Perhaps the most contentious amendment to the liquor act is the reintroduction of annual licence fees. The new fee structure is built on a model of perceived risk with annual fees varying in line with certain trading conditions: licence type, trading hours, provision of meals, etc.
However, notable by its absence is any reference to risk based on the size or capacity of a venue. Whilst licensed clubs will pay a higher fee if the membership exceeds 2,000, no similar threshold has been applied to commercial licence holders. This creates a situation where the owner of a 40 seat restaurant, who wants the flexibility to remain open until 1 am on a Friday night, may be paying the same amount in annual fees as a 1,000 patron capacity nightclub open until 3 am every Friday and Saturday.
Several smaller operators are now weighing up the advantages and disadvantages of offering a liquor service and it is likely some marginal venues will elect to surrender the liquor licence rather than pay the additional fees.
Unfortunately, any submissions made to the government in an attempt to change this fee structure were unsuccessful and from 1 January 2009 all licensees will be forced to pay up or face immediate suspension and possible cancellation of the liquor licence.
To give licensees a clearer idea of the implications of this aspect of the amendments, the following paragraphs expand on some of the key points. Please contact us if you have any questions in relation to this important matter.
One of the perceived risk factors affecting annual fees is compliance history. A licensee who receives infringement notices or disciplinary action will face increased annual fees the following year. The maximum penalty, in addition to any fines received following disciplinary action, is $20,000 for ‘major trauma’ which is taken to mean death or a severe assault on the premises.
The good news for all current licensees is that when the new fee structure is introduced in 2009, all licensees will be given a clean slate for the purposes of calculating fees based on compliance history. The earliest anyone will have to pay this component of the annual fee will be in the period commencing 1 July 2010, at which time the fee will be assessed on compliance history for the preceding 12 months.
Although the licensee, approved manager or staff member is responsible for any non compliance, the fee is applied to the licence and is not affected by transfer. In other words, an incoming licensee will be assessed on the compliance record of the previous business owner.
Therefore, anyone buying licensed premises will need to carry out a search on the compliance history of the business vendor to ensure the annual fees will not increase in the following year. This search can only be completed with the consent of the current licensee.
Non Payment of Fees
The first annual fee will be due at the end of January 2009 and subsequent fees will be due at the end of July each year. If the fee is unpaid the licence will be suspended immediately and may be cancelled if the fee remains unpaid.
In the earlier stages of the liquor review there was reference to an application fee and a grant fee. The grant fee was not carried forward to the final version of amendments. However, new licensees will pay an annual fee on a pro rata basis calculated on the period from the first day of the month following approval of the licence to the end of the financial year.
At the time of writing this article the revised application fees have not been published.
The Liquor Act now defines four periods of extended trading hours.
Two periods before 10 am: from 7 to 9am and from 9 to 10 am, and
Two periods after Midnight: from midnight to 3 am and from 3 to 5 am.
Licensees will be required to pay a fee for trading in each of the additional periods.
Licensees may reduce the fees for extended trading periods by 25% if trading on weekends only. Weekends are defined as Saturday and Sunday. Therefore, approval to trade after Midnight on a Sunday (that is into the early hours of Monday morning) will require payment of the full fee.
A licensee may apply for a limited number of one-off permits each year: four permits to allow trading before 10 am and twelve permits to allow trading after midnight. An application fee will be required for each permit but this will not affect the annual licence fees.