From the CEO - Do we need more Public Holidays in Victoria?

In order to pass this legislation, the Subordinate Legislation Act 1994 requires the completion of a Regulatory Impact Statement (RIS). The RIS process, including a mandatory public consultation period, will provide insightful and meaningful analysis (both quantitative and qualitative) of the benefits and costs of the public holiday on businesses and the broader community. This RIS process is expected to be completed by early August.

It is an interesting debate. PricewaterhouseCoopers, in its capacity as advisor to the Victorian Department of Economic Development, Jobs, Transport and Resources, has just released the RIS which attempts to assess the impacts on the community and economy by the introduction of two additional public holidays – being Easter Sunday and the Friday before the AFL Grand Final.

For the record, let me highlight the current number of public holidays each state and territory has just to put this debate into some perspective. In 2016, Tasmania has 10 public holidays scheduled, Victoria, South Australia, Northern Territory and Queensland have 11, whilst ACT, New South Wales and Western Australia have 12. Currently NSW is the only state next year that lists Easter Sunday as a Public Holiday.

The RIS goes some way to consider the impacts of the proposed changes but estimating the benefits and costs of the proposed holidays is difficult given the diverse effects it has on individuals and businesses. For example, how do you measure the benefit associated with increased wages for those employees working on public holidays against the additional labor costs for employers. This amount, estimated at somewhere between $252m and $286m, effectively represents a transfer of money from employers to employees with little effect on the economy as such.

Another benefit that is highlighted in the report is the additional leisure time people that don’t have to work will have to spend with family and friends. I’m not sure of how it has been calculated but the benefit of this leisure time has been estimated at between $156m and $312m. We can also look positively at the figure of between $17m and $51m that Tourism Victoria estimates will be expended into the economy through increased tourism, particularly in regional centres.

Of course, all of this pales into insignificance when you compare it to the reduced economic activity of those companies that choose not to operate on a public holiday. This is the point of my editorial as this relates to most of the manufacturing sector that will effectively be made to close their doors for another day or two. This is particularly relevant to the proposed public holiday on the Friday before the Grand Final as the lost production and output cannot be made up given there are fewer working days in the year. A number of AMTIL Members have highlighted this to me over the past month and are concerned about the impact it will have on their businesses. The RIS estimates the reduced economic output will cost the state between $717m and $898m but they have split the cost estimates across the two proposed holidays and the loss on Easter Sunday only represents between $37m and $46m of this figure.

It is worth noting that the Government’s proposed policy aligns to principles contained in the 2014 state election platform and specify providing fair pay to those working on Easter Sunday; increasing opportunities for Victorians to enjoy coordinated leisure time; and acknowledging the important role performed by public holidays on religious and state occasions in uniting the community.

My view, for what it’s worth, is that there could be a case presented to suggest Victoria could come in line with New South Wales by making Easter Sunday a public holiday and bringing the total number to 12, the same as most other states and territories. This meets the principles set out in the election platform and, as explained above, effectively represents a transfer of money from employers to employees where the employers, to some degree, have the opportunity to recoup these additional costs through increased sales.

The suggestion of the Friday before the AFL Grand Final being a public holiday doesn’t make a lot of sense. It would put Victoria in a position of being the state with the most number of public holidays and that in itself is a good reason to knock it on the head. The killer blow is the loss of economic activity proposed to be somewhere between $680m and $852m, just so we can spend a day in the city watching the AFL parade! One must ask the question – Is Victoria not already vibrant, active and alive during Grand Final week? If the answer really is “no” then there has got to be a more productive way of uniting the community during this week.

Anyway, as I said it is an interesting debate and one that I am sure will be followed with interest in the lead-up to a decision being made final.

For more information, or to view the Regulatory Impact Statement visit http://economicdevelopment.vic.gov.au/corporate-governance/legislation-and-regulation/regulatory-impact-statements