6 minute read
From the President
by Boylen
TIME TO FREEZE SPIRITS TAX
There are four facts we need the Federal Government to hear as we seek to include spirits with the current freeze on tap beer excise for on premise consumption.
1. Drinking In Pubs Employs More People
The on-premise portion of a hotel drives the pub economy. It is where the bulk of our 27,635 South Australian hospitality jobs are. It is inside the pub where the jobs are, where around 25 cents in every dollar turnover is spent on wages. . Each time one of our customers is corralled into buying a six-pack and drinking at home instead of taking a stool at the bar, an opportunity to create a job is lost.
2. Drinking In Pubs Is Safer
Drinking inside the pub is the safest form of drinking. It is inside our hotels where trained and licensed staff are serving alcohol in a controlled environment. A caring staff member is there to put an arm on the shoulder and assist someone who needs a spell.
3. Pubs Help Mental Health
Study after study reveals the power of mates talking to mates. As we come to better understand depression, especially male depression, mates talking to mates at the pub on a regular basis is incredibly healthy. Esteemed Oxford University academic, Professor Robin Dunbar found that people who visit their local pub regularly are not only better socially engaged but those visits also lead to better mental health outcomes.
4. High Alcohol Taxes Cost Jobs And Promote Drinking In Isolation
Despite the much appreciated freeze on CPI increases for two years announced by Prime Minister Albanese earlier this year, Australia still has the third highest rate of alcohol tax in the world.
Despite the freeze on beer excise, spirits poured at the bar are still captured by these “set and forget”, lazy tax hikes.
As Treasury reaps a whopping $8 billion of alcohol taxes each year, they are hitting pub patrons in the hip pocket at a time they can least afford it.
Takeaway liquor is cheaper, so people move away from social drinking in bars and hotels. That costs jobs.
We need everyone to continue to aggressively push for a freeze of CPI excise increases on spirits.
The last thing we need is backyard distilleries popping up, as we have seen with black market cigarettes.
The Sydney Morning Herald recently reported that illegal tobacco now makes up a staggering 39% of all cigarette sales.
Government need to be alive to the threat of illegal gin, vodka and tequila making its way into households that are desperate for any cost of living relief.
SURCHARGES HURT SMALL BUSINESS THE MOST
The Reserve Bank of Australia has a stated policy to ban credit and debit card surcharges next year.
This will be another devastating blow to small business. We know how effective our membership is when talking to their local members about issues like this. Now is the time.
The largest retailers pay a fraction of the rate that is applied to your local pub.
And of course, the major banks, along with VISA and Mastercard will not see their bottom line eroded.
Now we know that nobody likes to pay something for nothing. Especially when times are tough and every dollar counts.
Pubs and other small businesses understand the frustrations of Australians with the cost of debit and credit card surcharges, but it’s just a symptom of a much bigger structural malaise – unreasonably high fees. The RBA is right when it says fees charged by the card payments industry are “opaque and complex” but their proposed fix has a long way to go.
And it unfairly targets businesses like our membership. Our hotels often pay four times more than big businesses in card fees. Small business would not need to surcharge if these fees were reasonable.
Banning surcharges without fixing all the underlying issues just hides a political problem, which is convenient for the RBA. It’s a bit of the old ‘out of sight, out of mind’ trick, but it does not provide meaningful productivity reform.
Australians pay a whopping $6.4 billion in card payment costs each year. $4.5 billion of these card payment costs are paid by small to medium businesses under $10m. These businesses have no ability to negotiate with big banks and global players like Visa and Mastercard.
THE SOLUTION
To provide a more equitable balance, small business has proposed solutions such as
improving enforcement by the regulator, separating the pricing of debit and credit cards and regulating caps on scheme fees charged by the global credit card schemes.
But the RBA says that these proposals are not within its power, or too big a step, or just too hard. If the RBA does not have these powers, they should have and the Federal Government needs to act to give those powers to it.
The RBA also needs to act to address the disparity between debit card versus credit card transactions. The cost to process a credit card payment is at least twice that of processing a debit card payment.
Why? It’s because of the cost of perks for credit cards including for example frequent flyer points, complimentary travel insurance, airport lounge invitations, and so on. The perks for the 25% of credit card users are being subsidised by the 75% of debit card users. Is that a fair system?
Why should our members pubs subsidise VISA and Mastercard when they offer Frequent Flyer points as part of their card services?
We urge the RBA and the Federal Government to look at more workable solutions for small business, rather than punish a pub that is simply seeking a cost recovery on its business expenses.
ALGAL BLOOM
The State and Federal Governments have both been criticised for their sluggish response to the Algal Bloom crisis that has devastated our waters.
We welcome the recently announced 20,000 vouchers on offer for affected tourism operators. This will assist our coastal members.
At the risk of sounding ungrateful, it is too little, too late.
The lack of support for our affected members has been bitterly disappointing.
Families are in need of help now. The criteria to qualify for financial assistance has been ridiculously narrow.
Our members are the backbone of regional tourism and in many cases, the most significant employer in the town.
With no financial support forthcoming, our family pubs are still required to pay their rates, taxes and levies to all three tiers of Government . Fingers crossed the vouchers give our members a much-needed cash flow boost.
WOMEN IN HOTELS
This issue has extensive coverage of the Women In Hotels Conference, Dinner and Hall of Fame inductees.
Congratulations to the incredibly dynamic Leah Foster of the Palmer Group and the late and legendary Molly Meegan on being elevated into the Hall of Fame for their outstanding contribution to our industry.
While this is an outstanding event, let’s not forget that the massive contribution of women in hotels is occurring on a daily basis. Barriers are being removed and women are excelling in positions of leadership.
We are all the better for it and I look forward to facilitating further progress in the years ahead.
