The Australian Restaurant and Cafe Association (ARCA) has warned that Australia’s hospitality industry is headed for a freefall in the wake of the latest Federal Budget which only allotted “crumbs” to the industry
“We are at breaking point,” said Wes Lambert, CEO of ARCA. “Costs are up. Tourism is down. Staff are scarce. Profits are vanishing. And yet the Federal Budget offered little more than a beer excise freeze and a power bill rebate. It’s not enough. The government has left the industry on life support – and the time for polite advocacy is over.”
Recent findings indicate that there are over 56,000 restaurants and cafes in Australia, employing more than half a million people. While these businesses are considered the lifeblood of cities and regional towns, soaring costs, red tape, and worker shortages have eroded average profit margins to below four per cent.
“This isn’t just an economic crisis – it’s an Australian cultural one,” Lambert said. “When restaurants close, communities lose jobs, vibrancy, and connection.”
With 9.3 per cent of the hospitality industry already plunged into insolvency and more than one in eleven venues predicted to close this year according to CreditorWatch, ARCA has launched a national campaign aimed to put the hospitality industry front and centre in the 2025 Federal Election through its ‘Positive Hospo’ Campaign.
ARCA’s Positive Hospo Campaign outlined its 10-point policy plan highlighted in their Pre-Budget Submission:
- Remova of Fringe Benefits Tax (FBT) on Hospitality – instated as a key election policy for the Coalition
- Freezing of alcohol excise Increases for 24 Months which has been set to take effect between August 2024 to August 2026
- Freezing of Income Tax on tips (gratuities)
- Digital tax rebate
- Fee-free VET
- Support for apprenticeships in restaurants and cafes
- No changes to junior rates
- Cafe and restaurant Managers to be added back to CSOL list
- Index changes to TSMIT to Fair Work Annual Wage Review outcomes.
- Increase in international student hours
“We will not let this election pass with hospitality ignored,” said Lambert. “The next government must choose: support the survival of one of Australia’s largest employment sectors, or be remembered for guaranteeing its collapse.”
