The Coalition’s plan to make small businesses lunches tax-deductible is “carefully targeted” and won’t stoke inflation, Shadow Treasurer Angus Taylor claims, just days after Opposition Leader Peter Dutton likened the Albanese government’s energy bill rebates to temporary “sugar hits”.
Speaking in Brisbane on Sunday, Dutton announced his Coalition government would introduce a new tax deduction, capped at $20,000 per year, for small business expenditure on meal and entertainment expenses for staff and clients.
Those deductions would be available to small businesses with annual turnover under $10 million, and exclude spending on alcohol, and be exempt from the Fringe Benefits Tax.
Dutton said the policy, projected to last two years before review, would support hospitality businesses slogging through tough economic conditions and encourage spending within SMEs.
The high-profile pitch comes after sustained criticism of the Albanese government’s own attempts to support small businesses and households, and Dutton’s claims that some government spending measures have worsened inflation.
In separate comments last week, Dutton slated the Albanese government’s energy bill rebates, which applied to small businesses and households, and accused the government of “spending money like a drunken sailor”.
The Coalition has not released full costings for the newly announced policy, with a clearer financial breakdown expected closer to the next federal election, set to take place on or before May 17.
But in a statement provided to SmartCompany, Shadow Treasurer Taylor said the plan has been “carefully targeted with a modest impact on the budget”.
“This policy has a modest cost but will have a big impact for small businesses which can have the confidence to reward staff or clients with a coffee, a meal, or an event without attracting further tax liabilities,” he added.
Its impact on the underlying cash balance is “not of a scale that it would add to inflation,” he added, claiming the Coalition’s overall fiscal settings would be “more modest” than Labor’s.
Responding to questions about the small business meal deductions, Minister for Small Business Julie Collins defended the Albanese government’s spending record and support for SMEs.
The government is “focussed on providing practical and targeted support that helps small businesses invest in and grow their business,” she said, in a statement provided to SmartCompany.
The Minister pointed to the energy bill rebates and Labor’s commitment to a $20,000 instant asset write-off extension as evidence.
“Peter Dutton and the Liberals need to answer if these crucial supports would be reversed under a Coalition government,” Minister Collins continued.
“Our responsible economic management has delivered back-to-back surpluses in our first two years.
“We are helping people with cost of living while fighting inflation, ensuring Australians earn more and keep more of what they earn.”
As political leaders defend their plans for small business support, industry groups have shared their early support for the Coalition’s plan.
Wes Lambert, CEO of the Australian Restaurant and Cafe Association, welcomed the policy proposal.
“This policy could lead to billions in additional spending by small businesses in restaurants and cafés across the country,” he wrote on LinkedIn.
“With record insolvencies and higher costs facing small businesses, we need to inject as much as confidence as possible and induce people back into restaurants, cafes, shows and experiences,” wrote Council of Small Business Organisations Australia CEO Luke Achterstraat.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
