Peter Dutton’s plan to give tax breaks for long lunches has been slammed by the government, with Treasury estimating it could cost taxpayers a whopping $500 million a year.
The opposition leader had initially promised to cut red tape for small businesses by introducing a capped tax deduction of $20,000 for business-related meal and entertainment expenses.
What’s the Real Cost?
The Coalition claims the policy will cost just $250 million a year, but refuses to release the detailed costings.
In contrast, Treasury’s costings suggest the policy could blow a massive hole in the budget, with estimates ranging from $500 million to over $10 billion a year if all eligible businesses claim the maximum deduction.
A “Meal Tax Deduction” – What’s Included?
The opposition has seemingly backtracked on the original plan, with shadow treasurer Angus Taylor describing it as a “meal tax deduction” that only covers food expenses.
However, the government argues that even this narrowed interpretation would still cost taxpayers hundreds of millions of dollars a year.
No Strippers, No Golf – But What About Booze?
The Coalition has clarified that the tax deduction can’t be used for strippers, golf, or other forms of entertainment.
However, businesses can still claim a deduction for meals, including alcohol. But what about the potential for rorting the system?
ATO Weighs In – What Constitutes “Entertainment”?
According to the ATO, entertainment includes a range of activities, from sporting events to theater tickets. But what does this mean for businesses looking to claim a tax deduction?
GST Fears – States and Territories to Foot the Bill
The Treasurer has warned that the policy would cut GST revenue by $169 million a year, even if it only covers meals.
This could have a significant impact on state and territory budgets, potentially reducing funding for essential services like Medicare.
The Verdict – A Policy in Disarray?
The opposition’s tax break plan has been widely criticized, with many questioning its potential impact on the budget.
As the debate continues, one thing is clear – taxpayers deserve transparency and accountability from their leaders. Will the Coalition come clean on the true cost of their policy, or will it remain a mystery? Only time will tell.