SAWDAY, Mr Simon, Manager of Policy and Government, Clubs Australia [by video link]

TRIMARCHI, Mr Anthony, Executive Manager of Policy and Government, Clubs Australia [by video link]

[09:39]

CHAIR: I now call representatives of Clubs Australia to give evidence. Although the committee doesn't require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings in the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. I now invite you to make a brief opening statement before we proceed to discussion.

Mr Sawday : On behalf of Clubs Australia, I thank the committee for inviting us to appear in this public hearing today. We are grateful for the opportunity to contribute to this inquiry. There are approximately 6,400 registered and licensed clubs in Australia, spread across every state and territory, across regional and metropolitan areas, in almost every community. Clubs are not-for-profit member owned businesses who make substantial economic and social contributions to their communities.

Last year, 2020, was a year of unprecedented challenges for the club industry. In particular, the COVID-19 pandemic and the shutdown of hospitality venues created the largest business disruption event in the industry's history. During the shutdown, clubs across Australia stood down approximately 100,000 of their 130,000 employees and relied on JobKeeper payments, deferred taxes and special safe-harbour laws to avoid permanent closure. Thankfully, clubs have been able to survive the worst impacts of the pandemic, and, since reopening, they have progressively brought back the stood-down employees to meet the increasing demand for hospitality services, which has been a gradual and volatile path. As the recent outbreaks in Victoria and New South Wales demonstrate, COVID-19 remains capable of devastating the industry. Outbreaks of the virus cause sharp and severe financial impacts, as consumer confidence takes a hit, people avoid going to hospitality venues and clubs are forced to throw out food and stand down their staff.

Given the disproportionate impacts of COVID-19 outbreaks, it is vital that clubs have the opportunity to trade at full capacity while community transmission is contained, to offset losses and remain liquid. However, chronic labour shortages of chefs and cooks have continually prevented clubs from operating at full capacity. This is because clubs, like other hospitality businesses, are reliant on temporary migrants to work as chefs and cooks, and the pandemic's disproportionate impact on temporary migrants is exacerbating the problem.

A survey of 157 licensed clubs in New South Wales conducted in April 2021 reveals the scale and impacts of these labour shortages on the sector. Ninety-four per cent of clubs reported a skill shortage for club occupations, 84 per cent of clubs reported a shortage of chefs, 72 per cent of clubs reported a shortage of cooks and 77 per cent have experienced negative impacts as a result of the skill shortage, and, concerningly, almost half have been required to cease or scale back their kitchen operations.

Among those is Corowa RSL Club, located on the bank of the Murray River on the border between New South Wales and Victoria. The club has been heavily impacted by border closures, since the club is in New South Wales but a large percentage of customers and employees live in Victoria. Due to shortages of kitchen staff, particularly chefs, the club's ability to recover is under threat. The club is now closed on Mondays and has been required to reduce the number of patrons it can cater for on Friday and Saturday nights from 500 to 200.

Clubs Australia welcome the committee's interim report, and we note that a number of the recommendations will go some way towards addressing skill shortages for chefs and cooks in the short term. In particular, the inclusion of chefs on the Priority Migration Skilled Occupation List is essential for our industry's recovery, and Clubs Australia welcomes the government's decision to accept this recommendation earlier this week.

To ensure the visa system helps the industry to withstand the ongoing impacts of COVID-19 and ultimately recover, it is also essential to make further temporary and permanent changes to the legislative and administrative settings of the skilled migration program.

For instance, cooks are essential for the running of most clubs, and they are commonly sourced from overseas. However, cooks working in Australia on the subclass 482 visa can stay for a maximum of two years and have no path to residency, which undermines the attractiveness of Australia as a destination for skilled cooks. Giving cooks a pathway to residency will give our industry an important boost as clubs seek to operate at full capacity. Moreover, with 72 per cent of clubs reporting a shortage of cooks, by including cooks on the Priority Migration Skilled Occupation List, the government will strengthen the opportunities for clubs to source cooks and suitably staff their kitchens.

As outlined in our submission, the cost in time of sponsoring an overseas worker provide a strong incentive for clubs to hire Australian workers. Accordingly, it stands to reason that clubs who seek out overseas workers have already made every attempt to access local workers. It is therefore unnecessary to impose additional labour market testing requirements, and Clubs Australia recommends all LMT requirements be removed.

In seeking feedback from clubs, it became evident that the complexity of the system compels clubs to contract professional migration consultants to access the skilled migration program. Reforms are also necessary to remove unnecessary red tape and make the system more accessible for clubs. We support measures that would make the system more simple and transparent so clubs can access the system themselves rather than relying on costly services.

In closing, we thank the committee once more for considering the club industry's views and we look forward to your questions.

CHAIR: Thank you very much for your submission and your opening statement. I want to come to the issue you've just raised about labour market testing, particularly for chefs and cooks. You've probably seen that, in the interim report, we made a recommendation that labour market testing be suspended during the COVID-19 period. Are you suggesting that we should actually suspend it longer term?

Mr Sawday : Yes, that's right. Our view is that the time it takes to process and sponsor an overseas worker would mean that no club would ever seek to access the skilled migration program unless there was a dire need to do so. If there is an Australian worker available for a position, the club already has the commercial incentive to hire that local worker. Typically, when clubs identify that they need another employee, they need the employee relatively shortly, which is another incentive to hire an Australian worker. Our view is that an additional incentive to hire Australian workers is not necessary when that incentive already exists.

CHAIR: The figures that you've put in your submission here are very dire about the shortages: 94 percent of clubs reporting skills shortages for their occupations, 84 per cent for chefs—and you've noted the changes to the PMSOL—72 for cooks, and so on. Do you have a metro versus regional breakdown of those shortages? Can you tell us how much more acute or otherwise the shortages may be in regional areas?

Mr Sawday : Yes. I don't have it in front of me. I can take on notice the exact breakdown between metro and regional areas. We do have that data. But, from reviewing the data, it was generally consistent across metro and regional New South Wales. There were some differences between different regions. For instance, the Riverina region of New South Wales had a slightly higher proportion of clubs reporting skill shortages. But I can take on notice that breakdown between regional and metro areas and we can send that to the committee.

CHAIR: Thank you. I want to know if you have any suggestions as to measures that could be adopted to make it easier for regional employers to attract chefs and cooks.

Mr Sawday : On the measures that we would use, I guess on the one hand we think that strengthening the system and making it easier for employers to sponsor overseas workers would help clubs in regional areas access that program and hire chefs and cooks. The other recommendation we made was around giving cooks a pathway to residency and that would also help. So, essentially, strengthening the system as a whole will help bring employees to regional clubs. In terms of other specific measures, we don't have a specific position on what those would be. But, in principle, we would support any measures which incentivised or strengthened the prospects of overseas workers being able to work in regional areas.

CHAIR: Ideas such as increasing the age limit, reducing the English language requirements, reducing perhaps the experience requirement of working in the particular field, are they all things that you would support?

Mr Sawday : Yes, we would support those.

CHAIR: One of your members raised an issue about remuneration for suitably qualified chefs, and according to their feedback increasing chefs wages will diminish industry profitability and low remuneration may lead to hiring unqualified chefs and undermine productivity. What steps can be taken to strike the balance in order to attract more qualified chefs? What other recommendations would you make for more incentives for the clubs to attract qualified chefs?

Mr Sawday : Thanks for the question. The profit margins on food are traditionally already very low. There are some clubs that are losing money on food, for instance, while other clubs will have a zero to five percent profit margin on food. The aggregate economic effect of the skills shortage and I guess the rise in wages for chefs and cooks means that clubs are relatively constrained in what they can offer. In terms of extra incentive to bring qualified chefs and cooks, once again, I'd say that the solution is a higher-level, broader resolution of the skills shortage, which would bring wages down and would enable clubs to bring in chefs.

CHAIR: Let me ask you about the use of the TSS. What feedback have you had from your membership on the use of the TSS for chefs and cooks? Would a pathway to permanency make those visas more attractive and useful to your industry?

Mr Sawday : Yes, the feedback we've had from our members is that a pathway to residency would make the prospect of a chef or a cook coming to Australia much more attractive. For a person to come from overseas to Australia for two years and potentially bring their family over with the knowledge that they would be returning to their home country after two years, sending their children to school for two years, is not an attractive proposition for overseas workers. On the one hand, the feedback is that temporary migration is not the solution to resolving the industry's skills shortages. On the other hand, the feedback we've received from our members is that the system is difficult to access and, because it's difficult to access, they are deterred from paying a consultant, for instance, to access the system. The feedback I got from one club in the eastern suburbs of Sydney is that he identified that he needed a couple of chefs prior to a peak period, and it took that club 11 months from the time that he identified that need to the time that an overseas worker on a TSS actually started working in the club. There is also a mismatch between identifying the need for an additional worker or additional labour and actually having that person working in the club. That time—those high processing times—doesn't reflect the actual practical reality of running and planning workforce needs.

CHAIR: Thank you very much. Deputy Chair, would you like to ask any questions of the witness?

Ms VAMVAKINOU: No, not at this stage. Thank you.

CHAIR: Mr Alexander?

Mr ALEXANDER: Yes. Thank you, Chair. Again, I go to the situation where a trend has been developing regarding the shortage of chefs and cooks and we are reacting rather than anticipating the development of a problem and being a little bit more proactive. Would that be a fair characterisation?

Mr Sawday : Probably what we haven't outlined as much in our submission is that this issue has been present in our industry for a decade and that it has been exacerbated recently. Our view is, on the one hand, that temporary changes are necessary to improve the system in the short term and to help the industry withstand the impacts of the pandemic but also that there has been a need for some time, as I noted in the opening statement, to improve the legislative and administrative settings of the system.

Mr ALEXANDER: I can understand that. Would there be an opportunity to bring in relatively low-skilled people and, within your organisation, engage them in upskilling programs—to have a sort of cradle-to grave-career path—and keep them within your industry? This would broaden our opportunity to bring in more semiskilled, low-skilled immigrants and have them grow under your umbrella. Would that be something that we should be looking at?

Mr Sawday : Yes, I think training is certainly one of the many solutions to this problem. In ClubsNSW, we recently signed a memorandum of understanding with Training Services NSW. In that understanding, there is a commitment for the industry to work with RTOs, particularly TAFE, to train, in this case, jobseekers—unemployed people—to instil in them the skills to be able to, for instance, work behind a bar and work in jobs that probably aren't considered skilled occupations but are nonetheless necessary. I'm consciousness this is probably slightly outside the scope of the inquiry, but clubs are also experiencing skills shortages for bar attendants and other jobs that may have traditionally been filled by international students or working holiday-makers. As we're pursuing in New South Wales, we think training plays a key role in resolving that.

Mr ALEXANDER: Thank you, Chair. That's all from me.

CHAIR: Thank you for your attendance here today. If we've got any further questions, we'll to put them to you in writing. I know you've said you'll come back to us with some material. Could you do so by 9 July. You'll be sent a copy of your transcript of evidence and will have an opportunity to request corrections to transcription errors. Thanks very much for your attendance here today.