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Patrons will be up for extra $63m a year

Patrons will be up for extra $63m a year, says Hospitality Association President

Proposed legislation will result in $63 million being added to current operating costs for the hospitality industry, which will have to be passed on to the consumer.

This message estimating additional upcoming costs was delivered to the annual conference of the Hospitality Association of New Zealand at its 101st meeting in Christchurch this morning.

The association’s president, Bill McLean, said the estimated cost to the industry of $12 million for extra wages for statutory holidays; $35 million covering the extra week of annual leave being proposed and $16 million for accumulated sick leave cannot be absorbed by operators and consumers will end up paying for it.

“It’s no wonder that there’s been little movement in employee remuneration over the past couple of years, as businesses struggle to absorb Government-imposed costs,” he said.

Mr McLean said that the impending introduction of mandatory time-and-a-half on statutory holidays (additional to the day in lieu employees get), the industry will have no choice but to apply statutory day surcharges … not to increase profitability, but to simply stand still.

He said that the extra week of annual leave being proposed could be the catalyst for some hotels and taverns having to close.

“Margins are already too slender and adding the burden of funding additional employees will simply be too much for some operators to meet and additional staff to cover the extra annual leave would be too much for some operators,” he said.

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