Coronavirus: Hospitality seeks HECS-style loans to wean off JobKeeper

Government loans to wean off JobKeeper and taking fringe benefits tax off meals are at the top of the catering and hotels sector’s wishlist for the May budget.

Restaurant and Catering Australia chief executive Wes Lambert.

Government loans to wean companies off JobKeeper and exempting restaurants meals from the fringe benefit tax are at the top of the catering and hotels sector’s wishlist for the May budget, as industries worst hit by COVID-19 realise an extension of wage subsidies is likely off the table.

In their pre-budget submission to Josh Frydenberg, Restaurant and Catering Australia is calling on visa changes, boosts to apprenticeships, and more financial and tax support as fears rise that the COVID restrictions of last year will continue to be a threat until the end of this year.

Hospitality industry sources estimated up to $8m worth of produce was lost during this month’s Brisbane three-day lockdown as restaurants and cafes were forced to cancel bookings, and more data is expected next month on the damage of Christmas restrictions.

In his submission to Treasury this week, R&CA chief executive Wes Lambert writes that government loans — akin to recovery payments given out by states after natural disasters — could help businesses get back on their feet once the JobKeeper support ends at the end of March.

“These loans should also be repaid under a similar arrangement that exists for HECS debt, whereby the business is not required to repay the loan unless revenue is equal to their year on year revenue,” the submission states.

“R&CA submits that further support — by way of federal leadership — be provided to affected businesses to assist with the transition off JobKeeper, especially where businesses have extensive backdated debts relating to rents that have been deferred as a result of the pandemic.”

The calls for loans to help businesses transition from JobKeeper come as Queensland Premier Annastacia Palasczcuk ratcheted up demands that the Morrison government extend its $90bn wage subsidy scheme in some form to support tourism businesses.

The Treasurer has already rejected a proposal from R&CA to create a post-JobKeeper wage subsidy for the hospitality sector, and on ­Friday said there would be industry-targeted supports available after March.

“The Morrison government has done the bulk of the heavy lifting when it comes to economic support,” Mr Frydenberg said.

“Our support for the economy is continuing and will continue long after JobKeeper.”

The RC&A submission also calls for Mr Frydenberg to consider cutting the costs to apply for skill shortage and working holiday visas, funding to train employers on IR rules, and an extension of crisis support for apprenticeships.

Mr Lambert’s submission boosts calls to take FBT off food and beverages for a minimum of two years and therefore allow businesses to sell customers meals and drinks for a lower price.

Australian Hotels Association chief executive Stephen Ferguson has advocated the removal of FBT on meals for months and said the move would boost GDP.

“Accommodation occupancy and hospitality revenue rates for many regions such as Sydney CBD, Melbourne CBD and Far North Queensland are down by more than 50 per cent,” he said.

“Suspending FBT on meals and accommodation will provide a much needed stimulus.”