Productivity reforms will hurt Qld: unions

Slashing Sunday penalty rates for hospitality and entertainment workers would hurt the Queensland economy more than other states because it relies more heavily on those industries, unions say.

In its draft report into Australia's workplace relations framework, the Productivity Commission has suggested keeping penalty rates for essential services, but cutting Sunday rates for the hospitality, entertainment, retail, restaurant and cafe sectors to the same level as Saturday rates.

Such a change would impact more than half a million workers in Queensland, the Queensland Council of Unions says.

"If the government doesn't reject this proposition, the payment of fair wages to working families will be a big election issue," president John Battams said.

Workers earning the minimum wage, or close to the minimum wage, would suffer a pay cut of between $40 and $80 for each Sunday they worked under the proposed reforms, the QCU said.

"It would drag more money out of the Queensland economy than in other states," Mr Battams said.

"There's no evidence to suggest that penalty rates are the cause of lack of profitability, businesses closing, or the demise of these industries."

Mr Battams also dismissed the notion that cutting wages would solve the country's economic problems as "voodoo economics".

The commission has also recommended tweaking unfair dismissal laws, changes to the way members of the Fair Work Commission are appointed, and the scrapping of the need to review awards every four years.