Grand Final public holiday comes at enormous cost
Melbourne, 22 September – Victoria will face further unsound economic policy from the Andrews Government this year, through its contentious AFL Grand Final public holiday on 30 September, says the Victorian Automobile Chamber of Commerce (VACC).
According to the Regulatory Impact Statement (RIS) on proposed new public holidays in Victoria, prepared for the Victorian Government last year by PricewaterhouseCoopers Australia (PwC), the State Government was to monitor and review the impacts on small business and the Victorian community. This did not happen.
“A key reason for the lack of any economic impact report is that the policy measure is so financially unsound that it defies all economic and evidence-based logic,” VACC Executive Director, Geoff Gwilym, said.
The RIS outlined an estimated economic cost in 2015 of up to $852 million for the Victorian economy, as a direct result of the introduction of a Friday AFL Grand Final public holiday. The report also claimed that the overall net impacts on the Victorian economy were uncertain, as there was insufficient information to quantify all of the added flow-on effects, such as increased hospitalisation costs and the longer term impacts on employment, wages and business activity in Victoria. Despite these extraordinary findings, the State Government essentially ignored the PwC report.
The PwC report also outlined that the net impacts of reduced economic activity for Victoria were expected to grow over time in line with growth in gross state product (GSP). Taking into account Victorian GSP growth of 2.5 per cent since the PwC report, this effectively places the net economic cost of the AFL public holiday this year at around $1 billion or more. So it is no wonder the Andrews Government won’t release any economic impact statement.
“There also lies a real impact on regional Victoria, such as on agricultural producers that are especially reliant on skilled labour to repair farm machinery and equipment,” Mr Gwilym said.
“With penalty rates forcing many farm machinery sales and service dealers to close due to the public holiday, some farmers and regional communities could effectively be left idle with broken machinery, unable to access repair technicians on the day.”
Small business will bear most of the burden, as wage costs form a greater proportion of overall business operating costs than for large businesses. Thus penalty rates amplify the costs of opening the doors by a greater amount than for larger firms. This makes it harder for small businesses to absorb these costs with the likelihood that many will choose to close on the day.
“The evidence demonstrates that the case for the Grand Final eve public holiday does not stack up, economically, and it is about time that the Victorian Government acknowledged this or produced evidence to the contrary,” Mr Gwilym said.
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