Award wage rise to $60 per hour hurts hospitality in cost of living crisis
Australia’s hospitality industry is fighting for survival, after two recent award wage increases spiked junior staff holiday pay to $60 per hour.
That’s on top of an increase to superannuation.
The most recent award wage increase was 5.75 per cent, which compounds the 4.6-5.2 per cent increase that came into effect in October 2022.
South Australia’s restaurateurs have said the industry is at “rock bottom” and that the pandemic was a “dream” compared with the current economic climate.
The industry has suffered two award wage increases in less than 12 months, despite rising interest rates and talks of a recession.
CREAM cafe and Remy’s Deep Dish Pizza & Bar owner Josh Rivers said he was paying his Adelaide staff “executive level money” on public holidays.
His casual workers are raking in $60.20 per hour, while the business is “trying to sell scrambled eggs and coffee”.
“For 10 staff, that’s $600 per hour,” he said.
Many venue owners have reported a downturn in business as people tight their belts in the cost of living crisis.
“We’re in a full-blown recession,” Rivers said. “It’s the worst downturn I’ve seen in the nine years of being in business, and that’s including Covid times.
“Covid was a dream compared to what we have now. People still came out, whereas right now people are terrified to spend money.”
Rivers runs three businesses and estimates that overall operational costs including overheads, produce and wages have escalated by around $20,000.
“It’s not something that can be countered by raising the price of coffees by 10c,” he said.
“Prices need to go up through the roof. A cup of coffee, realistically, should be $8-$9 for a small.”
The recently released Restaurant & Catering Association’s 2022 Benchmarking Report shows half its respondents recorded a decrease in profits in the last three years, with owners underpaying themlsves.
Eight in 10 respondents predicted menu prices will jump significantly in the coming 12 months.
Emily Raven who runs My Kingdom for a Horse and A Prayer for the Wild at Heart predicts more restaurant closures and rising menu costs.
“Closures are happening more than we realise.
“If you’ve got a meal that costs $22, $2 goes to the government for GST, after that there’s $10 on wages including super, then you’ve got food costs which you would want to keep under $5, then you’ve got to cover the overheads – power, public liability insurance, rent – and if there’s anything leftover, 1-2 per cent, that’s your net profit,” Raven said.
“I try to stay upbeat. I think it will get better. We’re at rock bottom at the moment.”
Rivers has called for government support for hospitality.
“The budget needs to have a sector to help out small business,” he said.
“Hospitality is the third largest sector (for employment) on earth. If we can’t keep up, what’s going to happen?”
Jonathan Jackson, 10th July 2023
