Latest NSW Covid lockdown to cost hospitality businesses $700m

Sydney’s latest lockdown will be the final nail in the coffin for more than 1000 hospitality businesses, costing them a whopping $700 million, experts say.

Circular Quay restaurant City Extra is a Sydney landmark but owner Steven Duff is a broken man after losing three-quarters of his staff and locking down his business once again.

His story is being replica­ted in hospitality businesses across Greater Sydney that will together lose $700 million in 21 days of lockdown.

City Extra cafe owner Steven Duff has lost 70 staff because of Covid lockdowns. Picture: Toby Zerna

“Don’t believe it when the NSW government says we are all in this together,” Mr Duff said.

“It has continued to throttle businesses with red tape.”

Since the now-redundant late-night drinking lockout laws came into place, he has paid almost $6000 a year to fund extra policing required because of his 24-hour liquor licence.

“I have applied for a hardship waiver but it’s crazy having late-night bars and pubs paying this fee because there is no one in the city, it’s a ghost town. We need some help,” he said.

A spokesman for Liquor and Gaming NSW said applications to waive the fees closed in May and instead ­encouraged licensed businesses to apply for government grants.

Mr Duff (left) and chef Brad French in their empty restaurant. Picture: Toby Zerna

Mr Duff said: “The City of Sydney Council is no better. I cannot get a repair person to come here because there is nowhere to park. The streets have been turned into empty bicycle paths.

“For lease” signs are ­appearing all over Circular Quay because “businesses are just giving up” after being slugged by 10 years of disruption from the light rail, lockout laws and the pandemic.

The NSW government last week announced grants for businesses from $5000 up to $10,000 for a business that has seen a 70 per cent decline in trade because of the ­pandemic.

“That won’t even cover the electricity bill,” said Mr Duff, who has only 30 of more than 100 staff still on his books.

The plight of Mr Duff and other business owners like him has prompted Prime Minister Scott Morrison to begin drafting plans for a joint rescue package should the lockdown extend beyond July 16.

The Daily Telegraph understands the federal government is prepared to contemplate assistance for small businesses — contrary to current contracts with the state in which assistance is limited to workers — on the proviso the state government significantly increases its financial commitment. 

“We are prepared to help out if this lockdown is prolonged but the NSW government would also need to dig a lot deeper,” a senior federal government source said. 

The usually bustling Circular Quay is deserted. Picture: AFP

Researchers estimate 1160 hospitality businesses will have closed permanently by the end of the pandemic.

Wes Lambert, chief executive of Restaurant and Catering Australia, said: “This lockdown has been much harder than previous ones ­because it came so quickly.”

He said the 21-day lockdown would cost the industry $700 million and help drive more than 1000 restaurants and cafes to the wall by the end of the pandemic.

“Businesses were told on Friday that they would be closed down on Saturday morning and they were not able to pivot into takeaway. They were blindsided,” Mr Lambert said.

“While we understand this is the correct health response, it is driving the final nail into the coffin of many businesses because they don’t know how long it will last or if there will be any ­further shutdowns.”

Mr Lambert called for more assistance from the NSW government, including waiving payroll tax for the first quarter of the financial year, increasing business support grants, and rental relief of up to $15,000 for businesses facing eviction.

Daniel Hunter, chief executive of Business NSW, said he understood the hos­pitality industry was par­ticularly hard hit but said all businesses were feeling the effect.

“We will continue to work closely with the government and we know they completely understand the current plight of businesses irrespective of their size or industry,” he said.

He said many big businesses with hundreds of employees were continuing to pay their staff despite their operations being completely closed.

One of the state’s biggest entertainment and hospitality employers, The Star, has vowed to keep paying its 4000 full-time, part-time and casual employees through the three-week lockdown — at a cost of $15 million.

A spokesman said: “The Star has been committed to supporting our thousands of Sydney staff despite the obvious and significant ­financial impacts the lockdown has had on our business.

“We will continue to pay them to the 16 July date the government has set for the lockdown to be lifted, regardless of whether or not they are required to work.”