The Advertiser Round Table: How to bring life back to Adelaide’s CBD

Dumping the tax on staff benefits such as long lunches and city parking, as well as ending Covid restrictions, are keys to luring workers back to the CBD, business leaders say.

South Australia is leading fresh calls to freeze the tax on staff benefits such as long business lunches and carparking in an effort to lure office workers back to CBDs across the country.

In one of his final pleas before stepping down as boss of Business SA, Martin Haese has urged the federal government to temporarily waive fringe benefits tax on work lunches as small businesses look to recover from being left in a “ghost town” amid the Covid-19 pandemic.

SA’s head of the Australian Hotels Association, Ian Horne, has backed the former lord mayor’s calls, describing it as a “proactive” measure that would give city restaurants, bars and cafes another shot at survival.

Outgoing Business SA chief executive Martin Haese has urged the federal government to temporarily waive fringe benefits tax on business meals.

Mr Haese welcomed the return of public servants to the CBD earlier this year, but said more needed to be done to secure the city’s economic recovery.

“SA has done incredibly well throughout this global pandemic, however, what will get us across the line now in this final leg of the relay is both state and federal governments using all possible policy levers available to them,” Mr Haese said.

“Temporarily waiving fringe benefits tax on business entertainment will be a welcome boost for hospitality, accommodation and entertainment venues.”

Mr Haese said waiving the tax, which employers must pay on most non-cash benefits given to their workers at a rate of 47 per cent, would stimulate demand and keep people in jobs.

Adelaide’s office occupancy rates are nearly at 50 per cent of pre-pandemic levels, a sharp rise from about 10 per cent in January when the Omicron variant was spreading rapidly across the state.

Mr Horne said fringe benefits tax was no longer just applicable to high-flying corporate workers enjoying boozy lunches with clients.

“Now, businesses are far more focused, far more efficient. It’s not about the big end of town having Friday piss-ups – it’s about how you can regenerate interest in dining out for the corporate sector,” he said.

AHA SA boss Ian Horne joined Mr Haese in his calls to freeze fringe benefits tax on business entertainment.

Parking Australia boss Stuart Norman said the levy, which applies to carparks that cost more than $10 a day, “effectively doubles the price of parking for businesses”.

“That is an enormous disincentive for businesses to go and purchase parking to get their staff back to work,” Mr Norman said.

In 2019-20, the federal government raised more than $246m in fringe benefits tax on parking Australia wide and more than $419m on meal entertainment.

The federal government and Labor have not outlined their positions on the tax in the lead-up to the March 29 budget.

“The government doesn’t comment on budget speculation,” Treasurer Josh Frydenberg said.

Call to end Covid restrictions, packages

Removing uncertainty about Covid restrictions is key to rebuilding the city’s business district after two crippling years, according to local business owners and lobby groups.

They told The Advertiser’s latest round table – called on Monday to discuss ways to bring life back to the city centre – that city businesses needed confidence that they would not be left crippled by another Covid outbreak.

“The CBD has been disproportionately impacted,” Business SA and Adelaide Economic Development Agency chairwoman Nikki Govan told the roundtable, held at Sir Keith Murdoch House.

“We need to hear from the government, if there is another variant, what are the restrictions … they should be well planned.”

The Advertiser Round Table participants Rachel Sanderson (Member for Adelaide), Oliver Brown (city business owner), Josh Baker (city business owner), Jennie Wilkinson (Committee for Adelaide Policy Manager) and Ian Horne (AHA SA chief executive). Picture: Keryn Stevens

The Advertiser Round Table discussed how to bring life back to the CBD. Picture: Keryn Stevens

The roundtable sought advice from hospitality operators, politicians, business leaders and Adelaide City Council.

Oliver Brown, who owns city bars NOLA Adelaide and The Stag and East End restaurant Yiasou George, said it was “time to move on” from government stimulus packages.

“We can’t pay for everyone’s jobs, no one has enough money to float every business,” he said.

“But we need to reduce those (Covid) restrictions so we’re not left behind the other states. We also need to know that we’re not going backwards, that the city is open for good.

“The last thing you want to do is empty your war chest for a new outdoor dining area and then we’re going back into lockdown.”

City business owner Josh Baker. Picture: Keryn Stevens

The roundtable – attended, either on video or in person, by Adelaide Lord Mayor Sandy Verschoor, Labor candidate for Adelaide Lucy Hood, Australian Hotels Association SA chief executive Ian Horne, Committee for Adelaide policy manager Jennie Wilkinson and city business owner Josh Baker – highlighted major issues for the city, including:

THE need to incentivise people to return to work and entertain in the city, rather than in the suburbs;

CALLS to boost the number of people living in the city;

PLEAS to support the city’s live music industry and bring back dancing;

CLARIFICATION of the state's Covid-19 close-contact rules; and

AGREEMENT that SA needs “responsible, sustainable” population growth.

Adelaide MP Rachel Sanderson told the forum the state government had already promised there would be no more lockdowns.

Liberal MP Rachel Sanderson. Picture: Keryn Stevens

She said business running costs, including payroll tax, electricity and water, had been cut and the Liberals’ planned $662m Riverbank Arena would bring more business events and live music to the city centre.

But Ms Hood said SA's hospitality sector had “paid the price” for a health system that wasn't ready for the pandemic.

She also said Labor would spend $40m targeting international and interstate visitors to the state.

“We need to bring our city alive again,” she said.

Ms Verschoor said the council’s $7.5m package had included grants for Covid-hit businesses and Adelaide Unleashed, a program to reactivate the city.