Penalty rates battle looms in parliament

CHANGES to penalty rates could soon be on the Turnbull Government's agenda, after Treasurer Scott Morrison backed proposals on Wednesday to give people tax credits for missing out on extra pay.

Interviewed on ABC Radio, Mr Morrison described the Productivity Commission's tax credit proposal as innovative.

His comments came after Prime Minister Malcolm Turnbull said lower penalty rates were inevitable in the future as Australia moved to a seven-day economy.

In a draft report the Productivity Commission has urged changes to penalty rates to help support small business, but a final report is not due until next month.

Small business groups have told the commission cutting penalty rates would help them open on Sundays and employ more people.

Unions are largely opposed to penalty rate changes, arguing the weekend is still a key issue for Australian workers.

Mr Morrison said the government wanted more people employed and more flexibility to help disabled and long-term unemployed people get a job.

"I don't see why you wouldn't want to consider anything that could achieve these goals," he told the ABC.

Opposition Leader Bill Shorten said the government was implying people who received penalty rates were "holding Australia back and causing unemployment".

"When they talk about wages, it's code for cutting penalty rates," he said. "There's no plan from the Liberal Party to lift the wages of Australian workers. All they're saying is they want to cut Sunday penalty rates."

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