What does a federal election mean for Victorian hospitality operators?

By Tom Streater | Director, Victoria

If you believe the reporting in the mainstream media this month, the Federal election scheduled for 2 July is a dual-to-the-bitter-end between half human-half tomato Barnaby Joyce and Johnny Depp with his rabid hounds Pistol and Boo. Or is Donald Trump going to be the new President of Australia?

If we cut through all the bluff and bluster and ignore the slogans, spend-o-meters, “jobs and growth” on repeat and Matthias Corman’s glowing praise for the leader of the opposition’s big heartednes, what would a Shorten-led ALP government versus a Turnbull-led coalition mean for our industry?

Issue LNP ALP
Taxation
  • Immediate company tax cuts to 27.5% guaranteed for smaller operators (<$2M) and (senate obstructionism pending), a 25% tax rate for all businesses <$10M by 2025.
  • Minor personal income tax cuts for middle income earners from July 1, unlikely to have a material impact on demand for our products (the ‘sandwich and a milkshake’ tax cut that wouldn’t afford a sandwich or a milkshake at most of your establishments) . A hit on superannuants with large cash balances. More likely to hit clubs with older clientele. But more likely to simply make older Australians slightly angrier without dinting their expenditure in venues particularly.
  • Also looking to hit superannuants, though claiming to be fairer than their rivals.
  • Opposed to tax breaks for the ‘rich’.
  • Opposed to tax breaks for companies earning >$2M per annum (most pubs with gaming).
  • Elimination of negative gearing on existing properties. May drive demand for new construction, boosting the incomes of tradies and representing an opportunity for clubs and pubs who attract that market.
Infrastructure
  • Targeting specific projects (and presumably specific marginal seats) in the Monash Fwy, Murray Basin Rail, M80, Great Ocean Road, Princes Hwy.

 

  • Nothing likely to result in any harm or benefit to venues except localised access issues and/or a boost to the incomes of construction trades workers who represent a market opportunity for venues.
  • Anti-Labor, anti-union commentator Grace Collier wrote this week that the ALP and their right-faction aligned leader is likely to look after their CFMEU mates by funding infrastructure projects across Victoria. Good for grumbling by conservative leaning readers. Good also for pubs and clubs adjacent to those projects who can benefit from ‘fluoro-shirt market’ patronising venues. Good also for those in catchments with high proportions of tradies, labourers and transport workers.
Health and education
  • A number of VET policies announced, none that will have a direct bearing on the hospitality sector.
  • Two of Labor’s 100 Positive Policies reference TAFE and the VET sector. Neither makes specific mention of the hospitality sector or addressing skills shortages in venues’ kitchens.
Tourism
  • Big commitment to the Dandenong Ranges and Yarra Valley. Great for operators in this area. Great also for sitting Liberal members in Casey and Latrobe.
  • Reducing carbon emissions to save the Great Barrier Reef appears to be the closest the ALP gets to a tourism policy. Seriously, 100 positive policies and there isn’t one driving the tourism industry.
Workplace relations
  • The party of small business have ‘run dead’ for two elections (2010 and 13) on IR and are set to continue to run scared after being booted from office in 2007 on the back of WorkChoices. The ‘our plan’ tab on the Liberal website doesn’t even mention IR so it seems 2016 will be business as usual almost a decade post WorkChoices. As an industry, we’d love nothing more than a Coalition with a serious policy platform to improve the lot of small business, addressing penalty rates and inflexible workplace arrangements.
  • This is likely to be an issue on which the ALP’s union ties put the party in direct conflict with hospitality operators. The maintenance of high penalty rates and rigid conditions will not be a vote winner for the ALP among operators, particularly those in small venues who have to work weekends themselves in favour of rostering casuals for $30+/hour.

Is there a clear winner for hospitality? Not really. Depending on how you weight particular issues:

  • If you’re a publican paying company tax and earning >$2M per annum in revenues, the Coalition’s economic plan is a winner for you. If you’re an income tax exempt club organisation, there’s really no difference between the parties on tax.
  • Infrastructure policies of the two parties will benefit venues in key marginals, boosting incomes and spending power of construction and trades workers who represent a key market for hotels rather than clubs.
  • Neither of the major parties is running on a policy that will boost the funding available for commercial cookery or hospitality qualifications. In fact, both will likely crack down on rorts in the VET sector at the expense of funding and incentive programs for students and venues alike.
  • On tourism, if your venue is in the Yarra Valley or Dandenong Ranges – probably vote 1 Liberal as they commit funding to retain Latrobe and Casey. Otherwise, this is little distinction between the majors.
  • Workplace relations continues to be a source of frustration rather than the definitive issue it should be, with one side championing a system that is stacked against hospitality employers and the other still running scared a decade on from their failed overreach. Most SME employers would love to vote Liberal on this issue but may be jaded by the policies in recent years.

In all likelihood, unless you live in one of a dozen or so ‘in play’ marginal seats, your vote won’t make a huge difference. Internal polling on both sides has the Coalition winning a second term with a slightly reduced majority. The key thing, perhaps, is to be aware of the risk of the protest vote and the rise of minor parties and independents. Another cranky Senate will result in 3 more years of stalemates or, perhaps worse, if it’s close and there are a few Nick Xenophon Team (NXT) MPs in the lower house, we may see a weak minority government having to bargain with Xenophon to get legislation passed. God forbid.

As a firm, we’re not partisan. If you’re a publican, a Coalition government will be better for your after tax profits. If you’re in a growth area with new housing developments (think Pakenham, Sunbury), Labor’s negative gearing changes might work for you by spurring more new home construction. If you’re a club person, it’s neither here nor there. One thing is for certain, we should all be careful of the crazies in the minor parties who are seeking to block the next government’s policy initiatives at the expense of progress, jobs, investment, growth and stability.

LATEST NEWS

Get the latest hospitality industry news delivered direct to your inbox by signing up to the DWS
Newsletter.

See the latest tender notification for the authorised sale of gaming entitlements for Clubs here.

With certainty now obtained, small businesses will begin to transition to the new Sunday penalty rates across a range of awards, however, it is critical that you understand the rules and what you can do as this fiery issue rolls out.

The Get in the Game grants provide funding to support not-for-profit local sport and recreation organisations to create and provide access to participation opportunities for Queenslanders, encouraging people to become involved in sport and active recreation!

css.php