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THE MCKELL INSTITUTE

The case for Victoria’s new public holidaysBackgroundThis report has been funded directly by The McKell Institute and has not been commissioned by any of our sponsors or supporters. The authors of this paper have utilised a range of publicly available information and our own analysis in compiling this paper.

About the McKell InstituteThe McKell Institute is an independent, not-for-profit, public policy institute dedicated to developing practical policy ideas and contributing to public debate. The McKell Institute takes its name from New South Wales’ wartime Premier and Governor–General of Australia, William McKell.

William McKell made a powerful contribution to both New South Wales and Australian society through significant social, economic and environmental reforms

For more information phone (02) 9113 0944 or visit www.mckellinstitute.org.au

The opinions in this report are those of the authors and do not necessarily represent the views of the McKell Institute’s members, affiliates, individual board members or research committee members.

Any remaining errors or omissions are the responsibility of the authors.

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THE MCKELL INSTITUTE

The case for Victoria’s new public holidaysAugust 2015

ContentsExecutive Summary 3

Introduction 4

Economic Benefits 6

Productivity 8

Social Benefits 13

The Proposed Holidays 17

Conclusion 20

Footnotes 21

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Executive SummaryThe Andrews state government plans to deliver on an election promise to introduce two new public holidays for Victorians: Easter Sunday and the Friday before the AFL Grand Final.

This paper makes the case for the introduction of both, putting to rest arguments in opposition of the new holidays.

Easter Sunday is a holiday that is already celebrated throughout the world and in other states in Australia. It is an anomaly of the system that it was never made a public holiday in the first place: it is believed that when penalty rates were first introduced, Sundays were treated the same as public holidays. That is no longer the case, and the Andrews government correctly aims to rectify the situation so that employees are paid fairly for their time on this special religious holiday.

The current designation of Easter Sunday as a normal Sunday for wage purposes means for example that the average retail worker will be earning $10 less per hour for working on that day than they would if it was deemed a public holiday.

The proposed AFL Grand Final holiday is no less required: in a state that has more than six months of the year without a public holiday, this day off in September will allow many Victorians to take a well-deserved break. It will give an added boost to the economy of up to $100 million, in both regional tourism and sporting tourism generated by the Grand Final weekend.

This paper demonstrates that the economic argument for introducing the new public holidays is much stronger than opponents would have us believe. The value of leisure time to Victorians is estimated to be $780 million for the two holidays; and the lost revenue and productivity is estimated to be much lower than originally thought. This is because most of the lost revenue that occurs from closing a business for a day is more likely to be delayed revenue; and the supposed drop in productivity is made up for in days either side of the holiday. In addition, those businesses that remain open on a public holiday do so because of the expectation of a higher turnover than normal weekdays, allowing for an offset in penalty rates.

Public holidays also provide an essential service to society, in that they force coordinated time off. Research into work-life balance shows that regular breaks reinvigorate workers, leading to better health and productivity outcomes, and lower rates of absenteeism.

Public holidays also contribute to social cohesion, allowing citizens to engage with one another in social events such as sporting events and festivals.

This paper finds that the two public holidays discussed present an excellent opportunity for the Andrews government to contribute positively towards Victoria’s economy and society.

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IntroductionIn their 2014 Platform, the Labor Party identified that public holidays ‘provide the opportunity for families and friends to take a break from normal work or studies and join together as a community with common ideals.’1

When implemented, the two new public holidays promised by the Premier will take Victoria’s state- wide public holidays to a total of thirteen, which is in line with the global average for number of public holidays per year.2

The current debate around the issue is contested; opponents of the proposal argue the costs to the state outweigh the benefits, although this report will show that this argument is based on superficial evidence.

For example, the Regulatory Impact Statement (RIS) produced by Price Waterhouse Coopers (PwC) has calculated the benefits of additional leisure time at $312 million to Victorians.3 However, when taking into account that public holidays are paid at an average rate of 250 per cent of a worker’s normal wage, new calculations conclude that the economic benefits of leisure time are in fact worth $780 million to Victorians in total.

The total value of public holidays cannot be quantified as easily as that however. Society benefits from public holidays by an overall increase to the productivity and health of individuals, increased social cohesion and the added boost to the tourism and hospitality industries that are brought about by coordinated time off.

Public holidays are more important to today’s modern society than they were a generation ago. Today Australians are spending more time working. While Monday to Friday is still seen as the normal working week, many people are also expected to work outside these ‘social’ hours. As such, the benefits of coordinated leisure time are more critical than ever.

There are significant improvements to productivity when a person has regular time off. Regular short holidays such as long weekends and public holidays assist in workers maintaining a healthy work-life balance that contributes to better overall health and higher levels of productivity. As Victoria does not have a state-wide public holiday between the Queen’s birthday weekend in June and Christmas Day in December, the proposed AFL long weekend provides a much-needed break in September.

Public holidays use significant events such as Easter Sunday and the AFL Grand Final to enhance social cohesion. Easter Sunday, in conjunction with the three other days off in the Easter Holiday season, is a significant religious event for Christians. For others it provides the only four-day weekend of coordinated leisure for the year.

While the AFL Grand Final holiday presents itself as an additional holiday for Victorians to enjoy, the Easter Sunday proposal redresses the issue of fair pay on an already-celebrated national holiday. Labor therefore aims to ensure that all hours worked on Easter Sunday are compensated fairly through Public Holiday rates.

In Victoria the AFL Grand Final takes over the city.

There is already a week of festivities leading up to the event including free events at Federation Square and the ‘Footy on Parade’ march that winds through city on the Friday before the game. More than one hundred thousand people attend this parade every year.

In addition, the AFL Grand Final coincides with the Royal Melbourne Show. Between 1885 and 1994, Melbourne celebrated this event with a public holiday on the last Thursday in September. In recent years there have been calls to reinstate this public holiday, allowing the tens of thousands of people who already take an annual leave day to attend, a public holiday to enjoy the event.

1 Victorian Labor Party, 2014 Victorian ALP Platform, 2014, p21. Accessed 30 July 2015: https://www. viclabor.com.au/wp-content/uploads/2014/05/ Victorian-Labor-Platform-2014.pdf.

2 Von Essen Group, ‘UK has lowest number of public holidays within G20,’ Onrec, 3 March 2014.3 Price Waterhouse Coopers, ‘Regulatory Impact Statement on proposed new public holidays in Victoria,’ Department of

Economic Development, Jobs, Transport and Resources, Victorian Government, July 2015.4

In addition, the implementation of the Grand Final weekend as a long weekend will give those Victorians who are non-football fans one more opportunity to take a short holiday throughout the year, giving an added boost to the tourism industries of many regional towns in Victoria. It will also allow many Victorians in regional towns to travel to the capital to experience the Footy on Parade march and to see their teams and players up close.

PwC estimates that the new long weekend in September will give a boost of $51 million to regional tourism industries in Victoria, and up to $49 million in sports tourism from the AFL Grand Final.

Although certainly some businesses will choose to close on the new public holidays, representing lost revenue for those days, this paper argues that many of the estimated losses are made up before and after the public holidays in the form of increased productivity by workers anticipating the holiday, and delayed spending by customers.

The costs of these two new holidays are very clearly outweighed by the overall benefits to society.

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Economic BenefitsThe true value of public holidaysThe PwC RIS has valued the benefits of additional leisure time at between $156 million and $312 million annually. However, these figures are based on the assumption that leisure time or public holidays are worth 50 percent to 100 percent of an individual’s normal wage. Yet penalty rates are currently worth 250 per cent of an individual’s wage, demonstrating that in order to make it worthwhile for an individual to give up their day off, when all of their family and friends are also enjoying a day off, the compensation must be much more than their normal wage.

Penalty rates represent compensation for the losses accrued to an individual who works during unsociable hours. The flipside to this, is that they can also articulate society’s definition of leisure represented in dollar value. While parts of the economy now operate outside of the traditional 9-5 paradigm, this does not translate into a 24/7 workforce. In Australia ‘social’ working hours are still defined as 9am-5pm, Monday to Friday. Hours that must be worked outside of social hours result in the penalty rates system.

The new award objective under the Fair Work Amendment Act 2013 articulates the value Australia places on working during normal hours. The amendment requires the Fair Work Commission to consider the need for extra remuneration for people employed during overtime, unsocial, irregular or unpredictable hours, as well as on weekends, public holidays or night shifts.4

The expected value of the two new Public Holidays should therefore be recalculated using the rate society has deemed as acceptable – double time and a half.

If the PwC RIS figures were to use this justification for equating the value of leisure time to the public, the figure would be equal to $780 million, rather than the original $312 million.

$780 million is the figure that more closely relates the value of time off for Victorians, as demonstrated through many years of the market solution of penalty rates.

The true cost of public holidaysFrom a superficial perspective, public holidays are argued to cost employers and the economy greatly in lost revenue, however it is widely acknowledged that this argument is flawed.

Australia is not the only nation to debate the economic impact of public holidays. When the UK celebrated an extra bank holiday to mark the Diamond Jubilee of Queen Elizabeth II’s reign in 2012, the British Department for Culture, Media and Sport reported that their figures for the impact of the extra holiday ranged anywhere between a net gain of £1.1 billion to a net loss of £3.6 billion.5

There are challenges in quantifying the impact of public holidays to the economy – both before and after the event. This is because while some parts of economy may face higher labour costs if they remain open, others benefit from additional capacity for spending on leisure activities – particularly those in the leisure, hospitality and retail sectors.

It is also important to discern between genuine losses and mere timing effects. For example, someone who might have originally planned to buy a car on the Friday before the AFL Grand Final may delay their purchase to the Saturday instead.

Similarly, many full-time salaried workers avoid a drop in their individual productivity by anticipating the extra time off and working longer hours (or being more productive during their normal hours) in the week(s) either side of the public holiday.

During the UK debate on the Jubilee holiday, the Confederation of British Industry stated that businesses recognised that it was “entirely appropriate” to have the extra holiday, and had been “factoring it into their planning for some time.”6

4 Fair Work Australia, Penalty Rates and Allowances. Accessed 31 July 2015: http://www.fairwork.gov.au/ pay/penalty-rates-and-allowances

5 Jon Kelly, ‘Do bank holidays cost the economy?’ BBC New Magazine, 5 June 20126 Jon Kelly, ‘Do bank holidays cost the economy?’ BBC New Magazine, 5 June 2012

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But some societal benefits are simply unquantifiable on a balance sheet. “Lifting the national mood, for instance,” cannot be quantified with an economic value, but few would argue against the benefit of doing so.7

Bringing tourism to the regionsLong weekends always offer the opportunities and benefits of tourism for regional towns. When Brisbane hosted the G20 Leaders’ Summit in November 2014, the city council established a one-off public holiday. As a result, the Gold and Sunshine Coasts experienced a boost of activity brought about by Brisbane residents taking the opportunity to get away for the long weekend before the Christmas rush. Many accommodation providers reported occupancy rates in the high 90 per cent range – a large boost from the same weekend in previous years.8

The PwC report estimated the Easter and AFL Grand Final long weekends would achieve economic benefits of approximately $51 million. Regional towns have the opportunity to capitalize on the festivities surrounding both the Easter holiday and especially the AFL Grand Final weekend.

Tourism Victoria has proposed a targeted campaign to encourage Melbournians to travel to the Victorian regions over the long weekends.

Melbourne is within a three-hour driving distance to multiple wine regions, mountains, lake districts, seaside towns, and national and state forests.

Many of these regions already take advantage of the close proximity to Melbourne by providing quality restaurants, cafes, accommodation and tourist activities, but many do not. The extra public holidays will allow many of the less-established regional towns to take advantage of this new opportunity, and to develop their own break-off events and festivals.

In addition to regional tourism, it is estimated that an added boost of up to $49 million will be achieved through the sporting tourism that the AFL Grand Final holiday will bring. The Grand Final eve holiday will allow many families living in regional towns to travel to Melbourne to experience the festivities associated with the sporting event, in particular, the ‘Footy on Parade’ march that takes place on the Friday before the Grand Final, and attracts over one hundred thousand people.9

7 Jon Kelly, ‘Do bank holidays cost the economy?’ BBC New Magazine, 5 June 20128 Patrick Williams, ‘Brisbane G20: Sunshine Coast and Gold Coast enjoy boost as leaders’ summit looms,’ ABC News, 10

November 2014.9 Price Waterhouse Coopers, ‘Regulatory Impact Statement on proposed new public holidays in Victoria,’ Department of

Economic Development, Jobs, Transport and Resources, Victorian Government, July 2015.7

ProductivityLeisure time – worth its weight in productivityThe OECD notes, “The amount and quality of leisure time is important for people’s well-being for the direct satisfaction it brings. Additionally, leisure, taken in certain ways, is important for physical and mental health. Leisure also contributes to the well-being of people other than the person directly enjoying leisure.”10

Previous research by the McKell Institute into a national portable long service scheme found that the benefits to society of workers taking regular time off from work are manifold. Additionally, there has been considerable research into the benefits of a healthy work-life balance for workers and employers, from a productivity perspective as well as a future cost perspective.11

Labour productivity is understood to be significantly improved by regular time off – from both annual leave, and more regular shorter holidays, such as long weekends and public holidays. Regular time off results in allowing workers to recharge and regroup, by having more time to spend in leisure with family and friends.12

Conversely, long hours of work without adequate leave have been associated with adverse health outcomes, such as stress-related illnesses, heart disease and stroke. Safe Work Australia found that the most expensive form of workers’ compensation are from mental stress claims, primarily due to the lengthy periods of work absence typical of these compensation claims.13 An easy solution for avoiding mental stress is to allow workers to take regular holidays that are spaced throughout the year.

Studies have shown that employees who take leave are more likely to exhibit higher levels of productivity and fewer symptoms of workplace stress than those who do not.14

Last year, a report conducted by Oxford Economics into paid time off in the US presented evidence that productivity rates amongst workers who took paid time off were more productive than those that did not. The survey conducted found that there was a significant rate of increase in productivity both before and after leave was taken, the former perhaps driven by a need to meet deadlines, and the latter suggesting that workers felt refreshed and with a better attitude from their return.15

10 OECD. (2009). Society at a glance 2009: OECD Social Indicators, p.2011 Ray Markey et al, 2013, The Case for a National Portable Long Service Leave Scheme in Australia, The McKell Institute.12 Ray Markey et al, 2013, The Case for a National Portable Long Service Leave Scheme in Australia, The McKell Institute.13 Ray Markey et al, 2013, The Case for a National Portable Long Service Leave Scheme in Australia, The McKell Institute14 Ray Markey et al, 2013, The Case for a National Portable Long Service Leave Scheme in Australia, The McKell Institute.15 Oxford Economics “An assessment of paid time off in the US” 2014 www.oxfordeconomics.com/my- oxford/projects/280061

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Figure 1: Impact of time off on productivity

Source: Oxford Economics “An assessment of paid time off in the US” 2014.

There is growing research into the value of a good work/life balance, and this is why many organisations are now investing large amounts of money into programs that encourage employees to manage their various commitments. “Work- life balance feeds passion for the workplace and contributes to a better overall work environment and morale. When there is separation of…personal and professional life, employees feel more appreciated. In turn, they are happier, more committed, more productive, and therefore will likely stay with the company for a longer period of time.”16

Charles Hobson and colleagues17 list the risk factors for workers who struggle to balance busy work schedules with other commitments as:

Higher rates of absenteeism and turnover

Reduced productivity

Decreased job satisfaction

Lower levels of organisational commitment and loyalty

Rising healthcare costs

Moreover, research into work-life balance has shown that the introduction of new public holidays is likely to lead to a small increase in health and a drop in absenteeism.18

Finally, OECD data indicates that Australia has a relatively high level of productivity yet is on the lower end of the scale of total average hours

worked per year. This data has been the focus of a New Zealand Productivity Commission report into declining productivity in that country, which compares Australia and New Zealand’s similar employment growth with the divergence of our productivity growth.19

16 Quote from Mike Steinerd in Jacquelyn Smith, ‘The best big companies for work-life balance,’ Forbes, 4 June 2013.17 Hobson et al, 2001, ‘Compelling evidence of the need for corporate work/life balance initiatives: results from a national

survey of stressful life-events,’ Journal of Employment Counseling, Vol. 38, No. 1, p 39.18 TUC, ‘Why the UK can afford a Community Day: The economic case for a new public holiday with a community and

volunteering theme,’ ESAD, August 2008. Accessed online 30 June 2015: www.tuc.org.uk/sites/default/files/extras/ bankholidaybusinesscase.pdf p 6.

19 New Zealand Productivity Commission, ‘Productivity by the numbers: The New Zealand experience: Commission Research Paper,’ September 2013.

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Figure 2: Growth in GDP and hours worked, Australia vs. New Zealand

Source: New Zealand Productivity Commission, ‘Productivity by the numbers: The New Zealand experience: Commission Research Paper,’ September 2013.

While it is important not to conflate correlation with causation in terms of total hours worked and its relation to overall productivity, the story is compelling all the same.

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Figure 3: Hours worked, total, hours/worker, 2013

Source: OECD 2015.

The OECD nations that exhibited the longest average hours worked annually were nations that are known for their low productivity figures. OECD data for 2014 indicate that Mexicans work the most hours per year in the OECD, yet are ranked the fifth lowest in productivity.20 Greece, too, is ranked second on average total annual hours worked for 2014, yet is ranked third lowest in productivity across the entire OECD.21

20 OECD data https://data.oecd.org/lprdty/gdp-per- hour-worked.htm21 OECD data https://data.oecd.org/lprdty/gdp-per- hour-worked.htm

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Figure 4: GDP per hours worked, total, 2005=100, 2014

Source: OECD 2015.

Australia, however, is ranked below the average in total number of hours worked per year per worker, but is ranked in the top ten countries for productivity scores. These figures suggest that an extra day off per year will not affect Australia’s productivity on an overall scale.

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Social Benefits“Public holidays are recognised throughout the world as days of commemoration and celebration.”22

In an economy that is increasingly operating on a 24/7 schedule, coordinated leisure time is valued and should not be underestimated. Public holidays are an essential part of a healthy society and play an important role in helping to build social cohesion.

The value of timeThe Australian Bureau of Statistics (Cat. 4160.0) defines leisure time as:

“…The residual time a person has after they have attended to the necessities of life (e.g. work, family care, self-care). This time can be described as ‘free time’ - meaning that during this time a person is free of obligation or duty, and free to choose the way in which the time is spent (i.e. what activities they undertake in that time)”

The Time Use Survey conducted by the Australian Bureau of Statistics (2006), measured how Australians use their time. The survey targeted all Australians over the age of 15 and tracked the patterns of their daily activities.

Figure 5: Time per week spent on daily activities: in hours and minutes

Source: ABS Time Use Survey 2006.*Disclaimer the data obtained by this survey is for all Australian’s over the age of 15, and the hours related specifically to employment are not representative of the hours worked by only employed people.

The Time Use Survey’s results show that leisure activities or free time activities such as personal care, unpaid housework and voluntary work and care are more commonly conducted on weekends, with Sunday being the most prevalent. The statistics also demonstrated that time allocated for employment activities was four times higher during the weekdays than the weekends. These results embody the argument that our society still commonly works off a five- day working week, and values weekends for unemployment related activities.

Overall, Australian society has seen a large decrease in leisure time, and an increase in time allocated to work. A report by Donatella Cavagnoli has shown that the average leisure time has dropped from 8 hours between 1965 and 1981, to nearly 4 hours between 1992 and 1997. However this statistic has dropped even further; in 2008 Australians only enjoyed approximately 1.57 hours a day, or 11 hours per week of leisure time, while devoting 10 hours per day, or 75.7 hours per week to work and family 22 NSW Parliament, Shop trading Amendment Bill 2010, Public Holidays Bill 2010. Accessed 30 July 2015:

http://www.parliament.nsw.gov.au/prod/parlment/nswbills.nsf/0/ccbff333537ae6ebca2577d6 00174a5c/$FILE/LC%20114%20&%2011510.pdf

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activities.23 As Australians experience less leisure time, the need for public holidays, leading to coordinated leisure time is more important than ever.

A 2011 report by AMP/NATSEM found that more parents are now working longer hours and are often at work when their children are at home. About thirty percent of men and eleven percent of women are already at work at 7 o’clock in the morning; and one in six men and one in seven women are still working at 7 o’clock at night. Research has found that the risks associated with parents who work long and unsocial hours include children who spend less time reading and on their homework and more time alone than those whose parents work more normal hours. A different AMP/NATSEM report found that children who are read to more frequently are more likely to have higher development scores.24

Additionally, the feeling of being rushed or lacking in time is an additional form of stress that can impact on relationships within the family unit and amongst friends and colleagues, contributing to a higher level of social dysfunction. The HILDA study in 2009 found that the proportion of women who ‘almost always’ or ‘often’ feel rushed or pressed for time is over 40 per cent of the population aged over 15 years, whereas the figure for men is just over 30 per cent. The main reason cited by respondents for feeling rushed or pressed for time is the stress of balancing work and family commitments.25

Figure 6: Proportion of people feeling rushed or pressed for time

Source: NATSEM calculations from HILDA 2009.

Having more time outside the working environment allows individuals to catch up on social and family time and allow for rest and recovery essential for a highly productive working environment.

23 Cavagnoli, D. (2008). Addiction to Work: An Inelastic Wage Elasticity of Labour Supply Equals Long Hours of Work. Australian Journal of Labour Economics, Volume 11, No.2, p.132

24 AMP.NATSEM, ‘Race against time: How Australians spend their time,’ AMP.NATSEM Income and Wealth Report, NATSEM at the University of Canberra, Issue 30, November 2011.

25 AMP.NATSEM, ‘Race against time: How Australians spend their time,’ AMP.NATSEM Income and Wealth Report, NATSEM at the University of Canberra, Issue 30, November 2011

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The increased need for work/life balanceIt is believed that Easter Sunday was not traditionally deemed a Public Holiday because Sundays were originally treated the same as public holidays in terms of shop trading hours and award entitlements.

OECD figures show that hours per week worked in Australia are decreasing, from 37.2 hours per week in 2004 to 36.3 hours per week in 2013.26 Yet a report by Charlesworth and Heron (2012) has highlighted that while there is a slight decrease in Australia’s working hours per week the ‘mix’ of hours has changed. The report shows a growth in non-standard working hours, both part-time and casual, with relatively fewer employees working full-time.27

Australian Bureau of Statistics figures show that around 40 per cent of Australian workers have some form of non-traditional pattern of working hours. Whether it is evenings or on the weekends, these unsocial hours are often worked in combination with Monday to Friday work.28

The Australian Work and Life Index (AWALI) is a national survey that was conducted by University of South Australia’s Centre for Life between 2007 and 2014 in a joint partnership between SafeWork SA and the Department of Employment.

The 2014 AWALI report Evenings, Night and Weekends: working unsocial hours and penalty rates examines the prevalence and distribution of working each of the three categories of unsocial work hours (evenings/nights, Saturdays, Sundays) by various demographics in Australia.

37.8% of all respondents declared that they had regularly worked ‘unsocial hours.’ The most common pattern for working non-standard hours was Saturdays, with 10 per cent of employees working on Saturdays only, followed by the next most common combination of working Saturdays, Sundays and evenings (8.3 per cent).

Figure 7: Scheduling of unsocial hours (Saturdays, Sundays, evenings, and combinations thereof), as a percentage of all employees

Source: Australian Work and Life Index Survey (2014).

The report also examines in detail patterns of penalty rate availability. Overall 72.2 per cent (1,669 employees) of the total sampled in the AWALI survey indicated that they worked unsocial hours at any time (rarely, sometimes, often or almost always). Figure 8 demonstrates that employees who work on Sunday rely on penalty rates the most, Sunday only (52.2 percent), Sunday and evenings (75 per cent).26 OECD. (2014). Hours worked: Average number of hours usually worked per week per person in employment, OECD

Employment and Labour Market Statistics.27 Charlesworth, S., & Heron, A. (2012). New Australian working time minimum standards: Reproducing the same old gendered

architecture? Journal of Industrial Relations, 54(2), 164-181.28 Australian Bureau of Statistics (2013). Working time arrangements, Australia, November 2012, 6342.0. Canberra: Australian

Bureau of Statistics.15

Figure 8: Employees’ unsocial work hours, receipt of and reliance on penalty rates, and continued unsocial hours work without payments

* Fewer than 20 respondents.

The results show that there is an increased prevalence of working unsocial hours, which makes the implementation of penalty rates even more important for Australians to maintain a sense of work/life balance.

Some commentators have used this argument to advocate for the abolition of penalty rates. However, those most affected by the abolition of penalty rates are more likely to be Australia’s lowest paid workers, who often sacrifice their leisure time by working unsocial hours in order to supplement their incomes. Previous research by the McKell Institute found that if penalty rates were cut, an average retail worker would lose between 4.6 per cent and 16.5 per cent of their income, depending on the size of the cut.29

Even though the traditional working week is no longer as prevalent as it once was, the need for leisure time is more essential than ever, and the introduction of two new public holidays can assist in addressing this.

29 The McKell Institute, The Economic Impact of Penalty Rate Cuts on Rural NSW: A retail industry case study, 2015.16

The Proposed HolidaysEaster SundayThe Public Holidays Act 1993 considers Easter Sunday as any typical Sunday, and not as a public holiday. This means that workers are required to work on Easter Sunday and are not entitled to receive Public Holiday penalty rates. This differentiation in pay is affecting approximately 1.3 million individual Victorians.30

Easter Sunday is a significant holiday to many Victorians for both religious and non-religious reasons.

For Christians, Easter Sunday is one of the two most important church services each year that is attended by thousands of church-goers statewide. There are 13.2 million Australians who describe themselves as of the Christian faith in Australia, with 8 per cent of the population regular churchgoers.31

Easter Sunday also serves an important purpose for non-religious Victorians, as it is the third day of a four- day weekend. The Easter long weekend is the busiest weekend for domestic air travel throughout the entire year, demonstrating the preference that Australians have to holiday during this period.32

As Easter Sunday is designated as a normal Sunday under current award rates, employees who must work during this national holiday period are not justly compensated for their loss of leisure time, receiving 50 per cent less pay than should be awarded, given Easter Sunday is a national holiday.

The fact that Easter Sunday is not currently a holiday may come as a surprise to many in the community who work in businesses that never operate on Sundays. The current public holiday law was passed in times before the liberalization of Sunday trading, when it was assumed business would not be conducted on a Sunday.33

Easter Sunday is already generally viewed as a public holiday. Many Victorians already operate under the assumption that Easter Sunday is a public holiday. When penalty rates were originally introduced there was no differentiation between public holidays and Sundays. Since then, however, public holiday penalty rates have increased at a faster rate than Sunday penalty rates.

Today, most industries pay workers fifty per cent more on public holidays than on Sundays. This means that the average retail worker who earns $18.99 per hour during normal hours loses nearly $10 per hour on Easter Sunday now as it is designated a normal Sunday.

Workers should be adequately compensated for working on a day that is already deemed by most as a national holiday of importance.

Easter Sunday is already a recognised public holiday in NSW, after legislation was introduced by the last Labor Government in 2010. The vote was unanimous amongst the Labor Party, Liberal Party, National Party and Christian Democrats, exhibiting the importance that Easter Sunday is given by many in Australian society.

As was said at the time: “It is clear that the absence of public holiday status for Easter Sunday…is a historical anomaly.”34

The proposed amendment is simply to rectify a situation that was never meant to occur in the first place, and give Easter Sunday the holiday that it so deserves.

30 Price Waterhouse Coopers, ‘Regulatory Impact Statement on proposed new public holidays in Victoria,’ Department of Economic Development, Jobs, Transport and Resources, Victorian Government, July 2015.

31 McCrindle Research, ‘Church attendance in Australia [Infographic],’ The McCrindle Blog, 28 March 2013.32 Australian Government, Easter in Australia, 3 January 2008. Accessed 30 July 2015: http://www.australia.gov.au/about-

australia/australian-story/easter-in-australia33 NSW Parliament, Shop trading Amendment Bill 2010, Public Holidays Bill 2010. Accessed 30 July 2015: http://www.

parliament.nsw.gov.au/prod/parlment/nswbills.nsf/0/ccbff333 537ae6ebca2577d600174a5c/$FILE/LC%20114%20&%20 11510.pdf

34 NSW Parliament, Shop trading Amendment Bill 2010, Public Holidays Bill 2010. Accessed 30 July 2015: http://www. parliament.nsw.gov.au/prod/parlment/nswbills.nsf/0/ccbff333 537ae6ebca2577d600174a5c/$FILE/LC%20114%20&%20 11510.pdf

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AFL Grand Final EveThe second public holiday that has been proposed is the Friday before the AFL Grand Final weekend. The AFL Grand Final is a major tourist attraction that generates approximately $36 million of economic activity for Victorian businesses.35

On the Friday before the Grand Final, the AFL puts on a ‘Footy on Parade’ that travels throughout Melbourne’s CBD at lunchtime. This parade attracts more than one hundred thousand football fans and many families already take the day off school and work to attend.36

Premier Daniel Andrews has also argued that families from regional areas will now be given the opportunity to attend the AFL pre-grand final parade, giving many more Victorians the opportunity to see the players up close.37

Sporting tourism is a growing industry with many tourists now travelling to see their favourite sporting teams or athletes compete in other parts of the country or the world. PwC has valued the economic potential of Victorian sporting-based tourism at between $7 million and $49 million annually to the Victorian economy. However, the overall value of sport to the economy is much greater, with Bob Stewart from Victoria University estimating that the AFL has an economic impact of $1.6 billion on the Victorian economy every year.38

Implementing a public holiday to celebrate the AFL Grand Final, which is seen as an integral part of Victorian culture, would demonstrate the value to society and the economy that this special occasion deserves.

Additionally, Victoria doesn’t celebrate a state- wide public holiday for over six months of the year: between the Queen’s birthday celebration on 8 June, and Christmas Day on 25 December. The Melbourne metropolitan area celebrates Melbourne Cup Day on the first Tuesday in November as a public holiday, and many other Victorian regions celebrate their respective racing carnivals, but there is a big gap for many Victorians in public holidays for the second half of the year.

35 Glen Croy, ‘AFL Grand Final and Planning for Legacy Tourism Impacts’, Monash University Business and Economics: News and Events, 1 October 2014. Accessed 31 July 2015: http:// news-events.buseco.monash.edu.au/2014/10/afl-grand-final-and-planning-for-legacy-tourism-impacts/

36 http://www.heraldsun.com.au/sport/afl/afl-fears-holiday- will-hit-crowd-for-grand-final-parade-in-city/story-fni5f22o-1227314696920

37 Herald Sun, AFL fears holiday will hit crowd for Grand Final parade in city, 22 April 2015. Accessed 31 July 2015: http://www.heraldsun.com.au/sport/afl/afl-fears- holiday-will-hit-crowd-for-grand-final-parade-in-city/story-fni5f22o-1227314696920

38 Glen Croy, ‘AFL Grand Final and Planning for Legacy Tourism Impacts, Monash University Business and Economics: News and Events, 1 October 2014. Accessed 31 July 2015: http://news-events.buseco.monash.edu.au/2014/10/afl-grand-final- and-planning-for-legacy-tourism-impacts/

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Figure 9: Public holidays per month

Source: Australian Work and Life Index Survey (2014)

Victoria once had a long tradition of celebrating a public holiday in late September. Between 1885 and 1994, Melbourne celebrated a public holiday called ‘Show Day.’ Show Day was celebrated on the fourth Thursday in September, and allowed the city to enjoy and take part in the festivities that the Royal Melbourne Show offered. Many other states including Queensland and South Australia also celebrate their royal agricultural shows with a public holiday. The Kennett government abolished Show Day as a public holiday shortly after coming to office, but in recent years there have been calls to reinstate the holiday.39

The proposed AFL Grand Final eve holiday will address those calls for reinstatement of the holiday, allowing families to enjoy a day at the show, or to attend the Footy on Parade march, or just by giving many workers a much-needed short break during the middle of that holiday-free period.

39 Darren Gray, ‘Call for Show holiday, a slippery day for some,’ Sydney Morning Herald, 26 September 2008.19

ConclusionThis report has argued for the introduction of two new public holidays in Victoria: Easter Sunday and the Friday before the AFL Grand Final. The total net value of these two additional holidays have a greater cost benefit to tourism, productivity and society, than the losses experienced through wage increases or the closure of some businesses.

The economic value of the two holidays can be estimated as:

$780 million worth of leisure time

$51 million brought to the regional tourism economy

$49 million through sporting tourism to Melbourne city

Arguments that public holidays cause greater losses of revenue to the economy can be put to rest, as there is no concrete evidence showing significant net losses over the course of a year. In fact, evidence shows that spending is often not lost, merely withheld for a few days, and productivity is also not affected on a longer term basis.

The value of productivity is just as relevant to a state as revenue, and it has been proven that regular short holidays such as public holidays and long weekends increase productivity. While some parts of the economy are moving to an always- open schedule, and more people are working longer or more irregular hours, periods of time away from employment are more crucial than ever.

The two proposed public holidays will provide Victorian workers with deserved time off, in order to recover their energies and be social, leading to a healthier, happier, and more productive workforce for all Victorian businesses.

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Footnotes1. Victorian Labor Party, 2014 Victorian ALP Platform, 2014, p21. Accessed 30 July 2015:

https://www. viclabor.com.au/wp-content/uploads/2014/05/ Victorian-Labor-Platform-2014.pdf.

2. Von Essen Group, ‘UK has lowest number of public holidays within G20,’ Onrec, 3 March 2014.

3. Price Waterhouse Coopers, ‘Regulatory Impact Statement on proposed new public holidays in Victoria,’ Department of Economic Development, Jobs, Transport and Resources, Victorian Government, July 2015.

4. Fair Work Australia, Penalty Rates and Allowances. Accessed 31 July 2015: http://www.fairwork.gov.au/ pay/penalty-rates-and-allowances

5. Jon Kelly, ‘Do bank holidays cost the economy?’ BBC New Magazine, 5 June 2012

6. Jon Kelly, ‘Do bank holidays cost the economy?’ BBC New Magazine, 5 June 2012

7. Jon Kelly, ‘Do bank holidays cost the economy?’ BBC New Magazine, 5 June 2012

8. Patrick Williams, ‘Brisbane G20: Sunshine Coast and Gold Coast enjoy boost as leaders’ summit looms,’ ABC News, 10 November 2014.

9. Price Waterhouse Coopers, ‘Regulatory Impact Statement on proposed new public holidays in Victoria,’ Department of Economic Development, Jobs, Transport and Resources, Victorian Government, July 2015.

10. OECD. (2009). Society at a glance 2009: OECD Social Indicators, p.20

11. Ray Markey et al, 2013, The Case for a National Portable Long Service Leave Scheme in Australia, The McKell Institute.

12. Ray Markey et al, 2013, The Case for a National Portable Long Service Leave Scheme in Australia, The McKell Institute.

13. Ray Markey et al, 2013, The Case for a National Portable Long Service Leave Scheme in Australia, The McKell Institute

14. Ray Markey et al, 2013, The Case for a National Portable Long Service Leave Scheme in Australia, The McKell Institute.

15. Oxford Economics “An assessment of paid time off in the US” 2014 www.oxfordeconomics.com/my- oxford/projects/280061

16. Quote from Mike Steinerd in Jacquelyn Smith, ‘The best big companies for work-life balance,’ Forbes, 4 June 2013.

17. Hobson et al, 2001, ‘Compelling evidence of the need for corporate work/life balance initiatives: results from a national survey of stressful life-events,’ Journal of Employment Counseling, Vol. 38, No. 1, p 39.

18. TUC, ‘Why the UK can afford a Community Day: The economic case for a new public holiday with a community and volunteering theme,’ ESAD, August 2008. Accessed online 30 June 2015: www.tuc.org.uk/sites/default/files/extras/ bankholidaybusinesscase.pdf p 6.

19. New Zealand Productivity Commission, ‘Productivity by the numbers: The New Zealand experience: Commission Research Paper,’ September 2013.

20. OECD data https://data.oecd.org/lprdty/gdp-per- hour-worked.htm

21. OECD data https://data.oecd.org/lprdty/gdp-per- hour-worked.htm

22. NSW Parliament, Shop trading Amendment Bill 2010, Public Holidays Bill 2010. Accessed 30 July 2015: http://www.parliament.nsw.gov.au/prod/

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parlment/nswbills.nsf/0/ccbff333537ae6ebca2577d6 00174a5c/$FILE/LC%20114%20&%2011510.pdf

23. Cavagnoli, D. (2008). Addiction to Work: An Inelastic Wage Elasticity of Labour Supply Equals Long Hours of Work. Australian Journal of Labour Economics, Volume 11, No.2, p.132

24. AMP.NATSEM, ‘Race against time: How Australians spend their time,’ AMP.NATSEM Income and Wealth Report, NATSEM at the University of Canberra, Issue 30, November 2011.

25. AMP.NATSEM, ‘Race against time: How Australians spend their time,’ AMP.NATSEM Income and Wealth Report, NATSEM at the University of Canberra, Issue 30, November 2011

26. OECD. (2014). Hours worked: Average number of hours usually worked per week per person in employment, OECD Employment and Labour Market Statistics.

27. Charlesworth, S., & Heron, A. (2012). New Australian working time minimum standards: Reproducing the same old gendered architecture? Journal of Industrial Relations, 54(2), 164-181.

28. Australian Bureau of Statistics (2013). Working time arrangements, Australia, November 2012, 6342.0. Canberra: Australian Bureau of Statistics.

29. The McKell Institute, The Economic Impact of Penalty Rate Cuts on Rural NSW: A retail industry case study, 2015.

30. Price Waterhouse Coopers, ‘Regulatory Impact Statement on proposed new public holidays in Victoria,’ Department of Economic Development, Jobs, Transport and Resources, Victorian Government, July 2015.

31. McCrindle Research, ‘Church attendance in Australia [Infographic],’ The McCrindle Blog, 28 March 2013.

32. Australian Government, Easter in Australia, 3 January 2008. Accessed 30 July 2015: http://www.australia.gov.au/about- australia/australian-story/easter-in-australia

33. NSW Parliament, Shop trading Amendment Bill 2010, Public Holidays Bill 2010. Accessed 30 July 2015: http://www. parliament.nsw.gov.au/prod/parlment/nswbills.nsf/0/ccbff333 537ae6ebca2577d600174a5c/$FILE/LC%20114%20&%20 11510.pdf

34. NSW Parliament, Shop trading Amendment Bill 2010, Public Holidays Bill 2010. Accessed 30 July 2015: http://www. parliament.nsw.gov.au/prod/parlment/nswbills.nsf/0/ccbff333 537ae6ebca2577d600174a5c/$FILE/LC%20114%20&%20 11510.pdf

35. Glen Croy, ‘AFL Grand Final and Planning for Legacy Tourism Impacts’, Monash University Business and Economics: News and Events, 1 October 2014. Accessed 31 July 2015: http:// news-events.buseco.monash.edu.au/2014/10/afl-grand-final- and-planning-for-legacy-tourism-impacts/

36. http://www.heraldsun.com.au/sport/afl/afl-fears-holiday- will-hit-crowd-for-grand-final-parade-in-city/story- fni5f22o-1227314696920

37. Herald Sun, AFL fears holiday will hit crowd for Grand Final parade in city, 22 April 2015. Accessed 31 July 2015: http://www.heraldsun.com.au/sport/afl/afl-fears- holiday-will-hit-crowd-for-grand-final-parade-in-city/story- fni5f22o-1227314696920

38. Glen Croy, ‘AFL Grand Final and Planning for Legacy Tourism Impacts, Monash University Business and Economics: News and Events, 1 October 2014. Accessed 31 July 2015: http:// news-events.buseco.monash.edu.au/2014/10/afl-grand-final- and-planning-for-legacy-tourism-impacts/

39. Darren Gray, ‘Call for Show holiday, a slippery day for some,’ Sydney Morning Herald, 26 September 2008.

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