'We can't just flick a switch': Australian Restaurant and Cafe Association CEO slams Victoria's gas ban on new buildings and warns of mass closures

Sky News AU

7 hours ago

The CEO of the Australian Restaurant and Cafe Association, Wes Lambert, has blasted the Victorian government's proposed gas ban for new commercial buildings as 'legislation by stealth', warning it could spark a wave of hospitality closures and a potential day of protest shutdowns across the state.
Speaking to Sky News host Steve Price, Mr Lambert said the industry had been 'taken by surprise' by the Andrews-turned-Allan government's plan to ban gas in all new commercial buildings - excluding farms and factories - from January 1, 2027, just weeks after the next state election.
'The industry thought that we would be exempted and that we would be able to continue using gas unabated as the state transitions into more sustainable energy sources,' Mr Lambert said.
Under the policy, gas cooktops will be effectively banned from any new bars, restaurants, cafes or takeaway outlets constructed from 2027 - forcing hospitality venues to rely on electric-only equipment, which Lambert argues is commercially and operationally unviable.
'We know that the hospitality industry can't just flick a switch and on the 31st of December to the 1st of January go from gas to electric. It just won't work.'
Mr Lambert also warned the government is likely to apply the same gas restrictions to renovations and development applications (DAs) - not just new buildings - potentially affecting the more than 24,000 hospitality businesses operating across Victoria.
'We expect that the government's going to try to sneak in with DAs needing approval… so not just new buildings but also let's say renovations of restaurants and cafes and takeaway businesses around the state.'
The warning comes as Victoria continues to suffer the fallout from pandemic-era lockdowns and economic instability, with one in 10 hospitality businesses shutting down in the past 12 months, according to Mr Lambert.
Host Mr Price pointed to the fact that within Melbourne alone, they are home to the best restaurants, cafes, and coffee in Australia, citing it as a city of hospitality but believes the government are determined to run so many people out of business calling the situation 'pathetic'.
Adding fuel to the fire, hospitality venues now face rising operating costs due to the 3.5 per cent national minimum wage increase, coupled with a 0.5 per cent hike in superannuation, which together are driving up payroll pressure by around 4 per cent.
'I wish I could use the F-word in relation to this potential legislation,' Mr Lambert said.
'We are the hardest hit industry post-COVID in this cost-of-living crisis. We had told the Fair Work Commission that we wanted just a 2 per cent increase. And look, inflation came in at 2.1 per cent today. So, we think we're getting it right.'
Mr Lambert hinted at direct action from the industry if the gas ban proceeds in its current form, saying a state-wide closure protest is 'potentially' on the table.
'Potentially we could see a day before this gas ban goes into effect where hospitality businesses unite in solidarity and close for a day just so the government can see that we do stand up together when poor legislation is passed,' he said.
The broader gas phase-out plan has already drawn sharp criticism from energy experts, who say the policy will cripple Victoria's already weakened manufacturing base and overload the electricity grid, especially as more households and businesses are forced onto the electric system.
Energy analyst Saul Kavonic of MST Financial previously warned the policy risks accelerating the decline of Victorian small businesses and manufacturers, while remaining gas users shoulder higher infrastructure costs.
'You'll see an even further hastening of the deterioration of the manufacturing and small business sector in Victoria,' he said.
Although the state government softened its original gas replacement policy after backlash from owner-occupiers, it is still charging ahead with mandatory electrification for all new residential and commercial builds from March 2027.
Meanwhile, Victoria is heading for gas shortages by 2029, according to the Australian Energy Market Operator, yet the government's stance continues to spook potential investors in new gas supply projects.
Mr Lambert's final plea to the state government was blunt: delay the policy and rethink the damage.
'We think this is poor legislation and we need to stop the electrification of the hospitality industry while we transition,' he said.
'From gas to electric, it's going to take time. It's not something that we can do in just 18 short months.'