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Continue JobKeeper or face SA hospitality wipeout: AHA

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State hospitality leaders have called for JobKeeper payments to be extended for six months, warning that the scheduled September cutoff could see 70 per cent of SA’s  hard-hit food, wine and tourism operators wiped out by October.

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South Australian Hotels Association general manager Ian Horne today told a Budget and Finance Committee that without the continued JobKeeper stimulus – introduced to keep employees paid after coronavirus restrictions saw businesses shut down across the country –  many businesses would be forced to close for good due to ongoing distancing rules.

“If you took away the JobKeeper you’d have to be looking at least 70 per cent of our sector would not be able to sustain itself,” Horne said.

“At the moment, there’s probably 20 per cent who could fall over tomorrow – it is that fine.

“And there’d be another total of 40 per cent of our industry would be under great stress and they’re only hanging in there because of JobKeeper or they’ve got some concession from their landlord, deferring rent, or they’ve got some concessions from their local government.

“The deferrals will all generally come at the end of September and the banks are giving a debt reprieve for three months, but of course that is accumulating the debt.

“There’s not a lot of waivering and that’s been one of our great disappointments with local government. Some local government has been fantastic and the majority have done nothing.”

Restaurant and Catering Industry Association CEO Wes Lambert said if the JobKeeper payment wasn’t extended many small and medium restaurants and cafes would hit the wall.

“I can tell you, come the 1st of October when JobKeeper expires in our industry, if it’s not extended, you will see a rash of insolvent businesses and administrations,” Lambert said.

“The insolvencies that were put in place temporarily to keep you from insolvency isn’t an excuse.

“So, on the 1st of October, if you were trading insolvent then you’re trading insolvent and so you would immediately go into administration if you can’t pay your bills if and when they’re due.

“We will see a bounce in early October if the state and federal stimulus measures do not continue ahead. Especially as the states are seeing a continued spike in cases.”

The RCIA is pushing the government to increase the number of patrons permitted in venues in South Australia.

“Since in South Australia the infection rate is quite low we do hope we could move to a one (person) per three (square meters) or one per two,” Lambert said.

The comments follow the easing of restrictions in South Australia on June 19.

The latest rules – labelled by the state government as “stage 2.5” – lifted the number of people per room in venues like pubs and restaurants from 20 people to 75.

The total maximum for venues was increased to 300, as long as there was enough room to maintain a density of one person per four square metres.

Stage three of SA’s restriction easing is due to begin June 29 and will allow one person per four metres.

But Horne said the number of patrons permitted into venues should be doubled in line with similar restrictions in West Australia.

“If you have a bar, in say Peel Street, that is 100 square meters …at best they could have 25 people there,” Horne said.

“But, by the time you extract the bar areas and the working areas and the pub it may well be that they have 80 or even less. And of course, 80 square meters means you can only have 20 people.

“Western Australia have … for two weeks now been operating under one in two, so that is one person for every two square meters, which is effectively 50 percent of what they normally were.

“Keeping in mind you must maintain social distancing.”

Horne said the accommodation sector had also been hard hit by the restrictions, with data from international company STR Global indicating accommodation occupancy levels in SA had dropped more than 60 per cent in the past 12 months.

He said hotel occupancies in April 2019 reached 82 per cent compared with 16 per cent in 2020.

While May 2019 occupancies reached 76.7 per cent in 2020 it was 21 per cent.

“That‘s clearly reflex that with the boarders closed, the international flights, the interstate flights, no business travel, no tourism that’s … had significant impact on those operations,” Horne said.

He said the association wanted borders opened between the western states and South Australia.

“I’m more cautious today than I would have been on Friday, because of what is happening in Victoria. But certainly … I did hear the Premier make comments on the radio this morning that we haven’t in South Australia had a community transition of the virus since the 20th of March,” Horne said.

“That’s close to 90 days … that’s a fantastic outcome and all credit to the health professionals who’ve got us to this stage.

“But we’re concerned that the cure might be more damaging than the disease if we’re not careful.

“I think it’s crucial that we do start to open up the borders, that doesn’t mean open slather.

“But let’s have relationships with Western Australia, Northern Territory, New Zealand if possible, Queensland … and make sure our regulations and policing of those processes are in place – but our industry would just stagnate if we can’t get those borders open.”

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