Why Australian city centre cafes will permanently close from this month despite record employment


City centre cafes across Australia are at risk of closing despite employment numbers being at a record high.

Australia’s jobless rate fell to 5.6 per cent in March, the lowest since the start of the pandemic, as 70,700 jobs were created in just one month.

The number of Australians with a job rose to a record high of 13.078million.

Those numbers were taken before JobKeeper Covid wage subsidies ended on March 28, which could see struggling hospitality businesses shed staff.

Jobs in the food and accommodation sector plunged by 9.5 per cent between March 2020 and March 2021 even though employment in the broader economy rose by 1 per cent, Australian Bureau of Statistics data showed. 

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City centre cafes across Australia are at risk of closing despite employment numbers being at a record high. The GG Expresso chain of cafes, founded by Wallaby great George Gregan, is now in administration following the end of JobKeeper wage subsidies

City centre cafes across Australia are at risk of closing despite employment numbers being at a record high. The GG Expresso chain of cafes, founded by Wallaby great George Gregan, is now in administration following the end of JobKeeper wage subsidies

The federal government is propping up the tourism sector with taxpayer-subsidised, half-price airfares to 13 popular tourist destinations.

But Treasurer Josh Frydenberg has so far declined to unveil a special package for struggling city centre businesses.

Asked about an assistance package in next month’s budget, Mr Frydenberg said that was a responsibility of state governments.

‘No doubt the states are monitoring the situation closely,’ he told the ABC’s 7.30 program. 

In New South Wales, the state government is spending $500million on giving residents vouchers to dine out or see entertainment worth $100 per person.

The Dine and Discover program only applies to patrons who dine in – depriving takeaway joints of much-needed support as many professionals continue to work from home.

GG Expresso, a cafe chain founded by Wallabies great George Gregan and his wife Erica in 1998, was last month placed into administration as JobKeeper ended, leaving it with $1million in debts.

GG Expresso, a city centre cafe chain founded by Wallabies great George Gregan and his wife Erica in 1998, was last month placed into administration, leaving it with $1million in debts. He is pictured with Reds player Will Genia

GG Expresso, a city centre cafe chain founded by Wallabies great George Gregan and his wife Erica in 1998, was last month placed into administration, leaving it with $1million in debts. He is pictured with Reds player Will Genia

Chutaporn Luangchuang, who ran one of these cafes in Sydney’s city centre, lost her job as professionals continued working remotely.

‘Now they only work three days in the city and then two days at home, or sometime only two days. Yeah, that’s why it affects our business a lot,’ she told the ABC.

‘For my staff, it’s so sad, because they lose their job straightaway.’

Mr Frydenberg suggested more people would return to central business districts as public transport restrictions were eased. 

‘We’re going to see more people come back to the CBDs and those businesses will start getting back,’ he said. 

Chutaporn Luangchuang, who ran one of these cafes in Sydney's city centre, lost her job as professionals continued working remotely

Chutaporn Luangchuang, who ran one of these cafes in Sydney’s city centre, lost her job as professionals continued working remotely

Since April 1, Australians have been able to buy 800,000 half-price airline tickets to 13 popular destinations including the Gold Coast and the Sunshine Coast, and more out-of-the way places such as Alice Springs, Kangaroo Island and Broome.

Travellers will be required to travel interstate – something out of reach for months because of border closures – as part of the $1.2billion federal government subsidy package for the Covid-hit aviation and tourism sectors.

That program is ending on July 31.

Another subsidies program, Home Builder, ended on April 14.

This $2.5billion scheme gave $15,000 grants to first-home buyers to build a new house. 

Treasurer Josh Frydenberg has so far declined to unveil a special package for struggling city centre businesses. Asked about an assistance package in next month's budget, he said that was a responsibility of state governments

Treasurer Josh Frydenberg has so far declined to unveil a special package for struggling city centre businesses. Asked about an assistance package in next month’s budget, he said that was a responsibility of state governments

Everybody’s Home, a social housing advocacy group, has called on the government to extend the HomeBuilder subsidies to boost the supply of homes for those on low incomes.

‘The people who need homes are often women and children escaping family violence or people recovering from an unexpected illness or trauma,’ spokeswoman Kate Colvin said.

‘As the success of HomeBuilder shows, there are enormous economic benefits to stimulating the construction sector. 

‘By expanding this stimulus to social housing, we can also achieve a powerful social dividend.’

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