Restaurants want Government to spend $27m subsidising meals

Thursday, 20 August 2020

Castro's Tapas & Bar manager Shannon Jules says: 'If we all work together and comply with the level 2 restrictions, I think we can all get out of it again.'

Hospitality outlets want the Government to spend $27 million on meal discounts to prevent widespread closures and job losses.

The Restaurant Association has launched a petition calling for subsidies of up to $20 per person for meals served at restaurants, cafes and bars.

Association chief executive Marisa Bidois said the proposed scheme, based on the United Kingdom’s “Eat Out to Help Out” initiative, would apply to food (not alcohol) served in-house from Tuesday to Thursday.

It would run for a month and the association estimated meal subsidies would cost the Government about $27m.

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Taxpayers’ Union spokesman Jordan Williams roundly condemned the idea of meal discounts as an example of “selfish pork-barrelling.”

“This is the most shameless, unprincipled, and disingenuous campaign from big food we’ve seen so far. Every dollar the Government spends right now is borrowed from tomorrow’s generations.

“The difficulty for taxpayers is that once the government capitulates to one sector, every lobby group and special interest will launch their own campaign. This one though is particularly opportunistic.”

But Bidois said that despite contributing more than $11 billion to the economy and employing more than 133,000 people, the hospitality sector had not received any targeted funding and 50 association members had already shut permanently, with the loss of about 1000 jobs.

Mojo Coffee’s New Zealand general manager, Katy Ellis, says the change in alert levels has hit CBD-based businesses hard as more people work from home and there is less corporate travel.

“This country has an incredible hospitality scene. And if we want it to survive the pandemic’s ongoing impact, the Government needs to do something different.”

A recent survey of 2500 association members found that 12 per cent of Auckland hospitality outlets and 5 per cent of those in other regions anticipated closing their businesses for good in the next 30 days.

Waharoa's Kaimai Cheese Cafe closed because of Covid-19 and the Restaurant Association warns there will be more business casualties if the industry does not receive targeted support soon.

Of businesses open at alert level 3, close to 90 per cent reported significantly lower revenue compared with the same period last year, and those operating at level 2 reported a 50 per cent drop.

“Aucklanders do move around the country quite a bit and it’s certainly noticeable in the regions.”

Mojo Coffee's New Zealand general manager, Katy Ellis, welcomed the idea of a meal subsidy to boost sales.

Hospitality outlets must now offer QR-code contact tracing, but there is concern that fear of Covid-19 is keeping some customers at home.

“It would be awesome to help the whole industry to rebuild.”

Mojo has closed all 13 of its Auckland cafes because their locations near the CBD and university meant it was not worth trading in level 3, and custom was also well down in central Wellington because many businesses and government agencies had staff working from home.

Ellis said they had already permanently closed a couple of cafes and it was possible more would go.

“We’ll need to review that when we return to normal, whatever normal looks like because it is changing all the time.”

Nigel Tollemache closed his Urban Verge cafe near Auckland’s Cornwall Park on Wednesday, prompted by bad weather and the big drop in business.

He’ll look at reopening in about a week, and said subsidised meal discounts might help overcome people’s fear of eating out during the pandemic.

“It’s just been the continual bombarding of news that doesn’t make people feel safe, secure and happy.”

Tollemache said the discount scheme could generate a lot of paperwork for business owners, and tax reductions or changes to the wage subsidy threshold might be easier to administer.

The petition supporting “Eat Out to Help Out” will be presented to Parliament on Tuesday, and Bidois said they were still consulting the industry on timing for the discount scheme.

October was a possibility, or perhaps April next year, but the plan was to wait until the country returned to alert level 1.

“We really want people to be operating as normally as possible.”

In the UK meal discounts were made available at more than 70,000 venues for three days a week between August 3 and 31, and Bidois said the scheme was used more than 10 million times in its first week.

She said UK restaurateurs had hailed it as a great success but Williams claimed it had been an “absolute disaster” which had failed to kick start the hospitality industry there.

“We note the Restaurant Association has also been lobbying to allow takeaways and deliveries to include alcohol. That’s a sensible move that won’t cost taxpayers a dollar. They should stick to that campaign.”