The decision by the Australian Fair Pay Commission late last year to increase rates for retail employees by $27.36 will hurt the retail industry, says Australian Retailers Association (ARA) chief executive officer David Edwards.

This means a significant increase of A$1750 per year for shop assistants that regularly work key retail trading hours including Saturdays and Sundays. The figure is even higher once the flow on the superannuation and payroll tax is taken into consideration.

Edwards says the decision is sure to hurt sectors of the industry that have been struggling in recent times, particularly those reliant on discretionary spending such as clothing and soft goods, and those in decline such as recreational goods.

According to Edwards the rate increase will be unsustainable by many in the sector and many retailers are still reeling by significant increases under Workchoices to personal leave minimum entitlements. He says retailers are furious that they may be subject to a further increase within seven months with the Australian Fair Pay Commission announcing that their next wage decision will be handed down in mid-2007.

However, the ARA urges the Australian Fair Pay Commission to now conduct research in the retail sector as to the real impact of their decision in the retail industry and not to further increase rates in mid-2007.