Economic Effects of Sydney's 'Lockout' Laws

Spurred by (demographically and geographically distinct) Darlinghurst's off-handed inclusion in the CBD for the purposes of the lockout laws, and by reports from our local members of a deterioration of business conditions (both day time and night time), in late 2015 we undertook a survey of Darlinghurst businesses on the effects of the lockout laws. The methodology of the survey was developed in close consultation with NSW Treasury.

Over 200 businesses and employees responded to the survey.

The results paint a stark picture of how these laws have had a chilling effect on not only the vibrancy of this dynamic area of Sydney but also on employment opportunities and business growth. Most importantly, these data show that the day-time economy has also been hugely affected by these hastily enacted and ill-thought-out laws - a point often lacking in this debate.

Between 2013 and 2015 the number of businesses stating that they employed more than 10 full time staff members fell with an 18.0% drop in the employee hours generated across all businesses.

In terms of late night traders, the laws have had a significant impact on bars, pubs and clubs in Darlinghurst with a 31.0% drop in annual turnover in under 3 years.

While naturally not everything over this period can be pointed wholly and solely on liquor laws, feedback from both businesses and employees surveyed is that these laws have had a major impact.

The survey also demonstrates that the levels of confidence in the Darlo business community is at rock bottom – only 50% of businesses surveyed expected to be still be operating in the next 12 months.

We all want a safe night out – there’s just got to be a more sensible way to achieve it than what the Government’s delivered.

See below for a breakdown of the answers to all the questions asked

PDF Results Here.  

 

KEY ECONOMIC DATA

Change in Employee Hours Generated Darlinghurst 2015.jpg
Change in Full Time Staffing Levels Darlinghurst 2015.jpg

Lockout Laws survey – Insights

Survey Period: 21/9/2015 – 18/11/2015

 

Employee Results

·         The majority of employee respondents were either current or former employees of a business located in Darlinghurst (63.8%). 18% of respondents had no direct link to Darlinghurst.

·         43% of employees surveyed worked in bars, Pubs and Clubs, while 10.9% worked in retail. 9.9% of respondents were musicians, while 7.9% were cafes and restaurants.

·         53.5% of employee respondents were full time employees, with casuals accounting for 28.3%, part-time workers at 13.1% and those unemployed at 5.1%.

·         The majority of workers were wage or salary earners at 71.3%. 16.8% were contractors or sub-contractors.

·         Just 38.9% of employees feel safe and secure in their current job. 23.3% responded that they felt very uncertain, with the remainder stating they were uncertain.

·         Just 35.1% of employees expect to be working in their position in 12 months’ time. 27.7% expect they will not be working in the same position, with the remainder stating they were unsure.

·         The main reason for employees finishing work was the employer closing or downsizing at 29.0%. This was followed by changing jobs or seeking other employment at 22.4%, other reasons (specified in data) at 18.4%, Casual work at 10.5% and returning to study/travel or family reasons at 6.6%

·         94.4% of employees stated that job opportunities in the Darlinghurst area have decreased since the introduction of the lockout laws in February 2014. Just 2.2% responded that they have increased with the remainder stating they have remained the same.

·         61.1% of employees believed the lockout laws were ‘fully’ responsible for the change in job opportunities, with a further 28.9% stating they were ‘mostly’ to blame. This leaves 10% of respondents indicating that the lockout laws were either partially, minimally or not to blame at all for the change in job opportunities.

·         93.3% of employees believed Sydney’s cultural life had been diminished by the introduction of the lockout laws. Just 3.4% of employees stated that it had been improved with the remainder stating it has had no effect.

·         62.2% of employees believed there has been no effect on public safety since the introduction of the lockout laws. 23.2% stated that public safety had diminished, while 14.6% stated it had improved.

·         Employees were asked to estimate the number of people on the streets late at night. 74.4% stated that there were ‘a lot less people’, with 14.4% responding ‘a few less people’. The remaining 11.1% of respondents replied either ‘a lot more people’, ‘a few more people’ or ‘the same amount of people’.

·         Employees were asked to estimate the number of people at venues late at night. 75.6% of employees stated there were ‘a lot less people’, with 16.7% responding ‘a few less people’. The remaining 7.8% of respondents stated either ‘a lot more people’, ‘a few more people’ or ‘the same amount of people’.

·         Employees were asked to rate the general vibe of the lockout zones since the introduction of the laws. 88.9% of employees stated that it had ‘changed for the worse’, with 7.8% stating it had ‘changed for the better’. The remainder stated it had not changed.

 

Business Results

·         The main respondents were from the Bars, Pubs and Clubs sector, or Retail, and Music sectors.

·         They primarily came from the 2010 postcode of Surry Hills and Darlinghurst, with the other major responses coming from 2011 (Potts Point and Woolloomooloo) and 2000 (the Rocks, Sydney City)

·         Business stating that they employed more than 10 full time staff members fell over the three years asked from 20.7% in July 2013, to 19.3% in July 2014, and to just 11.8% in July 2015, a reduction of 43.3%

·         Businesses stating they had generated an average of more than 250 employee hours has fallen over the three years from 17.3% in July 2013, to 16.7% in July 2014, and now to just 11.0% in July 2015, a reduction of 36.5%

·         In terms of annual turnover, 21.1% businesses reported a turnover of over $1.0m. This was followed by 22.5% in 2014. In 2015, just 15.5% of businesses reported a turnover of over $1.0m, a reduction of 26.5%

·         73.2% of businesses surveyed stated that turnover had decreased dince the implementation of the lockout laws in February 2014. 9.9% of businesses responded that turnover had increased as a result of the lockout laws, with 16.9% of businesses stating that turnover has remained the same.

·         39.1% of businesses surveyed stated that the lockout laws were ‘fully’ responsible for this change, with a further 34.4% stating that they believed the lockout laws were ‘mostly’ responsible. Just 4.7% of businesses stated that the lockout laws were ‘not at all’ responsible.

·         70.4% of businesses have modified their business practices in response to the lockout laws being implemented in February 2014.

·         The majority of changes have come from changing operating hours, the goods and services sold, and the prices charged.

·         Just 15.2% of businesses feel their business is currently ‘safe and secure’, with 39.4% of businesses stating that they feel ‘very uncertain’. The remaining 45.5% are ‘uncertain’.

·         Only 50% of businesses surveyed expected to be operating in the next 12 months. A further 35.3% stated they were ‘Unsure’, with 14.7% simply responding that they do not expect to be operating in the next 12 months.

·         90.2% of businesses surveyed believed the introduction of the lockout laws had diminished Sydney’s cultural life. Just 9.8% stated that it had improved as a result.

·         51.8% of businesses surveyed believed there had been no effect on public safety as a result of the introduction of the lockout laws in February 2014. While 16.1% of businesses thought it had improved, 32.1% of businesses believed it had diminished.