Australian Restaurant Cafe Association slams minimum wage hike

Upping the minimum and award wages will only lead to more restaurant closures and higher menu prices, according to a newly formed hospitality body.

A newly formed hospitality body has slammed the annual wage review as “hopelessly out of touch”, with the “bordering reckless” decision only leading to more menu price hikes and restaurant closures.

While The Australian Restaurant and Cafe Association — made up of top chefs and industry leaders — said it supports fair wages, chief executive Wes Lambert said Monday’s minimum and award wages increases would only making already stretched venues worse off.

“The decision will definitely lead to cafe and restaurant closes,” Mr Lambert said.

ARCA chief executive Wes Lambert and chef Luke Mangan.

“At a time when our industry is striving to recover and thrive amid economic challenges, the

proposed wage increase by the Fair Work Commission is not only hopelessly out of touch but

potentially damaging … and borders on reckless.”

Mr Lambert said the Fair Work Commission should be looking at wage review decisions by industry, similar to what was seen during Covid.

“We cannot continue to practice a one-size-fits-all approach to wage increases each and every year,” Mr Lambert said.

“While there has not been broader wage price spirals in every industry, there certainly has been in restaurants and cafes, where menu prices are up — in many cases 15 per cent from 2023 — to cover the unrelenting wage pressures, rent increases, insurance and utility rises.”

Fair Work Commission on Monday increased the minimum and award wages by 3.75 per cent (4.25 per cent, with the upcoming 0.5 per cent superannuation increase) on the back of the 2023 rise of 5.7 per cent (6.25 per cent with the superannuation rate increase).

The clapback comes just days after some of Australia’s biggest names in food and hospitality met on Friday to hold a crisis meeting in a bid to save their industry from crippling financial pressures which has already shuttered hundreds of venues.

More than ten Melbourne restaurants have closed in 60 days, several in Sydney, with many on a knife edge and more big names expected to shut over winter.

One in every 13 hospitality businesses faces failure within the next 12 months, says a grim CreditorWatch report released last week.

ARCA will next meet in August.