New research suggests the key Coalition-held Queensland electorates of Leichhardt and Dawson will be hit hard by the decision of the Fair Work Commission to cut Sunday penalty rates for workers in hospitality, retail, fast food and pharmacy.

Modelling undertaken by the McKell Institute examining the impact of the penalty rates decision in regional Australia finds the federal seat of Leichhardt, held by the veteran Liberal MP Warren Entsch on a margin of 5.7%, will lose the most in disposable income courtesy of the decision – approximately $21m.

The electorate of Dawson, held by the outspoken Liberal National MP George Christensen, also stands to lose out. It is the third-worst hit on a list of regional electorates, facing potential income losses across the electorate of approximately $19m.

The Labor-held electorate of McEwen in Victoria faces potential income losses of $19.2m, according to the study.

Responding to the research, the Australian Council of Trade Unions secretary, Sally McManus, said cutting penalty rates was “a cut to workers’ take home pay that they can’t afford and don’t deserve”.

“It will mean many people who do work Sundays will be forced to work harder just to stand still.”

But Entsch told Guardian Australia he was a supporter of the penalty rates decision, which he insisted would be “great for employability in the region”.

Asked whether he had any concerns about its impact, Entsch replied: “No.”

The Liberal MP said he would rather see local businesses open and providing employment opportunities than constrained by unaffordable labour costs, or being forced to close on Sundays. “No salaries are generated by businesses that are forced to close,” Entsch said.

Labor and the trade union movement intend to use the controversial penalty rates decision as the basis for a grassroots campaign that will run from now to the next election.

The Liberal MP said his electorate office in north Queensland had already been targeted by trade union protests. Entsch said the unions he had seen protesting locally represented workers who were not affected by the decision.

He declared that the Labor leader Bill Shorten’s political campaign against the penalty rate cut was “a load of bullshit” given that he had initiated a review into penalty rates when he was workplace relations minister, and he said decisions by independent tribunals needed to be respected.

The new report from the McKell thinktank says workers in 45 regional areas will lose $667m a year as a consequence of the FWC decision.

It also estimates that at least $289.5m will be removed from regional and rural Australia as a consequence businesses shifting money previously allocated for labour costs in regional and rural communities into other jurisdictions.

The data for Leichhardt says more than 9,348 workers will suffer the loss of at least $21,062,030.70 a year in disposable income as a consequence of the decision.