When Sarah Shaweesh opened her Palestinian restaurant, Khamsa, in 2023, a usual order from customers at St Peters eatery would include a meal, a drink and a pastry. But as inflation and cost-of-living pressures increased, the drinks started to drop off the dockets. Soon enough, the pastries did too.

“Then, a few months later, it turned into two people sharing a meal. And then three people,” Shaweesh says. “It’s not their fault. People don’t have enough money to pay their mortgages or their rent, so of course they can’t afford to eat out the way they used to.”

Dwindling revenue was only one problem for Shaweesh, who closed Khamsa’s doors for the final time on Sunday. The death blow came when her lease ended, and the landlord raised her annual rent from $95,000 to $140,000, far beyond what she was able to pay.

“As we close our doors, we feel it’s important to shed light on the challenges small businesses like ours face,” she wrote on Khamsa’s Instagram account last week. “Without meaningful government support, places like Khamsa are increasingly at risk.”

While there is a steady stream of new restaurants opening across Sydney, often managed by large hospitality groups, venue closures are also snowballing. Two-hatted Petermen in St Leonards, CBD Thai hotspot Long Chim and Surry Hills’ Dead Ringer are only a few of the high-profile restaurants which have permanently closed in the past six months, citing challenging conditions for hospitality operators.

Rising rent and living costs are the primary issues, but many restaurant owners say their industry needs more targeted help.

Corey Costelloe, owner-chef of hatted 20 Chapel in Marrickville, says simplifying the current Restaurant Industry Award system, which is plagued by complicated rules and red tape, should be a priority for an incoming government.

“It’s a nightmare,” he says. “We want to pay our employees fairly, but it’s so complex that you need to employ an accounting firm to keep track of it,” he says. It’s a cost he believes restaurant owners should not have to shoulder.

Rebecca Fanning, director of Surry Hills’ Arthur and Jane, and Fior in Gymea, says more needs to be done to bring down electricity costs. “At Fior, we spend about $4500 a month on electricity,” she says. “It’s gone up something like 30 per cent [since opening in March last year].”

Fanning also wants to see the category of “Restaurants and Cafe Managers” returned to the Core Skills Occupations List for temporary migrants, after it was removed with little warning in December, meaning she can no longer sponsor anyone from overseas for front-of-house work.

The Australian Restaurant and Cafe Association (ARCA), an industry group whose leadership team includes restaurateurs Neil Perry and Melbourne-based Chris Lucas, plans to lobby both the Albanese government and the Coalition on a set of policy priorities before this year’s federal election.

ARCA chief executive Wes Lambert says these priorities include removing the current 48-hours-per-fortnight cap on working hours for international students, and also reinstating overseas restaurant and cafe managers onto the core skills list for sponsorship. He criticised Labor’s plan to remove credit card surcharges, warning it would lead to restaurants and cafes passing bank charges onto customers.

The group also wants to see an abolition of taxes on tips, a policy promised by both the Trump and Harris campaigns in the recent US election. “We think that tips should be considered a windfall, like gifts or lottery or punting winnings,” Lambert says. “If you gift something, there’s no tax.”

In response to Good Food’s queries, spokespeople for both parties insisted that if elected this year, they would be the ones who would bring down inflation and stabilise the economy.

Policies directed specifically at small business include Labor’s pledge to extend the current $20,000 instant asset write-off scheme, which the Coalition has promised to expand to $30,000 and make permanent.

Prime Minister Anthony Albanese’s office pointed to the $325 of energy bill relief it has earmarked for eligible small businesses in addition to the $650 rebate already granted in 2024, while a spokesperson for Opposition Leader Peter Dutton said that adding more gas to Australia’s energy mix was the answer to rising energy costs.

Neither party offered any hospitality-specific promises, however Deputy Opposition Leader and shadow minister for small and family business, Sussan Ley, said she was hearing stories of hospitality heartbreak all over the country.

“Australia would not be Australia without our iconic cafes and restaurants,” she said in a statement. “I want to reassure business owners in this sector that a key focus we have had in our policy development is to help hospitality deal with skills shortages and ensure we get more people back through the doors of businesses.”

Meanwhile, Khamsa’s Sarah Shaweesh is not sure of her next move. She is considering reopening some sort of business in Melbourne where she says her rent would be significantly cheaper, perhaps focused more on community events or catering.

“But until I see the economy improving and the government actually doing something to help small business, it would be a big risk,” she says. “I love what I do. But financially? I’m scared.”