Malcolm Turnbull admits 600,000 low-paid workers will get less for working on a Sunday, but the upshot is more jobs, hours of work and a boost to the economy.
Labor and unions have pledged to fight a Fair Work Commission decision to cut penalty rates for retail, hospitality and pharmacy workers.
Asked what he would say to low-paid workers who carry the burden, the prime minister pointed to the independence of the FWC which was led by a former ACTU official.
"Yes, it will hurt and we would understand that, we can understand the disappointment of many workers in retail and hospitality, but this is the judgement of the independent tribunal," Mr Turnbull told 3AW radio on Friday.
The prime minister said the FWC had found a modest cut in penalty rates would "see more employment, more jobs, more growth and more employment opportunities".'
Mr Turnbull said Labor leader Bill Shorten should also respect the decision, as he said he would last year.
Mr Shorten said on 3AW on April 21, 2016, he would accept the independent decision even if it meant cuts to Sunday penalty rates.
"That makes a big difference between us and the Liberals," Mr Shorten said at the time.
Reserve Bank governor Philip Lowe told a parliamentary committee on Friday subdued spending among those taking a pay cut was one of two outcomes, with the alternative being more jobs and more spending.
"If wage restraint leads to more people having jobs, which I think is what's happened in Australia, more people have money in their pocket than would have been the case otherwise," he told the committee.
"So the aggregate level of spending might actually be higher."
Dr Lowe said weak wage growth in recent years had allowed more Australians to have jobs in the aftermath of the mining investment boom.
"When more people have jobs, they feel like they have more security and slightly more willingness to spend," he said.
Labor frontbencher Mark Dreyfus said the rules around the FWC - established by the Rudd government in 2009 - need to be reviewed.
"It was not our intention ever that this could produce an outcome where workers' wages, particularly lowest paid workers, would have their wages cut," Mr Dreyfus told ABC radio.
Mr Dreyfus said, if necessary, the opposition will change the system either through legislation or another parliamentary solution.
Mr Shorten has faced criticism over appearing at a media conference on Thursday alongside a young Coles worker who claimed to be impacted by the penalty rate decision.
The supermarket giant later clarified the staffer would not be affected.
"He is a keen young fellow. He does depend on penalty rates," Mr Shorten told Network Ten.
"He is concerned in the future he will have to negotiate to keep what he has got."
The Greens on Friday released a draft bill to enshrine penalty rates in law.
Greens MP Adam Bandt said he would seek to have the bill debated and passed before the FWC put in place legally binding orders to give effect to its penalty rates decision, which could take two or three months.
