With a federal election around the corner, amid a growing cost-of-living crisis, Opposition Leader Peter Dutton introduced his signature economic policy: a tax break for small businesses to claim a free lunch (or two).
Dutton wants any small business, which trades under $10 million annually, to be eligible for a $20,000 tax break for work-related dining and “entertainment” for staff and clients.
The policy would run for two years and would cover about 98% (2.5 million) of businesses.
Dutton claimed his “free lunches” policy would ease cost of living pressures and help the “struggling hospitality industry”.
However, he failed to say what its cost to the public purse would be, how “entertainment expenses” are defined and how it would be policed by the tax office.
When pressed, he said it would not involve alcohol or “adult entertainment” venues, but conceded that sporting matches and rounds of golf would be tax deductible.
Since then, shadow treasurer Angus Taylor said that only food would be subsidised and “appropriate safeguards” would be set up to prevent misuse.
Labor Treasurer Jim Chalmers said Dutton’s free lunch policy would “smash the budget” and is likely to be “rorted”.
Chalmers commissioned Treasury to price the proposal and found it came in at $1.6–10 billion.
Taylor disputed this, telling Sky News that figures from an independent Parliamentary Budget Office (PBO) costing were $250 million — 97.5% less than Treasury’s estimate.
The Coalition has not yet released the PBO’s report, claiming it will do so with its economic costings before the federal poll.
Labor MPs have described the free lunch policy a “farce”, pointing to the likelihood of bosses abusing the tax break, while workers end up subsidising the bill. Chalmers said it is the kind of policy that people come up with at the “tail-end of a very long lunch”.
But the entitlement does not stop with Dutton: Labor also has a poor record.
New South Wales Labor transport minister Jo Haylen was forced to relinquish her ministry on February 4 after she used a taxpayer-funded driver for herself and her close friend housing minister Rose Jackson to attend private lunch at a Newcastle winery at the end of last month.
Haylen said it was “within the rules”, but admitted it looked bad. She agreed to pay back the whopping $750 — which including having the chauffeur wait for 13 hours.
However, she was hardly apologetic, saying: “I have made mistakes; people aren’t perfect … I didn’t break the rules, but I acknowledge that’s not the test here.”
Despite Haylen “owning” her “mistake”, it took at least two more instances of her misuse of publicly-funded drivers being leaked before she stood down.
NSW Premier Chris Minns initially chastised, but ultimately defended, the minister’s use of government drivers for personal use, saying that while “it gives the government a bad reputation”, it is “part of the rules”.
The fact that these trips are, technically, "part of the rules”, is one more reason for the growing distrust of major parties.
Dutton’s “free lunch” policy will add fuel to this fire. It is completely misdirected and should be spent where it’s needed most.
The estimated $10 billion would be better spent on raising Centrelink payments, which remain well below the poverty line.
It could be ploughed into public transport and public housing stock to help the more than 175,000 people stuck on the waiting list.
If Labor really were concerned about those worse off, it should not have voted for the Coalition’s Stage 3 income tax policy to help the rich. It would tackle the structural issues underpinning the housing crisis: negative gearing and capital gains perks for the already wealthy.
If you agree our tax dollars could be better used to support those who really are struggling, rather than shouting your boss — or a pollie — a long lunch, become a Green Left supporter for as little as $5 a month or consider a donation to our 2025 Fighting Fund.