Annual wage review decision made to increase minimum wage for 2.6 million workers from July 1
The Australian Restaurant & Café Association said the wage hike would ultimately mean higher prices for customers.
“This wage increase is disconnected from the economic reality facing restaurants and cafés across Australia,” said CEO Wes Lambert.
“Inflation is moderating, productivity is in decline, and venues are barely breaking even – yet they’ve just been handed another cost increase they simply cannot absorb.
“Wage hikes without productivity growth are unsustainable. This will force venues to raise prices at a time when customers are already pulling back.”
Thank you, Donald Trump, you’ll probably give us another rate cut!
While we know the Government has backed a rise bigger than 2.4%, which is around the inflation rate, it hasn’t told us what it wants. On the other side, the Australian Restaurant and Cafe Association supports a minimum wage rise of 2%, which the ACTU says would mean a real wage cut for workers on the minimum wage.
The power of music in hospitality
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Tap and no? The card surcharges that look set for the chop
The Reserve says small businesses can be charged a whopping three times more in transaction fees than larger merchants.
The hospitality industry warns that menu prices will have to rise if businesses can no longer recover the cost of debit card payments from customers, saying a coffee that now costs $5.08 with a card surcharge might rise to $5.50.
“Of course it will be inflationary,” said Wes Lambert, chief executive of the Australian Restaurant and Cafe Association. “Removing a debit surcharge will translate directly to the bottom line. And to mitigate this drop in profit, we’ll see a sharp increase in prices much greater than 8¢ that we currently pay on a cup of coffee. We’ll be rounding that [price rise] to 10¢, 20¢ or even 50¢.”
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Small business hit out at the government’s plan to ban surcharges by the end of the year. Labor announced a plan to end debit surcharges before the election to help ease the cost of living.
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Australian Restaurant and Cafe Association chief executive Wes Lambert said that with profit margins of 3.3 per cent, restaurants “don’t have the ability to absorb penalty rates” which he said “punish” them for opening.
Albanese’s comments seemed “out of touch with small businesses, restaurants and cafes struggling to break even or in many cases losing money on weekends and public holidays, so that Australians can dine out” when they want.
Pubs say Albanese’s weekend surcharge comments aren’t so simple
Responding to Albanese’s comments to the AFR, Wes Lambert, head of industry group Australian Restaurant & Cafe Association, said the Prime Minister’s comments were out of touch.
“This is a glaring example that the current Government has no idea of the cost of doing business pressures and customer demand issues that the hospitality industry is drowning in at the moment nor the effects of penalty rates on the profitability of restaurants and cafés on the weekends and on public holidays,
Neil Perry’s minimum wage rise warning on menu prices
Australian Restaurant and Cafe Association argues the projected rate of inflation should act as a ceiling on minimum wage rises awarded by the industrial umpire.
With inflation expected to stabilise in the Reserve Bank’s 2-3 per cent target band, a 2 per cent pay increase “ensures that minimum wage earners experience no real wage erosion while allowing businesses some flexibility”.
“The minimum wage increase should not be viewed as a performance increase, rather as a cost-of-living increase, thus should not outpace future inflation under any circumstance.”
Labor’s pre-election promises were leaving small business, including restaurants and cafes, a little hungry, Australian Restaurant & Cafe Association chief executive Wes Lambert CPA, FGIA, CAE, MAICD said.
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The Australian Restaurant and Cafe Association said the increase should be limited to a below-inflation 2 per cent rise, warning its members “cannot absorb wage increases without price hikes”.
“The minimum wage increase should not be viewed as a performance increase, rather as a cost-of-living increase, thus should not outpace future inflation under any circumstance.”