13 o Hereturikōkā 2020
To: Prime Minister – Rt Hon. Jacinda Adern
Kei te rangatira, tēnā koe
Recommended changes for hospitality
I am urgently seeking your assistance to prioritise a few pragmatic measures and introduce some novel actions, to help hospitality businesses remain afloat during the next period of uncertainty.
When we last moved to Alert Level 4 back in March, a blanket ban was placed on hospitality operations, meaning 98 per cent of our member businesses had no ability to generate revenue. This cannot repeat itself if we hope to see our prized hospitality sector survive the pandemic.
The Restaurant Association of New Zealand has been working on a suite of initiatives to help soften the blow to hospitality in the event of Alert Level movement and community transmission as we are experiencing now. We are asking the Government to consider:
- allowing the continuation of contactless food pick up and delivery at Alert Level 4
- introducing a Government supplemented dining campaign
- removing GST on fresh fruit and vegetable produce.
Allow for the continuation of contactless food delivery and pick-up at Alert Level 4
We have seen unmitigated success with contactless food delivery and pick-up, following the creation and introduction of Alert Level 3 operation guidelines. These guidelines set out how food and beverage businesses can implement safe contactless delivery and pre-ordered pick-up programmes. It is our view that should we return to Alert Level 4, the Government removes the current Alert Level 4 restriction on contactless food delivery and pick-up and takes steps to ensure it can continue.
We are still yet to see compelling evidence that confirms COVID-19 transfers through prepared food, and our sector has more than proved itself in its ability to continue to feed their communities while still managing COVID-19 related risks in the workplace. In an international context, we remain an outlier in terms of contactless food delivery and pick-up at Alert Level 4, with Canada, United Kingdom, Italy and Australia all still operating contactless food delivery and pick-up services during their nationwide lockdowns.
Over the past few hours, we conducted an urgent survey of our Members and nearly 50 per cent would be in support of the Government making this change for hospitality at Alert Level 4, should we have to return.
An additional 14 per cent of Members were unsure, with a few noting it did not suit their type of business, but many commenting it would be cost prohibitive unless there was the wage subsidy to help them ensure their workers could remain on at least 80 per cent of their wage. This supports the need for an additional regional wage subsidy, which I know the Minister of Finance is working through with officials.
Introduce a Government supplemented dining campaign
Recently, the United Kingdom (UK) took the novel step to introduce the Eat Out to Help Out initiative, which will see diners across the UK enjoy half-price meals throughout August.
Launched by their Finance Minister equivalent, Rt Hon Rishi Sunak MP, the initiative is part of a government scheme aimed at boosting restaurants and pubs post-lockdown. The Chancellor said the primary objective of the initiative is “to help protect the jobs of 1.8 million chefs, waiters and restaurateurs by boosting demand and getting customers through the door.”
A scheme similar to this in New Zealand for in-house dining at appropriate alert levels, as well as takeaway options and contactless food delivery at all levels would put much needed cash back into the pockets of businesses that are struggling to stay operating and keep their workers employed, whilst also helping Kiwis to get a freshly prepared meal at a discounted price.
Despite generating annual sales in excess of $11 billion and employing more than 133,000 people, hospitality has been one of the hardest hit sectors through this pandemic, and without targeted support, the sector will suffer once again.
We have a membership of 2500 establishments alone, who we know would support this scheme and we’re ready and able to work with the government and its associated agencies to roll this out here.
Remove GST on fresh fruit and vegetable produce
In a media release today, Stats NZ confirmed that fresh vegetable produce prices continue to grow, with fruit and vegetable prices up 9.8 per cent in July 2020. Stats NZ also pointed to the cost of eating out becoming more expensive, attributable largely to the increase in the minimum wage in April coinciding with the increase in the cost of restaurant meals and ready-to-eat food.
An interim measure of removing GST on fresh fruit and vegetable produce would go some way in eroding the increases in costs that hospitality operators and consumers are currently experiencing. In our view, this could be a time limited initiative, in place until the summer months when we traditionally see prices for produce come down, and an increase in foot traffic in hospitality establishments nationwide.
There would be wide ranging benefits to this kind of action, including decreasing the direct cost to household budgets, supporting the local producers and suppliers, not to mention stimulate spending on fruit and vegetables.
Next steps
Our industry has been battling for months now with thousands of jobs lost and businesses looking to close their doors for good. We have supported the Government’s work to stamp out COVID-19 in our country, and will continue to work to support this ambition. We need to see urgent leadership for hospitality, if we are to keep workers in jobs across our sector, and maintain livelihoods.
Myself and my team are actively working on the shape and scope of this suite of initiatives and are available to work alongside officials with urgency to make sure these work if adopted. Now is the time to be bold, and ensure our industry survives this next period.
I would value the opportunity to talk through these issues, and am available to brief you or your officials as required.
Ngā mihi nui,
Marisa Bidois
Tāhūhū Rangapū (Chief Executive)
Restaurant Association of New Zealand