Gerry Harvey has not spoken about the unfolding saga at franchisee Harvey Norman commercial in NSW, but he has got on his soapbox to warn that his franchisees are facing a tough time and could start laying off staff, following the Fair Work Commission’s decision to hand 5.75 percent pay rise to employees.
In addition to the broad 5.75 per cent rise for award-wage earners, the commission on Friday also declared an 8.6 per cent increase for 80,000 non-award workers. Those lowest paid workers will get an extra $70 a week, with their hourly wage rising to $23.23 from $21.38.
Gerry Harvey, like several other retailers that ChannelNews has spoken out claiming that the decision will lead to cuts and possible job losses following the handing down of the largest rise in the award wages since 2009.
ChannelNews understands that Harvey Norman along with several other major retailers are set to fund a massive assault on the Anthony Albanese led Labor government following the decision.
Gerry Harvey at the 2020 Magic Millions barrier draw at Surfers Paradise Foreshore on the Gold Coast, Tuesday, January 7, 2020. (AAP Image/Glenn Hunt) NO ARCHIVING
Among the hardest hit will be, Harvey Norman franchisees who are already struggling due to inflation pressures and “the lack of customers through the door “according to several that ChannelNews has spoken to.
The Harvey Norman chairman and executive director claims the problems are not isolated to Harvey Norman franchisees and that they will present challenges for all businesses and make the Reserve Bank’s attempts to tame inflation more difficult he warns that some businesses could collapse as a result of the rises.
“We’ve got inflation and we’ve got a big wage increase, and it’s a difficult situation,” he said.
“It’ll affect all businesses, and the first thing [business owners] will do is look at their staff and think about how to get rid of people. That’s what every business does when wages go up”.
“Certainly, a franchisee at a Harvey Norman would be no different to anyone else in business – they would be looking at their wage bill, and how do you counter that? You either cut wages or increase prices.”
Retailers have declared war on Anthony Albanese’s industrial relations reforms, launching a multimillion-dollar campaign attacking union-backed same job, same pay laws as a direct hit on workers in retail stores who now face the real possibility of losing their jobs.
The industry-wide blitz is set to be spearheaded by a national marketing campaign using the slogan “A Better Way, for Better Pay” it will warn Australians that if you believe in being rewarded for your experience and working harder – “same job, same pay will take that away.”
In a joint statement opposing Labor’s “destructive IR changes,” business groups said the reforms would “lead to lower wage growth and fewer jobs – compounding the plight of workers and families who are already doing it tough.”
The Australian newspaper claims that Business leaders are threatening to indefinitely bankroll TV, radio, and print ads to heap pressure on the Albanese government ahead of Workplace Relations Minister Tony Burke rolling out union-endorsed IR laws in coming months.
JPMorgan has already warned the wage rises would hit retailers hard and could contribute to the need for more rate rises according to the Australian Financial Review.
“The implications for retailers are significant, given the large proportion of costs linked directly to minimum wage increases at a time of slowing [or] negative sales growth,” the broker said.
“The risk of a wage-price spiral for inflation triggering incremental RBA rate rises exists as minimum wage increases above 5 per cent in our view.”
Gerry Harvey claims that the current $4.2 billion Harvey Norman wage bill was at its highest as a percentage of sales in the company’s history.
Although the lift in award rates would push the company’s wage bills higher, it was also possible it could bolster sales, he said.
“Paying more wages means some businesses will have to figure out if they can keep going. But it also means people are going to have more money, which means they have more money to spend,” he said.
“And people are still spending.”
