BHP (ASX:BHP) Group Ltd, Australia's largest company, has raised concerns about an expected annual earnings hit of more than A$1.3 billion due to the Albanese Government's proposed "same job same pay" legislation.
Equal pay means fewer jobs
CFO David Lamont suggested the policy, aimed at closing wage loopholes, could put a dent in dividends by an estimated 30 cents per share, and might be equivalent to cutting 5,000 jobs.
The warning comes as the bill seeks to standardise pay for workers employed under different workplace agreements.
Companies like Downer and Qantas are also expected to be affected.
Workplace Minister Tony Burke countered that the legislation aimed to eliminate the loopholes that had allowed unequal pay for similar roles.
Impact on dividends
Lamont said the megacap’s initial A$1.3 billion estimate was likely conservative, given the bill's broader implications and that the impact on dividends would be substantial, considering BHP’s robust returns in the past five years due to high commodity prices.
Stakeholders have also expressed concerns over the bill’s financial implications for BHP.
Don Hamson, managing director of Plato Investment Management, warned that higher costs could lead to lower profits and valuations for BHP shares.