and $852 million compared to the Easter Sunday holiday at between $37 and $46 million annually. This is because a greater number of businesses would normally operate on a Friday compared with a Sunday, therefore the AFL Grand Final holiday particularly will result in greater economic losses.
Specifically the small business sector, which is already under pressure from labour costs and penalty rates, will feel the impact, with the costs of opening their doors amplified. A large number of small businesses not opening could lead to greater economic losses for Victoria overall which could result in job losses and a reduction in casual work.
For workers employed on casual arrangements who should have worked these shifts, the impact is reduced hours and wages.
Ultimately these public holidays will take money away from the businesses that should be supported to increase employment and create jobs.
3. Tourism to Regional Victoria
The Regulatory Impact Statement suggests that the public holidays could provide opportunities to increase tourism to the regions, however VTIC questions whether Melbournians will travel outside the metropolitan area in the lead-up to the city’s AFL Grand Final and the excitement that surrounds this event.
Even if there is some level of regional travel, the chances of businesses being closed due to the increased wages and penalty rates that would need to be paid, would mean that opportunities to eat out or visit attractions would be minimal.
This may then result in a diminished experience for the visitor if hospitality establishments are closed and if one business decides to close, others are likely to follow suit.
If businesses do decide to open then they may decide to pass on a portion of the increased labour costs to customers through surcharges, which could also have a negative impact on the visitor experience.
4. Swift Action to Retract
VTIC supports the stance of VECCI, calling for the Government to retract this decision in relation to at least the Grand Final Eve holiday before it has a dire economic impact on the State and stymies business confidence and performance across not only the tourism but broader business sector.