The Morrison Government’s 2020-21 Budget has been called a “recipe for recovery” for more than 45,000 cafés, restaurants, and caterers across the country.
With hospitality one of the single largest employers of young people, the newly announced JobMaker Hiring Credit – which provides employers $200 per week for new employees aged between 16 to 29, and $100 per week for those aged between 30 to 35 – will reduce the costs of hiring new workers and will help businesses create more jobs.
Restaurant & Catering Australia (R&CA) CEO Wes Lambert says that initiatives include will save thousands of businesses from closure by stimulating demand from customers through personal tax cuts and giving businesses the right conditions to hire more workers and reduce losses borne as a result of COVID-19 restrictions.
“We know that demand to eat out is still high, so by putting $12.5 billion dollars back into the pockets of 11 million Australian taxpayers over the next 12 months, the government is doing its bit to stimulate demand across the Accommodation and Food Services Sector,” Wes says.
“Combine that with $1.2 billion committed for a 50 per cent wage subsidy for new apprentices and trainees under the Boosting Apprenticeship Commencements program and the newly announced JobMaker Hiring Credit, which will help thousands of hospitality businesses bring back the young employees that were lost due to the pandemic, and there is a real recipe for recovery.
R&CA also welcomed new announcements relating to loss carry backs, full expensing, and the expansion of small business tax incentives as an economic jump-start for businesses that have been struggling under mounting costs and debt throughout the pandemic.
“For many hospitality businesses that were previously profitable, being able to access their losses now in the form of a cash refund will give an instantaneous cash-flow boost,” Wes says.
“The expanded small business incentives will also help those businesses that sit above the $10 million cut-off to access those incentives for the first time. As these businesses seek to recover, the introduction of temporary full expensing will further encourage businesses to invest and create jobs.”
R&CA also highlighted the importance of new funding to help small businesses and a simpler and cheaper insolvency process in cushioning the blow for many small business owners across the country.
“We know that COVID will sadly cause many small hospitality business across Australia to close, so providing specialised funds to help these businesses grapple with a new digital world, help them deal with the rapid financial, emotional and operational changes brought about by the COVID crisis or help them wind up faster is an important and necessary problem that should be addressed,” Wes says.
R&CA adds that a significant boost to Tourism Australia’s Budget to help stimulate international, domestic, and regional tourists, as well as business events, will be vital in ensuring the broader accommodation and food services sector can land on its feet.