The Australian Hotels Association (AHA) has called on Government to help the hospitality industry recover from the impact of COVID-19 restrictions and lockdowns with a range of measures offering short- and medium-term relief.

The AHA said in its pre-Budget submission that it believes a key goal of this federal budget should be ensuring that businesses bearing the brunt of the COVID-19 pandemic are provided with short-term relief and medium-term stimulus to assist in paying back their accrued debts and employing more people.

In terms of short-term relief the AHA said it supports the pre-Budget submission of the Australian Chamber of Commerce, which calls for wage subsidy support for businesses still affected by Government-imposed trading restrictions arising from the COVID-19 pandemic.

Looking beyond short-term relief, the AHA said suspending Fringe Benefit Tax on meals and accommodation will provide a much-needed medium term stimulus creating instant jobs.

The AHA recommends the Government enable taxpayers who carry on a business, for the next three years:

  • Be allowed to claim a tax deduction and GST inputs on accommodation, meal entertainment and beverages (excluding alcohol)
  • Together with allowing a credit for the related GST and not requiring any FBT for the business owner or their employees.

AHA CEO Stephen Ferguson said: “The hospitality industry has been particularly affected by the restrictions implemented due to COVID-19. The Federal Government has provided significant assistance to business such as the Cash Boost Scheme and JobKeeper – and we thank the Government for all its efforts and leadership.

“However, accommodation occupancy and hospitality revenue for many regions such as Sydney CBD, Melbourne CBD and Far North Queensland are still down by more than 50 per cent. There is continued uncertainty regarding domestic travel, bans on international travel, and a slow move back to work in many office precincts.

“Those businesses that are now trading back at near or above normal levels have accrued significant debt due to government-imposed lockdowns and trading restrictions. Debts that accrued for example include deferred interest and rent payments plus a range of other charges such as electricity, taxes and rates.”

The submission also highlights economic modelling conducted by Ernst & Young, which shows that suspending FBT would have the following positive impacts per annum over three years:

  • Impact on GDP – ranging from $239m to $500m
  • Impact on employment FTE – ranging from 1,703 to 2,474
  • GDP per dollar of cost to government – ranging from $1.89 to $3.81

The AHA notes that the GDP per dollar cost to government is similar to that enabled by the Home Builder scheme, which has delivered significant investment to the building industry.

Ferguson added: “The hospitality and accommodation sectors play a vital role in providing jobs, especially to females and younger Australians. The sector was the hardest hit during the COVID-19 pandemic, and remains under government mandated ongoing restrictions. Whilst many businesses are recovering, and some businesses are doing extremely well, unfortunately many businesses are still likely to be severely financially distressed.

“Suspending FBT will increase economic activity in the sector, remove inequity between businesses of different size, increase GDP, increase employment, and stimulate the wider economy – saving businesses and thousands of jobs.”

The AHA’s submission also called for a moratorium on the CPI increases for all excise rates for beer and bottled spirits, saying it would ease cost of living pressures, support jobs and also support local craft brewers and distillers.

Andy Young

Andy joined Intermedia as Editor of TheShout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both TheShout and Bars and Clubs.

Leave a comment

Your email address will not be published. Required fields are marked *