30th April, 2018

Federal Budget 2018: What does the hospitality sector want?

Come budget time, a cavalcade of industry peak bodies present their budget wish lists. It’s now the hospitality sector’s turn.

Stating the wishes of an industry as diverse as the dishes they serve is a tough ask. The Restaurant and Catering Association of Australia (RCA) represents over 45,000 small businesses.

RCA’s policy and public affairs director, James Coward, told The Pulse that there are five core areas RCA wanted in the federal budget. Tourism is at the top of the list.

1. Boost tourism

Tourism and hospitality go hand in hand, Coward said. Anything that boosts the number of international visitors to our shores is a positive move.

“Tourists spent 22.3 billion dollars in restaurant and takeaway meals in 2017. That’s about 17 cents of every tourist dollar spent,” he said.

“Cafes and restaurants depend on those tourist dollars. They’re a critical source of revenue for the sector. They can’t survive without that business.”

He said the government’s move to start a $12 million business events fund received the thumbs up. But the RCA is rallying for a commitment to keep funding for major food events.

“Any money going into the Tourism Australia coffers is great. Then they’ll have more money to dedicate to campaigns highlighting the great food experiences Australia has to offer.”

The RCA also wants to lure more travellers to use working holiday visas in Australia for different reasons.

READ: 2018 Federal Budget: What happened last year and what will happen this year?

2. Working holiday costs

Coward said foreign labour encouraged by the Working Holiday Maker program has become an important pool of talent for the hospitality industry. But that pool is drying up.

“We’re talking skilled labour like cooks, chefs, café and restaurant managers which are currently struggling to fill,” said Coward.

He said 70.7 percent of RCA’s members had struggled to fill those positions with local talent.

There’s a 20 percent drop in Working Holiday Makers coming to Australia because the visa application scheme is too pricey, Coward said.

In the past the government promised to drop the cost from $440 to $390 for these visas. But it hasn’t been enacted yet.

3. The Skilling Australians Fund

Meanwhile, the RCA pushes for a shortfall in the Skilling Australians Fund to be topped up by the government, not the private sector.

In the last federal budget, the government started the $1.5 billion Skilling Australians Fund for more vocational training – to be funded by businesses hiring foreign labour.

Coward said the RCA supported the fund because Australians with niche hospitality skills were hard to come by, but it wonders how the government will raise the full $1.5 billion.

“What we’d like to see is the government come to the party and promise any funding shortfall will be covered by commonwealth funds,” said Coward.

4. The $20,000 instant asset write-off

Coward said small businesses in the restaurant and catering industry were huge fans of the $20,000 instant asset write-off scheme.

“The write-off has had a very positive impact on the hospitality sector,” he said. “Restaurants and cafes have assets which are very expensive – coffee machines or other cooking equipment that can equal that figure.”

Coward said while the RCA didn’t have firm figures of how many members used the write-off policy, it was incredibly popular and helped businesses in the sector.

“I can say anecdotally that businesses in the hospitality sector are embracing the policy, so we’d like to see it extended,” he said.

READ: The $20,000 question the government needs to answer

5. Relief on energy costs

Coward also said that businesses in the sector were very exposed to rising energy costs and want measures that help smaller businesses out.

“One of the biggest reasons why energy costs are so concerning for our members is because of the double-whammy effect,” said Coward.

“Not only do they pay more costs in terms of their bottom line. Their customers pay higher energy bills which takes away from their discretionary spend.”

Coward said one of the rising trends was customers still going out to eat, but they’re eating less. Coward saw the competition in the sector contributed, but energy costs were hitting the diner’s hip pocket.

“One of the first things we sacrifice in the household budget is that discretionary spending,” he said.

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