Budget 2022: Hospitality owners call for urgent action as staff shortages replace lockdowns as number one challenge

Restaurant owners want next week’s federal budget to address staff availability and the punishing cost of doing business, six months after pledges in the last budget left one small trader feeling like a “tool” in an election campaign.

Treasurer Jim Chalmers will hand down the federal budget on Tuesday, marking his first economic roadmap in the job and Labor’s first budget in nearly a decade.

The March federal budget, revealed by former treasurer Josh Frydenberg two months before the federal election, promised small businesses billions of dollars in financial support through bonus tax write-offs, apprenticeship wage subsidies, and Pay-As-You-Go (PAYG) tax tweaks.

Speaking to SmartCompany ahead of the March budget, Renée Wallace, owner of Birch restaurant in NSW’s Southern Highlands, welcomed the Coalition’s commitment to PAYG reforms but feared the budget would provide few hard-and-fast fixes for small businesses.

With businesses still buffeted by the skills shortage and rising costs, Wallace says the October 25 announcement should focus on policy, not politics.

“Last time I spoke about this, I said it just feels like we were a tool, really, in a game of who’s going to win the election,” she said.

The federal government has already given a preview of what small businesses can expect, including $14.9 million in funding for dedicated SME owner mental health support and debt counselling, and $36.1 million in new funding to accelerate visa processing times.

Wallace welcomed measures designed to grow Australia’s workforce, saying hospitality businesses are closing their doors, altering their trading times, or simply saying no to growth opportunities due to a lack of staff.

But she worried this budget would do little to address the sector’s immediate concerns.

“I really feel now’s the time for action, and it would be really great to see some of that action be put into place quite quickly, so we can actually start seeing some progression in recovery,” she said.

One measure the government could take is providing further leniency to small businesses repaying loans and rent deferred over pandemic shutdowns, and a longer grace period for accumulated tax debts.

As the Australian Taxation Office ramps up its enforcement activity, Wallace voiced her concern for businesses still playing catch-up.

“I really feel that it’s almost a forgotten aspect in that like, ‘COVID is gone now, and we can just get back to normal’. It’s not that at all,” she said.

“There are so many businesses who are still catching up on rents or catching up on insurance, or things like that.

“I really feel there just needs to be that a little bit more extension in that leniency around those tax timelines, breaks, payment plans, and things like that, just to enable people a little bit more time to get their feet back on the ground.”

Hash Tayeh, founder of Melbourne-based chain Burgertory, agrees that staff availability is the sector’s most pressing concern.

“There’s a huge hole in hospitality at the moment,” he said.

Beyond accelerating the visa approval process, the government should commit further resources to advertising Australia as a place to live, study, and work, he says.

A federal expansion of programs like Victoria’s $25 million diner cashback scheme, would encourage Australians to visit their favourite local restaurants as the cost of living increases, he added.

More bespoke programs are also on the wishlist: Tayeh says the government could consider subsidising small restaurants for the fees they pay to food delivery app platforms.

Such measures seem unlikely.

Initiatives designed to encourage consumer spending cut against broad inflation-busting goals, and Chalmers is already under pressure to undo the Stage 3 tax cuts destined to keep $254 billion in the public’s pocket over ten years.

While those policies may be a longshot, they speak to pressing concerns in the hospitality sector: that big-spending policies designed to keep businesses afloat through COVID-19 lockdowns are becoming obsolete, and that urgent updates are required.

“You can talk about it ’til you’re blue in the face,” Wallace said.

“But unless you start actually seeing some action from those breaks, or cuts, or whatever might be implemented because of that budget, it’s really irrelevant.”