Aussies cafe at war with federal government department amid claims of a 70% rent hike

The Department of Parliamentary Services has hit out at suggestions that the iconic Aussies cafe, in Parliament House, would have to change its name, and it has disputed allegations of a 70% rent hike as the department begins directly competing with the small business.

Aussies is the top location for pollies, lobbyists, journalists and staffers to congregate for coffees, food and gossip within Parliament during sitting weeks, but trouble is brewing between the business and its landlord and now competitor, the Department of Parliamentary Services (DPS). Proprietor Domenic Calabria went to the media over the weekend airing a dispute with DPS over a new lease agreement.

It was reported in The Australian Financial Review on Monday that DPS was demanding a 70% increase in rent from $94,000 per year to $160,000; had ordered him to stop using the name Aussies; asked for veto rights over the menus; and wanted KPIs in place for his staff.

DPS secretary Rob Stefanic hit back when the matter was brought up by Coalition backbencher Eric Abetz in estimates on Monday morning. Stefanic claimed much of the reporting was based on “misinformation” and the department had not been fairly represented.

There were no plans to change the name Aussies, he said. It was simply a clause to prevent a name change to something that would be inappropriate for Parliament. Like say, Deplorables.

The rent increase was also not as large as had been claimed, said Stefanic. It was up from $87,000 to $150,00 excluding GST, Stefanic said, but the increase was just a starting point for negotiations DPS was hoping to have with Calabria early next month. He said Calabria had refused to provide details of his turnover, meaning that a valuer had to estimate how much coffee Aussies sold in order to determine a fair lease amount (a source suggested to Crikey that DPS has seen the books in the past). Stefanic said that Calabria had not engaged with DPS about these concerns “other than to send an offensive email to one of my staff”.

Things got heated when Abetz questioned whether the department wanted to know how many coffees Aussies sold, and Stefanic initially claimed that DPS was only interested in gross sales, until Abetz produced the draft agreement highlighting an interest in knowing volumes of dine-in and take-away coffee, among other sales.

Stefanic also said that there wouldn’t be KPIs for the staff, just for the business overall. It would be “ridiculous” for DPS to demand individual staff KPI.

Aside from the fondness for Aussies — which is a fairly bipartisan view in the halls of power — Coalition senators appear to see the push on Aussies as a taxpayer-funded monopoly provider targeting the owner of a small business. Over Christmas, DPS took over catering responsibility for coffee carts and the staff dining room (referred to as The Trough). Abetz said this meant that DPS was now in direct competition with Aussies, and suggested it would lead to DPS trying to “undercut”Aussies. DPS was “hopelessly conflicted”, Abetz said.

Stefanic said in light of the agreement being made known to the media and senators, the process had not been proceeding like a normal negotiation.

“Do most commercial agreements get negotiated with a Senate committee?”

The department’s defence is essentially that the Australian National Audit Office had criticised DPS for a lack of a retail plan, and testing the commercial agreement (after 25 years) with Aussies was part of fixing that issue. Senate President Stephen Parry said that the department had been generous in allowing the current agreement to remain until 2019.

This article was first published by Crikey.