ARCA also says the initiative will have little impact on the government’s tax take.
The Australia Restaurant and Cafe Association (ARCA) has backed the Liberal-National Coalition’s plan to provide small businesses with tax breaks on up to $20,000 (US$12,000) to cover meal and entertainment costs.
ARCA says the initiative could create up to 100,000 jobs in the nation’s fifth biggest employment sector.
Labor has criticised the pledge warning it could “smash the budget” and cost the economy $1.6 billion—because it may result in a lower tax take.
Under the proposed Coalition policy, announced on Feb. 3 by Shadow Treasurer Angus Taylor, businesses with a turnover of up to $10 million (most small businesses) can receive a capped tax deduction of $20,000 to spend on these expenses. Alcohol has been excluded from the policy.
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An ARCA spokesperson told The Epoch Times the Australian government would not lose much revenue through the measure.
“How can a policy position that is specifically aimed at the 2.5 million small businesses that do less than $10 million a year be a benefit for the ‘big end of town?’” ARCA said.
“Currently Australia only collects $4.1 billion in fringe benefits tax, of which only $2 billion is on meals and entertainment. [Labor’s] costing don’t seem to be based on reality.”
The spokesperson also said the policy would encourage additional spending outside of what the government already taxes.
“It’s not costing the budget one cent.”
ARCA says the policy could galvanise the sector and create demand for tens of thousands of new jobs in the local economy.
In 2023, more than 900,000 Australians worked in the hospitality industry.
Labor Says Plan Not Fit For Purpose
Labor Prime Minister Anthony Albanese said on Feb. 4 that this was the “sloppiest” policy he’d seen in his time in office.
“This is the worst, sloppiest policy put forward by any opposition that I’ve seen in my entire time since I’ve been in Parliament, and that was a while ago,” he told reporters on Feb. 4.
“This shows they are simply not fit as an alternative government.
“They have opposed every cost-of-living measure, and this is all they’ve come up with.”
Treasurer Jim Chalmers held a press conference where he revealed Treasury had calculated the plan costing the budget $1.6 billion.
“Peter Dutton’s policy would smash the budget, and he hasn’t been able to answer basic questions about how he would prevent rorting, what would be the eligibility, and they haven’t released the costing,” Chalmers said.
