Why no modelling on penalty rate cut?

Federal Labor can't understand why the government hasn't asked Treasury to model the impact a cut in Sunday penalty rates will have on the economy.

The issue came to a head during a heated exchange between opposition frontbencher during Katy Gallagher and Finance Minister Mathias Cormann during a Senate hearing in Canberra on Wednesday.

"Is it just hands off, whatever, whatever impact on the budget , don't care, it is what it is?" Senator Gallagher asked the minister.

"Is that the way you run a government?"

But Senator Cormann said Treasury was not going to redo an analysis the Fair Work Commission undertook in arriving at its decision to align the Sunday penalty rate with Saturday for 700,000 workers in the hospitality, retail, fast food and pharmacy sectors.

"You can't model the impact until such a time the adjustment has been in place," he said.

Treasury secretary John Fraser said the penalty decision would be taken into account when his department finalises its economic parameters for the May budget.

The government is under pressure from Labor to overturn the commission's decision.

Assistant vocational education and skills minister Karen Andrews threw down the gauntlet to Australian businesses, challenging them to use the reduction to create more jobs.

Treasurer Scott Morrison said young employed Australians would not get jobs if businesses were closed.

"You can't get a job, you can't get hours in a business that is not open," he told ABC radio.