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Melbourne City Council Reintroduces Outdoor Dining Fees for Venues

The changes come into effect from November. Here's what you need to know.

Melbourne City Council has moved to reintroduce outdoor dining fees for CBD restaurants. The decision was reached following a unanimous vote.

After the first Covid-19 lockdown, hundreds of businesses signed up for free permits to establish outdoor dining on footpaths, in laneways and on street-side car parks after the council began waiving fees in late 2020.

Now that Covid restrictions are all but gone, restaurants will be required to pay $278 per square meter, per annum from November 1. This means that for one parking space (or parklet) – which is 16.7 square meters on average – businesses will be set back more than $4600 per year.

Councillor (Cr) Roshena Campbell moved the motion saying changes were made on the basis that CBD trade is returning to a post-Covid normal.

“When the City of Melbourne waived dining fees and hospitality venues were subject to crippling Covid restrictions, there were density limits that made trade not viable for many of them. Those Covid shackles are off, so it's the right time to reintroduce fees.”

Cr Campbell is confident that this is the right time for the change given the positive signs in the city’s economic recovery.

“Pedestrian traffic in the evenings and weekends is often at pre-Covid levels, sometimes exceeding it. We've had 167 new hospitality businesses open this year and retail spending is increasing,” she says.

Cr Campbell also notes that out of all hospitality businesses in the CBD, only one third can engage in outdoor dining.

“It comes down to a question of fairness. If we continue to waive fees indefinitely, that's not fair to the two-thirds of hospitality businesses that don't have the extra tables and the extra diners that you get from an outdoor dining space.”

For those businesses struggling with the new fees, Cr Campbell says the council has a plan and that operators can apply for a financial hardship discount.

“There will be a 50 per cent discount for parklets and the option to defer payments, which means businesses get the benefit of summer trading, but they don't have to pay the fee until after that period,” she says.

Docklands venues are not being asked to pay the same fees, with their phase of payments to be reintroduced in June 2023.

“Docklands is one area that has been slower to benefit from those positive signs of economic recovery, and that's why the complete fee waiver will extend for a longer period,” Campbell says.

Kim Berkers, General Manager of CBD restaurant Longrain, says the venue is weighing up whether to remove the outdoor dining area in light of the new fees.

“We haven't made a decision yet actually, we’ve only managed to have a brief conversation about it so far, but it's something that we'll have to consider”, she said.

When they cost of running a business increases, it’s often consumers who foot the bill. Berkers says she doesn’t expect businesses to pass the increase onto punters due to the increasing cost of living and consumers already reaching the limit that they’ll pay for dining out.

“There's only so much people are willing to pay for a meal, and in addition to staff shortages and supply costs of goods increasing it’s a struggle for our industry.”

Photography: Pete Dillon

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