The Federal Government has handed down the budget for 2021-22, bringing mixed results for the hotels and tourism sectors in a plan squarely aimed at Australia’s economic recovery.
The latest and third budget from Treasurer Josh Frydenberg outlines record funding and big spending plans, primarily toward creating jobs and keeping unemployment low.
Measures streamlining visa requirements to get workers into hospitality or working more hours will simultaneously address the chronic worker shortage in the services sector, a move that has been welcomed by the Australian Hotels Association (AHA).
However, the core goals of the government spending, as always, left some questions.
“Focus of the budget was on large infrastructure spending to kick start the economy, women, and older Australians, to fix retirement living,” explains Steve Gagel, hospitality specialist and director at financial advisory Prosperity.
“We have been working with Stephen Ferguson, CEO of the AHA, on a white paper to reduce FBT on food entertainment – to allow the corporate world to boost hospitality business until the international tourists return to our shores.
“Unfortunately, the budget was silent on this topic.”
The government’s new COVID-19 Pandemic Event Visa will pave the way for student visa holders to work more than 40 hours a fortnight, and let temporary visa holders work in the tourism sector.
“It’s encouraging to see government support for Aussie pubs through the relaxation of visa limitations for students and overseas workers – an incredibly valuable and scarce resource for the industry given current border restrictions,” offered Simon Le Grand, director at hospitality e-commerce provider Lightspeed, which has found itself at the forefront of pivotal changes in hospitality in the past year.
The budget also flags $255 million in tax relief for small brewers and distillers, lifting the excise relief cap from $100,000 to $350,000 – in line with the wine equalisation tax (WET) – and lubricating flow-on effects for alcohol retailers such as pubs, which faced unique challenges in the pivot to takeaway foodservice.
“Given the fact that consumers will continue to spend their discretionary income on domestic travel and hospitality experiences over the course of the next 12 months, it should go a long way to propping up Australia’s pubs and breweries,” says Le Grand.
The AHA believes the temporary visa changes will make a “real difference” in addressing the current and severe lack of staff, particularly chefs, and acknowledges the government “listened to the hospitality and tourism sector’s concerns”.
“What we need now is for the States and Territories to support the road to recovery by ensuring Australians have confidence to travel within our own country without fear of sudden border closures and lockdowns,” furthered AHA national CEO Stephen Ferguson.
The AHA and TAA welcomed other budget measures, including the 12-month extension to full deduction of all eligible depreciable assets, the 12-month extension of temporary loss carry-back, and extension of the Boosting Australian Commencement wage subsidy for taking apprentices.