Restaurant News

“Hopefully it won’t all go to McDonald's”: operators express cautious optimism about NSW restaurant vouchers scheme

The state government’s plan to offer $100 vouchers to spend at dining and entertainment venues is welcomed by restaurant operators, but questions are being raised about its long-term effects.

By Yvonne C Lam
O Tama Carey, chef-owner of Lankan Filling Station
In a bid to stimulate the embattled dining and entertainment sectors, 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.
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.

What do we know so far?

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 vouchers can be spent on food at restaurants, cafés, clubs and other food service venues, and two vouchers can be used for entertainment activities at cultural institutions, performing arts venues, cinemas and amusement parks.
There are caveats. The vouchers cannot be combined – for example, the two $25 dining vouchers can't be combined into 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 spent on general retail items, 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 key part of the state budget, announced today.
NSW Premier Gladys Berejiklian speaks during a press conference on October 7, 2020 in Sydney. Photo: Getty

“It’s better than nothing”

Ho Jiak's Junda Khoo has two restaurants in the CBD – one in Chinatown, and one near the Town Hall precinct. He says vouchers won't fix all the problems currently plaguing the hospitality industry, but will lend a helping hand to restaurants that are struggling in the once-bustling business district.
"It's better than nothing. It's an incentive for people to come to the CBD and dine out which is what we need," he says.

Ho Jiak chef and co-owner Junda Khoo.
At Pablo & Rusty's café in the CBD, co-owner Chris Tate says the scheme will "absolutely" encourage more customers to walk through the door, supported by the gradual return of office workers to the business precinct.
Even pre-COVID, Pablo & Rusty's embraced contactless ordering technology. And just before lockdown hit, it was one of the first cafés in Sydney to ban reusable cups for safety and hygiene reasons. (The café now accepts reusable cups.)
Tate says the business's agility with point-of-sale technology, and its ability to make quick operational changes in light of the pandemic, means he'll gladly participate in the voucher trial and beyond.
"We'd certainly be happy to work with the government on the trial period to test and iterate [the vouchers]... And if there's the opportunity to put ourselves forward as a COVID-safe venue [to participate further in the program], we will."

How effective will the vouchers be?

O Tama Carey, chef-owner of Lankan Filling Station in East Sydney, thinks the scheme is not designed to help small businesses on a granular level. Rather, she acknowledges there is a "bigger picture" to boost spending across the state.
"We won't suddenly see a big difference in our weekly revenue, but we shouldn't look at it in terms of that," she says. "It's about getting people to do more stuff outside, and anything that encourages a sense of normality is going to be a good thing."
But with a maximum spend of $25 per dining voucher, it's cafés and mid-priced restaurants that stand to benefit the most.
"Of course people love this idea of perceived 'free stuff', and if you want to get a 'free meal' you'll be looking at a cheaper place," says restaurateur Yen Trinh.
Trinh co-owns Pipit in Pottsville, a small town located in the Northern Rivers region. The short set menu there is priced at $75 per person. "Twenty-five dollars doesn't cover a full Pipit meal," she says.
With the relaxation of lockdown restrictions in NSW, the restaurant has seen an uptick in diners from across the state. But Trinh doesn't think a voucher in and of itself will encourage travellers to head to the restaurant. "The $25 incentive doesn't change how I'll behave. I don't think it'll make me travel somewhere else."
Pipit co-owners Yen Trinh and Ben Devlin with baby Penny. Photo: Russell Shakespeare

Concerns about the logistics

There are questions about how exactly the program will work. Vouchers can't be spent on alcohol, which could potentially cause administrative and point-of-sale difficulties for venues like Bart Jr in Redfern, where wine forms a core part of its offering.
"In terms of separation of alcohol and food content, it'll possibly be a little difficult," says co-owner Anne Cooper. "There's not much information on that yet."
Trinh speculates the voucher system will work similarly to the state government's Creative Kids program. Through Service NSW, parents can apply for a $100 voucher to be used for their child's participation in activities such as music, visual arts and dance. They pass their voucher number to service providers, who then redeem their vouchers online.
But questions remain about which restaurants will be eligible to participate. "Is it every restaurant? Is it some?" Like JobKeeper, will restaurants' eligibility be based on revenue? "It's hard to know," she says.

The bar with no vouchers

Notably, the voucher scheme doesn't extend to bars. Despite this, PS40 bar owner Michael Chiem holds no hard feelings.
"I don't feel like we're getting jipped. If they did offer it to bars, people would only go to bars, because free booze is much better than free food in a lot of people's eyes," he says. "It could get out of hand."
Like Carey, he recognises the scheme is meant to encourage people to get out and about, particularly in the CBD. And more people in city restaurants just might mean more patrons kicking on for a drink or two. "Hopefully there's a knock-on effect."

Vouchers are no silver bullet

Vouchers are no remedy for density limits, currently the biggest operational issue facing restaurants and cafés. For indoor dining, venues allow four square-metres per diner – a rule that's been in place since June 1. For outdoor dining, the two square-metre rule applies.
"We can only do 50 per cent of what we normally do pre-COVID. So even with all these incentives coming in, our restaurant is still full at 50 per cent capacity," says Junda Khoo. "We've been operating [like this] for the past six months."
For Anne Cooper, it's longer-term measures like JobKeeper, and relaxed restrictions on outdoor dining, that have kept her business afloat. She says the voucher system is a "good-hearted scheme", but it might provide little lasting benefit to the hospitality industry. "I'm not aware of what consultation they did, but it does feel a little bit superficial."
She's right to feel sceptical. The UK government spent some £500 million on its much heralded "eat out to help out" scheme which subsidised diners' restaurant and pub meals throughout August. However, the British Chambers of Commerce recently reported the scheme had a "fairly marginal" impact on the sector as a whole.
But however short and sharp the cash injection, there's hope that it's funnelled to the businesses that need it the most. "$500 million is a lot of money," says O Tama Carey. "Hopefully it won't all go to McDonald's."
This story was first published on November 17, 8.18am, and was updated on November 17, 2.47pm