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Speaker 1: Fair Work Commission ruling on the minimum wage, and it's

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Speaker 1: going up by three odd percent three point two from memory,

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Speaker 1: I don't have the piece of paper in front of me,

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Speaker 1: but it is certainly going to rise. And I got

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Speaker 1: an interesting message today from Simone Douglas from the hospital Collective.

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Speaker 1: Simone runs a few pubs around and together with other people,

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Speaker 1: has the Hospo Collective in trying to get a good

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Speaker 1: deal for everybody in the hospitality industry. And Simona has

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Speaker 1: worked out the trickle down economics of a chicken schnitty.

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Speaker 1: So what goes in it? The three point five percent

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Speaker 1: rise today by the Fair Work Committee for Commission, Let's

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Speaker 1: find out, Simone Douglas. Good evening to you, Simone, good evening.

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Speaker 1: So the trickle down economics of a schnitty, this is schnitty?

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Speaker 1: Now is what the twenty five to thirty bucks roughly depending.

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Speaker 2: Where you are any we're depending yeah, where you're ordering

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Speaker 2: it and how big is look. I think it's probably

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Speaker 2: a really important point to make because the article I

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Speaker 2: posted on LinkedIn and Facebook has got to fair bit

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Speaker 2: of heat, which is to be expected. But I was

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Speaker 2: really clear, I don't begrudge anyone getting a wage increase.

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Speaker 2: You know, I'm happy for my staff to get a

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Speaker 2: wage increase. So that's probably the first point. And the

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Speaker 2: second question I get asked is, well, if you were

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Speaker 2: paying above award, you'd be allowed to have that conversation.

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Speaker 2: And I actually do pay a lot of my guys

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Speaker 2: above award, and I pay all my junior super which

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Speaker 2: I'm not required to do by law. But to move

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Speaker 2: on to economics, now that I've got that out of

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Speaker 2: the way, to say, controlling down the track. Realistically, the

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Speaker 2: map to maintain a thirty two percent labor cost, which

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Speaker 2: is our benchmark, but to be honest, we usually run

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Speaker 2: it closer to thirty five percent. It basically means that

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Speaker 2: we need to increase our current price from twenty seven

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Speaker 2: dollars seventy to twenty eight dollars eighty one just to

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Speaker 2: maintain the margin, assuming that no supplyer puts up their

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Speaker 2: prices after today, and we know that they all will.

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Speaker 2: So the extra costuff to maintain our current staffing hours

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Speaker 2: for a normal week. It's going to cost us about

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Speaker 2: eighteen hundred dollars a week more that I have to

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Speaker 2: come up with the Again, don't begrudge paying people for

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Speaker 2: the hours that they work at the rates that they deserve.

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Speaker 2: But I still have to find the money. And hospitality

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Speaker 2: isn't the only industry that's going to be feeling this tomorrow,

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Speaker 2: because not only do we have to come up with

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Speaker 2: the money just for the base increase, we have to

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Speaker 2: come up with the money to pay the extra work

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Speaker 2: coover levey because that's based on a percentage of your

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Speaker 2: total payroll, and we have to come up with the

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Speaker 2: extra payroll tax. So the state's coffers from the first

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Speaker 2: of July will be getting more money out of business owners,

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Speaker 2: not because our businesses are making more money, but simply

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Speaker 2: because of the legislated to pay our staff more and

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Speaker 2: therefore the government gets paid more.

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Speaker 1: Yeah, as a result of that, that's unreal. But in

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Speaker 1: the meantime, like any business cost, it gets passed on

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Speaker 1: and the person that picks that up is the person

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Speaker 1: who goes to the pub for the schnitty. And I

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Speaker 1: suppose if you stretch all that out where cost of

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Speaker 1: living is and everything else, potentially fewer people will be

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Speaker 1: going for a schnitty as a result.

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Speaker 2: Well, I think this is actually the reality. Fewer people

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Speaker 2: are going out, you know, and my argument I suppose,

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Speaker 2: or you know, my call to action when it comes

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Speaker 2: to both the federal and the state labor governments, who

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Speaker 2: both currently have a majority and there will have capacity

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Speaker 2: to make meaningful generational policy change, is to think differently,

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Speaker 2: not about wage increases, because yes, people would like to

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Speaker 2: have a decent quality of life. Think differently about your

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Speaker 2: economic policy. Think differently about your taxation policy, things like

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Speaker 2: payroll tax that aren't indexed in line with wage costs

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Speaker 2: and inflation. So what happens is every time the federal

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Speaker 2: legislators passed down, you know, a wage increase, you know,

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Speaker 2: the state treasury gets to rub their hands because they

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Speaker 2: know they know their costs are going to get extra

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Speaker 2: money because they don't index payroll tax in the line

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Speaker 2: with wage increases. So we pay thirty percent more, more

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Speaker 2: than thirty percent more than we did in twenty nineteen,

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Speaker 2: which was the last time that payroll tax threshold was

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Speaker 2: increased for businesses. And that's just a tax on jobs

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Speaker 2: at the end of the day.

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Speaker 1: Yeah, that's every business in essay, And you get this

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Speaker 1: call around budget time and around sort of certainly pay rises,

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Speaker 1: like this time that payroll tax is too high. It's

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Speaker 1: the one thing that every business seems to agree on

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Speaker 1: needs to be cut. But I don't think there's any

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Speaker 1: hope of that.

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Speaker 2: Well, I think regardless of whether there's any hope on it,

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Speaker 2: I think businesses need to push hard. We probably have

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Speaker 2: a got once in an eight year opportunity right now.

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Speaker 2: As business owners, you get our voices heard because governments

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Speaker 2: are in a majority, so they do have this cap

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Speaker 2: actually make unpopular choices and unpopular policy reform and change

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Speaker 2: because they'lll survive the next election regardless. But I think

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Speaker 2: also that you know that requires business owns should be

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Speaker 2: really honest about what it's like to be in business.

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Speaker 2: And people still think that anyone that owns a business

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Speaker 2: is making lots of money. You only have to look

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Speaker 2: at some of the commentary on some of the shares

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Speaker 2: of my Facebook post. You know, people are like, well,

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Speaker 2: surely you can absorb a tiny little pay increase to

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Speaker 2: your staff and just make less money. And I'm like,

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Speaker 2: I'm oh, okay, But you know, along with the thirty

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Speaker 2: five percent electricity increase that I absorbed this year, and

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Speaker 2: a very similar gas increase, and all of the supplier

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Speaker 2: increases when you're running it anywhere between most small hospitality

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Speaker 2: businesses anywhere from seven to twelve percent bottom line margins.

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Speaker 2: So if every dollar that you spend again, you know,

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Speaker 2: they've got anywhere between seven and twelve cents that and

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Speaker 2: they have to pay tax on that again like on

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Speaker 2: company profits as well, so you know, it's not the

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Speaker 2: nineteen eighties. It's not a license to print money. No business,

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Speaker 2: own a hospitality or otherwise outside a big corporate you know,

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Speaker 2: is necessarily in love with having a business right now.

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Speaker 2: And that's a really dangerous place to be because we

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Speaker 2: are the biggest employer in the state outside of government.

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Speaker 2: It's small business. So if government is making the risk

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Speaker 2: versus reward equation untenable, and in an environment where artificial

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Speaker 2: intelligence is decreasing the requirement for a lot of jobs,

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Speaker 2: that's a pretty ugly scenario if you push too far

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Speaker 2: down the line.

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Speaker 1: Yeah. Absolutely, How are things now? I mean we've spoken

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Speaker 1: over the last few years and during COVID, when things

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Speaker 1: were pretty dire and businesses were closing. We've gone through that.

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Speaker 1: A business is starting to survive now and the ones

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Speaker 1: at risk are still standing and hopefully getting stronger.

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Speaker 2: I'd love to say that we have and I look

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Speaker 2: at there, and there are lots of smart operators out here.

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Speaker 2: People tell me I need to go back to business

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Speaker 2: school and all of those kind of things. But but

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Speaker 2: you know the reality is that the actic figures on

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Speaker 2: insolvency are exponential nationally, and one in ten hospitality businesses

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Speaker 2: closed their doors in the last financial years. It's pretty

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Speaker 2: unsavory statistics if it's in the industry that you grew

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Speaker 2: up in and love. So I don't know that whether

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Speaker 2: we're through the worst of it or not, but I think,

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Speaker 2: you know, we really are looking to policymakers, to treasury

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Speaker 2: at a state and federal level, to you perhaps step

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Speaker 2: out of their ivory to cours and have a look

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Speaker 2: at what it's really liked and employees people in South

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Speaker 2: Australia outside of defense and government, and you know, maybe

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Speaker 2: help us come up with a framework that encourages the

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Speaker 2: entrepreneurs as tomorrow that are going to employ human beings

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Speaker 2: here in our state. Not necessarily sure or otherwise.

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Speaker 1: Yeah, that's right. Do you reckon a payroll tax would

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Speaker 1: make the difference a cut in terms of employing more

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Speaker 1: people and businesses growing as a result of that. Is that?

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Speaker 1: Is it as simple as that?

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Speaker 2: Look I think, I think it's always dangerous to oversimplify something.

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Speaker 2: But you know, my payroll tax bill is anywhere from

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Speaker 2: two thousand to three thousand dollars four thousand dollars per

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Speaker 2: venue per month. You know, it's not an insignificant amount.

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Speaker 2: You know, it's probably a casual staff member on twenty

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Speaker 2: hours a week, or it's the difference between you know,

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Speaker 2: maybe having a marginally profitable business that you're happy to have,

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Speaker 2: you know there, versus something that you have to work

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Speaker 2: in sixty seventy hours a week. Gee.

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Speaker 1: All right, So we'll see what happens in the budget

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Speaker 1: on what's today on Thursday, two days time.

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Speaker 2: Yeah, thanks mate, good.

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Speaker 1: On your Simone, all the best with it, thank you.

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Speaker 1: Simone Douglas from the Hospital Collective