“We need more help for hospitality – not increased costs,” general manager of the Australian Hotels Association (AHA) ACT Chris Gatfield says. Photo: Michelle Kroll.
Canberra businesses due to join an expanded Portable Long Service Leave Scheme on 1 April have been given more time to register in recognition of the tough economic conditions they are facing.
With the scheme’s expansion on hold until 1 July 2026, services industry business in accommodation, food, hairdressing and beauty will now have another 15 months to register.
Registered employers are required under the scheme to pay a levy of 1.07 per cent of an employee’s wage to finance their long service leave.
Industry groups have welcomed the temporary reprieve but the Canberra Business Chamber, which has always opposed a portable scheme, called for a rethink.
Minister for Business, Arts and Creative Industries Michael Pettersson said it was important that hospitality and other businesses were supported during these challenging times.
“We know the hospitality sector is under pressure,” Mr Pettersson said. “A new report has showed that nationally, 9.3 per cent of hospitality businesses closed in the 12 months to February 2025. Sadly, we have recently seen much-loved Canberra hospitality businesses close their doors.”
Mr Pettersson said businesses could obtain further support over the next 15 months from the ACT Long Service Leave Authority to register and transition to the Portable Long Service Leave Scheme.
He said local businesses had told him that starting the scheme at the beginning of the financial year would make it easier to transition to a business-ready position.
“Portable Long Service Leave is an important initiative for employers and employees. Business processes are simplified and liability for long service leave will no longer be held by individual businesses,” he said.
“The scheme also ensures workers aren’t unfairly impacted by the casual and insecure nature of their employment by guaranteeing access to the benefits of long service leave across their industry.
“Long service leave should be an entitlement for every worker.”
New employers entering the services industry scheme will need to be registered by 30 June 2026.
The expanded Portable Long Service Leave Scheme will include the hair and beauty sector. Photo: Lindsay Cash.
Industry groups have welcomed the temporary reprieve.
Canberra Business Chamber chief executive Greg Harford said Mr Pettersson’s decision was the right call but he pressed for a complete review of the portable long service leave proposal.
Mr Harford said the chamber believed the proposal would only add to the burden of small businesses and was not justified.
“Employees in the food, hospitality, accommodation, hair and beauty sectors are already covered by long service leave requirements,” he said. “But the government had planned to make this leave ‘portable’ and fund it through what amounted to a tax on wages in the sector.”
Mr Harford said the proposal was bad policy and came at almost the worst possible time for the services sector with 11 per cent of hospitality businesses nationally at risk of closure.
“It would have been administratively burdensome for businesses, inflated the costs of doing business, and almost certainly would have meant consumers were paying more for coffee, food and haircuts,” he said.
“Additionally, given the transient nature of the industry, the majority of employees would never have benefitted from the scheme, while the ACT Government pocketed the proceeds.”
Mr Harford said the chamber supported the concept of long service leave but called for complete review of the proposal to ensure it would not lead to unanticipated poor outcomes for customers and businesses.
General manager of the Australian Hotels Association (AHA) ACT Chris Gatfield said delaying the scheme would help hotels struggling to cope with cost-of-living pressures.
He said the scheme would place a levy on all wages paid by pubs, hotels and bars at a time they could least afford it.
“We are facing tough times in the hospitality industry with cost-of-living pressures affecting both patrons and hospitality business owners alike,” Mr Gatfield said.
“Venues in Canberra are struggling to stay open and some have already closed down. At this point, we need more help for hospitality – not increased costs.”
He said the industry was keen to work with government over the year ahead to ensure the scheme was ready to go and was fit for purpose.
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