EXCLUSIVE: Melbourne’s Loss, America’s Gain: Rising Costs, Taxes Forces Aussie Cafe Owner to Set up Shop in Texas

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The cafe owner said that in Australia, no one wants to work, the wages are too high, and employees get too many entitlements.

Zee Lalani, a 37-year-old immigrant from Pakistan, sought a better life for his family when he bought a cafe in the humble suburb of Lower Plenty in Melbourne, Australia almost five years ago.

Business was going well for the passionate coffee maker—who would often churn anywhere from 500 to 1,000 coffees per day—but the pandemic, lower customer spending, as well as increasing taxes and stringent employee entitlements, have diminished his ambitions to grow and expand.

“I love my industry, I love what I do, I enjoy my work, and I love my customers, but the reason I am moving is because there is no way I can find a way to grow,” Mr. Lalani told The Epoch Times.

Zee Lalani, former owner of Charlie and Leo's Cafe in Lower Plenty, Melbourne, Australia poses for a photo at his shopfront on Dec. 24, 2023. (Henry Jom/The Epoch Times)
Zee Lalani, former owner of Charlie and Leo’s Cafe in Lower Plenty, Melbourne, Australia poses for a photo at his shopfront on Dec. 24, 2023. (Henry Jom/The Epoch Times)

“The business has done very well over the past four years. But in recent times, it has changed a lot, which made me decide to make a move and do business in another country.”

Mr. Lalani owned Charlie and Leo’s, a cafe he describes as “the hype of Lower Plenty.”

Every weekend was “crazy busy,” he said, but these days he just hopes it is busy enough to cover the running costs.

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It was only through Mr. Lalani’s own work ethic, the desire to support his family, and a passion for coffeemaking that has kept him afloat during and after the pandemic.

Meanwhile, similar businesses have moved to significantly reduce overhead costs, or fold entirely.

“A new twist happened [since the pandemic], new taxes came in, new laws came in, new expenses came in, things started getting more and more expensive,” said the business owner.

Businesses Footing the Bill for Government Spending

He listed several additional outgoings, including the state government’s COVID tax levy, the 50 percent increase in gas and electricity prices, and the 50 percent increase in insurance premiums.

The COVID debt levy, for instance, is expected to bring in $31.5 billion in revenue for the state, which will be used to pay down the state’s pandemic measures, or what the Victorian government describes as “one-off investments” that were “designed to protect Victorians and Victorian businesses throughout the pandemic.”

Moreover, the state government has defended the tax as “temporary, targeted, and, above all, responsible.”

However, Opposition Liberal Leader John Pesutto has criticised the tax as “completely miscalculated,” saying that it will affect all Victorians, from nurses to paramedics and from tradies to businesses.

Mr. Lalani also commented on the state government’s North East link infrastructure project, which recently blew out to $26 million after being budgeted at $10 billion previously.

“Rather going more utilised in a proper way where it needs to be used, why do we have to blow up the money in the North East link where it can be utilised on the police force, and other sectors?” he said.

“At the end of the day the money is not there in the system, somebody has to pay for that money. What will come out of this? We’re going to forward it over to businesses, we’re going to have to forward it to someone.”

Chamber of Commerce Says Next Budget Must Help Businesses Thrive

In a statement to The Epoch Times, acting Victorian Chamber of Commerce and Industry (VCCI) Chief Executive Chanelle Pearson said there is “no doubt” that the current economic headwinds are a key contributor to the stress felt by Victorian business owners and operators.

“The imposed financial burdens are undeniably pressuring enterprises, hindering their ability to thrive in an already complex economic climate and the Victorian Chamber has consistently maintained that Victoria’s debt level must be reduced, but not at the cost of future investment.

“Rising inflation and the end of COVID-era subsidies has contributed to the increase in business closures as we witness a rise in those succumbing to these formidable challenges, as well as a shift in consumer spending patterns, presenting additional hurdles for businesses navigating these uncharted waters.”

Ms. Pearson said the VCCI is advocating for Victoria to remain “the best place in Australia” to “learn, work, and own and operate a business” by urging the Labor state government to address the high costs of doing business at the next state budget.

“Victoria’s economy is at a critical juncture, and the Chamber emphasises the urgency for collaborative efforts between the state government and business to mitigate these adverse effects.”

This comes after Australian Business Statistics (ABS) data showed that 7,606 businesses were de-registered from Victoria over the 2022-23 financial year, while all other Australian states and territories showed an increase over the same period.

The state’s minister for small business has been approached for comment.

Too Much Emphasis on Employees Over Employers

When comparing business opportunities in various countries, Mr. Lalani said Australia has several unique characteristics.

“When I started travelling to other countries, like America, Canada, England, Bali, Vietnam, Pakistan, and India, I found that Australia is the only country where the employee has a lot of entitlements. Entitlements are over the roof here,” he said.

He said employees are “given too much power,” where they are “taking advantage of the workplaces.”

“All the employers have a common problem,” he said. “Nobody wants to work; nobody likes to work; the wages are too high; and there are too many entitlements.”

He said that telling employees about their job performance is another tricky area, especially if they are underperforming, and business owners have to contend with the threat of being taken to the Fair Work Commission.

At the same time, he said hiring could cost his small shop anywhere between $60,000 (US$40,000) and $110,000 per year.

“And that’s even on the limit of 40 hours a week,” he explained.

“My shop operates between 50 to 60 hours a week. The system doesn’t allow us that flexibility where we can have that room to go anywhere else and do things.”

Zee Lalani, former owner of Charlie and Leo's Cafe in Melbourne, Australia speaks to his son while making coffee on Dec. 24, 2023. (Henry Jom/The Epoch Times)
Zee Lalani, former owner of Charlie and Leo’s Cafe in Melbourne, Australia speaks to his son while making coffee on Dec. 24, 2023. (Henry Jom/The Epoch Times)

Additionally, the business owner explained that enhancing the workplace for employees, though necessary, may not necessarily translate to business success.

“The most important thing to enhance the business, to enhance the economy, is the businessman. It’s not the employees—that’s what I realised,” he said.

A Rising Tide Floats All Ships

Mr. Lalani said that if he sells more coffee, he’ll be buying more milk, which will give the milkman more business.

“And then there’s the packaging involved with milk, so it’s the circle of life. One person is dependent on the other,” he said, adding that even the sale of fresh sandwiches benefits the sellers, producers, and chef.

“Everything is interconnected.”

“The more the businesses, the more the economy will grow. The less the business, the more the economy is going to collapse. A lot of things are not in favour of businesses anymore.

He said that if there are more businesses, more taxes will naturally flow to the government.

“Those taxes will go towards the infrastructure of any state. Employees wouldn’t bring in as many taxes as businesses can.”

Inflation Forcing Customers to Spend Less

While his cafe has been operating in a positive cycle, customers are spending less due to inflation, Mr. Lalani observed.

“I have noticed on many occasions customers ordering the cheapest item on the menu,” he said.

“Instead of spending money on food, I have customers who have two cups of tea, or two cups of coffee, rather than having food and coffee.”

This behaviour will likely have ramifications across the board.

“What happens at the end of the day is that employers are going to be stressed out paying overheads, and they are going to cut down more and more and more—and it goes towards low service, cutting down on staff because they are going to cut down on spending,” he said.

“They’re going to cut down on food costs, alternate their food costs from fresh to frozen, to try any other alternate, which will affect the service, which will affect the food.

Public Holiday Surcharges Also Weighing Down Business

Mr. Lalani said that in Texas, which is where he and his family will be relocating to, both taxes and wages were more favourable to businesses, and the “tip system” was an incentive for workers.

“Businesses can afford to keep it open on weekends and public holidays because the wage system is entirely different over there than here, or anywhere else in the world,” he said.

Comparatively, he said that the 20-25 percent surcharge for customers on weekends and public holidays in Australia was not an incentive for customers to dine out locally.

“On public holidays, more businesses in Melbourne are shutting down than being open because it’s not worth of them,” he said.

“The amount of foot traffic and turnover is not feasible for them. The rents are too high, the foot traffic is not enough—the restrictions are there.”

“Public holidays get quieter, holidays gets quieter, January gets quieter.

“If there’s too much rain it gets quieter, if it’s too sunny it gets quieter.

“In all these scenarios, why would anyone do business?”

Zee Lalani, former owner of Charlie and Leo's Cafe in Melbourne, Australia speaks to customers at the shopfront on Dec. 24, 2023. (Henry Jom/The Epoch Times)
Zee Lalani, former owner of Charlie and Leo’s Cafe in Melbourne, Australia speaks to customers at the shopfront on Dec. 24, 2023. (Henry Jom/The Epoch Times)

Mr. Lalani said that Melbourne should be the busiest place in Australia, having been previously titled the “most liveable city in the world.”

“Melbourne should have the busiest shops in Australia—hustling and bustling all the time.”

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