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Every sector analyses the budget to see what’s in it for them. So what was in the budget for the hospitality sector, or more importantly, how does any budget help or hinder our sector?
What is most important to the hospitality industry is having a vibrant economy with our customers having plenty of discretionary income to spend. The last seven or eight years have delivered a strong economy. However Government’s focus on wealth redistribution has reduced the potential spend of our key customer demographic. The industry’s best customers tend to be those that are single, couples without children or those whose children have left home. None of these demographic groups have been significant beneficiaries of Labour’s moves to support the family unit over the last nine years. Working for Families supports a segment of New Zealand society which is not a big spender in hospitality. Government measures such as KiwiSaver might be good for New Zealand, but it has further reduced the available dollar.
This was not such a big factor when the economy was vibrant and growing. As the discretionary dollar has been further squeezed through increases in fuel, energy and food costs, so too have hospitality businesses started to feel the same squeeze.
For this reason the industry will welcome this year’s tax cuts for putting some extra cash into their customers’ pockets. These cuts may have been small and may have been a long time coming but they are an important start. Rather than call this the “Colby cheese” budget, the hospitality industry could well talk about it as the budget that delivered a round of drinks for two. It is promising that this year’s election will be fought on the issue of tax cuts, as there is no doubt that the biggest single measure government can take to assist the hospitality industry is immediate and significant tax cuts for our key customers.
Bruce H Robertson
Chief Executive
Hospitality Association of NZ
26 May 2008 |
