Federal Labor and unions are gearing up to fight the next election on the hot issue of penalty rates.

Opposition Leader Bill Shorten has used the Labour Day public holiday in many states to warn he is up to taking on the Turnbull government over workplace issues.

The Productivity Commission recommended in its draft report on the workplace relations framework, that the Sunday penalty rates of hospitality and retail workers be reduced to match Saturday’s.

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Those industries are on average, along with agriculture, the lowest paid industries in Australia, Mr Shorten told reporters in Sydney.

“If you were to take away penalty rates from these groups, you would even depress their wages further,” he said.

He criticised the argument that changing the rates would help encourage small businesses to stay open.

“There is no good for a small business if the people coming into your shop can’t afford to buy what is in the shop,” he said.

The Coalition has said it is willing to have a debate on the issue.

But Prime Minister Malcolm Turnbull noted the setting of the rates is the job of the Fair Work Commission and is being looked at by the Productivity Commission.

The commission is due to hand down its final report to government next month.

“If Mr Shorten has alternative approaches to ensuring our prosperity in the years ahead, then he should put them forward, and we would be delighted to discuss them and debate them with him,” Mr Turnbull told reporters in regional Victoria.

ACTU President Ged Kearney tried to dispel the myth that Australia has a 24/7 society.

“A lot of people still very much value the time they have with their families on the weekend,” she told Sky News.

Referencing the AFL and NRL grand finals, Ms Kearney said the leagues know that if they played the game on a Tuesday not many people would be able to go.

“Most people work Monday to Friday still.”

Ms Kearney said she found it “offensive” to talk about retail and hospitality workers separately from other industries.