Rudd reforms threaten Gold Coast restaurateurs

THE Gold Coast’s once thriving hospitality industry is under threat with mass staff sackings and the shutting down of restaurants imminent as a result of Rudd Government industrial reforms.

After the Fair Work Bill is implemented by January 10, 2010, it is expected 1000 businesses will be shut down and 8000 jobs slashed Australia-wide.

Chief executive of Restaurant & Catering Australia (RCA) John Hart, says wage increases for restaurant staff to equal that of the hotel industry is vastly generalised and short sighted. He says most restaurants work to a 2 per cent profit margin and the proposed 7.5 per cent hike in costs will have to be passed on to the consumer via surcharges and increased menu prices.

“The reality is that costs will go up 15 per cent as part of the wage increases,” says Hart.

“Restaurants will be looking to pass on 7.5 per cent increase in some way to the consumer. This could be increased prices or by introducing a surcharge on Sundays or evenings, which is when 70 per cent of people eat out.”

From January 10, the existing hotels award wage will be applied to restaurants. Hart says it’s grossly unfair given the alternate revenue streams of poker machines and accommodation that hoteliers have.

He says consultation with the Australian Industrial Relations Commission (AIRC) ended in October and it was now a waiting game to see the final outcome of how the changes will be handed down.

“We spent a number of days at the AIRC and they didn’t listen to word we said, the politicians are wiping their hands and saying it’s a commission (AIRC) fault,” says Hart.

Restaurant & Catering Queensland chief executive James Visser, says restaurant owners should start planning now to better position their businesses and to offset any potential loss in revenue.

“The Gold Coast is not protected, it will feel this as acutely as anywhere else in the country,” he says.

“Every single business will be impacted. What concerns us most is that a lot of small businesses will try and leave it to the last quarter of the year to act.

There will be need for a lot of education about these changes.

“RCA will also be working with Julia Gillard’s office to try and alter the way this will be passed on to small business.”

The AIRC says representatives are not permitted to comment on specific cases but confirmed that stage two of the ‘transition’ had been completed, with a third and final stage of the awards ‘modernisation’ underway.