Western Australia's hospitality sector has issued a stark warning that proposed cuts to net overseas migration could devastate local pubs, restaurants, and hotels, potentially leading to reduced trading hours and diminished services for customers.
Industry concerns over migration cap
The industry is deeply concerned that the Coalition's hard-line stance on migration will exacerbate workforce pressures for hospitality businesses already grappling with labour shortages and rising operating costs. In his response to the Federal Budget last month, Liberal Leader Angus Taylor outlined a plan to cap net overseas migration at the number of new homes completed in Australia, vowing to implement one of the most significant reductions in immigration in the nation's history.
Impact on workforce and operations
Bradley Woods, chief executive of the Australian Hotels Association WA, argued that there are alternative levers to increase housing supply, such as transitioning homes from short-term accommodations back into the long-term rental market. He highlighted the nearly 10,000 homes listed on Airbnb across WA.
"We have no control or influence over housing completions, so why make our industry suffer?" Mr Woods said. "If businesses cannot access enough workers, it can lead to reduced trading hours, reduced services, and delayed investment. It is important that housing policy also recognises the workforce needs of industries like hospitality and tourism."
Last month, a Senate inquiry revealed that approximately 40 per cent of the workforce in the Australian Hotels Association and Accommodation Australia were on some form of visa. In some venues, this figure can be as high as 75 per cent of staff.
Mr Woods emphasised that hospitality and accommodation are among Australia's largest employing industries, supporting nearly one million jobs nationally and 100,000 in WA. "Hospitality has always been a major employer of young Australians, but access to international labour has become increasingly important to maintain normal operating hours and service levels," he said. "In regional and remote WA, migrant workers, particularly working holiday makers, fill essential roles that would otherwise not be filled by locals."
Accommodation sector warns of adverse effects
James Goodwin, chief executive of Accommodation Australia, stated that Mr Taylor's policy would "adversely" impact the sector, which relies on migration for roles including chefs, housekeeping, general managers, and accountants. "This is going to reduce our capacity, how many rooms could be offered, or it would also stop longer-term investment in the economy," he said. "If you need to open a new hotel or do major refurbishment, if you are not confident that you can staff that property, then you’re unlikely to go ahead with that development."
Mr Goodwin called for a separate hotel industry labour agreement to exclude the sector from migration caps if the Opposition proceeds with such policies.
Capital gains tax overhaul adds to concerns
The hospitality sector also criticised Treasurer Jim Chalmers' capital gains tax overhaul, which would scrap the 50 per cent discount and impose a minimum 30 per cent tax on gains from selling shares and business assets. There are fears that owners who took financial risks to revitalise pubs or keep hotels open will face materially higher taxes when they retire, refinance, or pass the business to the next generation.
"Measures that make people nervous about investing or about what their household income is going to be certainly reduces the sentiment for people to have the confidence to travel and stay in our properties," Mr Goodwin said.
Mr Woods noted that hospitality is a highly capital-intensive industry, with operators continually investing in venue upgrades, accommodation assets, equipment, and new infrastructure to remain competitive. "There is also concern about the impact on expansion, succession planning, and the ability for small and medium or family-owned businesses to transition and continue investing in the sector," he said.
