In a bid to resurrect some of the sectors hit hardest by COVID-19, the New South Wales government is set to offer $100 vouchers for adults in the state to spend at restaurants, cafés, clubs, cinemas and performing arts venues.
The NSW budget vouchers are set to boost the whole economy. Restaurateurs and café owners have expressed cautious optimism at the proposed scheme, saying it’s an overall positive step to stimulate spending in the hospitality industry. But they have questions about how exactly the program will roll out, and how effective it will be in boosting individual businesses on a long-term basis.
About the scheme
Under the Out and About scheme, anyone over the age of 18 can claim four vouchers, worth $25 each, through the Service NSW mobile app.
Two of the four vouchers can be spent on food at restaurants, cafés, clubs and other food service venues, with the remaining two vouchers being used for entertainment activities at cultural institutions, performing arts venues, cinemas and amusement parks.
There are caveats though.
In a deliberate bid to get people to spend more and return to a business, the vouchers also cannot be combined, such as using two $25 dining vouchers to make a single $50 transaction. Each voucher can only be used once, so if the spend is less than $25, the remaining balance on the voucher will expire.
Additionally, the vouchers cannot be used for retail or on products such as alcohol, gambling and cigarettes.
But the scheme isn’t live just yet. A trial will run in the Sydney CBD in December, with the full program to be launched in early 2021.
The scheme will be administered through Service NSW. Businesses must register to be part of the voucher system, and must also be registered as COVID-safe venues to participate.
The state government is considering limiting voucher use to quieter days in the week, such as Mondays to Thursdays.
The voucher system is projected to cost the NSW government $500 million, and forms a crucial part of the state budget, announced yesterday.
Restaurateurs and café owners are in agreeance that vouchers won’t fix all the problems currently plaguing the hospitality industry, but will lend a helping hand to establishments that are struggling in the once-bustling business district.
Ho Jiak’s Junda Khoo who own’s two restaurants in Sydney’s CBD, said “It’s better than nothing. It’s an incentive for people to come to the CBD and dine out, which is what we need.”
How effective will the voucher be?
Although the scheme is not designed to help small businesses on a granular level, there is a bigger picture insight to boost spending across the state.
Owners should be aware that they won’t suddenly see a big difference in weekly revenue. It’s more about creating and encouraging a sense of normality around, which can only be a good thing for the future of the industry.
Concerns about the strategy
There are questions about how exactly the program will work. With a maximum spend of $25 per dining voucher, it’s cafés and mid-priced restaurants that stand to benefit the most. People love the idea of a free meal, so they will be looking at cheaper places to go. In some of the more expensive establishments, $25 would not go very far when paying for the bill at the end of the meal. These are the venues that may be missing out.
Also, vouchers can’t be spent on alcohol, which could potentially cause administrative and point-of-sale difficulties for venues, and especially for those where alcohol forms a core part of its offering.
The biggest questions remain about which restaurants will be eligible to participate.
Is it every restaurant? Is it only some? Like JobKeeper, will a restaurants’ eligibility be based on revenue?
It’s hard to know right now.
All in all, 500 million dollars is a lot of money being injected into the economy, funnelled to the industry that needs it the most.