Lord Mayor Nick Reece’s ‘long lunch’ tax reform plan to lure workers back into the city

Lord Mayor Nick Reece will push for tax breaks for employers who take their staff out to business lunches under a plan to encourage more workers to return to the office.

Lord Mayor Nick Reece has unveiled a plan to encourage more workers back into the city by pushing for tax breaks for employers who take their staff out to business lunches.

The Herald Sun can reveal that Mr Reece will on Wednesday launch his 10-point business plan, with a proposal to reform the fringe benefits tax (FBT) scheme one of its key focuses.

Under the proposal, Mr Reece would campaign for the federal government to review the tax, which is paid by employers on certain benefits provided to their employees, including gym memberships, entertainment or meals.

Mr Reece, who is hoping to be elected lord mayor at the council election later this month, said it was the right time for FBT reform as Australia’s cities continue to change.

“Tax reform should never be set and forget,” he said.

“It should respond to the way we live and work today and always be looking at ways to support businesses, workers and the broader economy.

“Sensible reform of FBT has the potential to deliver big benefits to our city’s traders — from attracting more employees back into the office, to supporting the cafes, restaurants and bars that thrive when more people are working in the city.”

Lord Mayor Nick Reece is pushing for tax breaks for employers who take their staff out to business lunches. Picture: David Caird

Regular business lunches were once big business for Melbourne’s restaurants, but went out of fashion when former Labor prime minister Paul Keating introduced the FBT in 1986.

Nowadays, a regular Thursday or Friday lunch with employees at a restaurant would not be exempt from the tax.

Australian Restaurant and Cafe Association chief executive Wes Lambert said reforming the FBT would make a “huge difference” when it came to getting more people into the city’s restaurants, bars and cafes.

“This is a great … campaign we can really get behind whether it’s a long lunch or drinks after work, this would be a big boost to the hospitality sector,” he said.

Mr Reece added that the reform would not only be a “shot in the arm” for Melbourne’s hospitality sector, but reduce the tax burden on businesses trying to offer incentives to entice their employees back to the office.

“It’s time for a proper debate about whether FBT is fit for purpose and what changes could be made to encourage workers back to the office and stimulate local Melbourne businesses.”

Mr Reece with Pure South Dining owner Philip Kennedy. Picture: David Caird

The FBT raises about $4bn per year for the federal government, which amounts to only 1 per cent of total tax revenue, with the percentage of that from meals even smaller.

Under Mr Reece’s 10-point plan, he has also pledged to establish a tourism portfolio at the City of Melbourne, freeze parking rates for four years, expand the business concierge program and move to transform the Formula One Grand Prix into a week-long festival, if elected.

Fellow lord mayoral candidate Arron Wood, who Mr Reece will debate at a Victorian Chamber of Commerce and Industry (VECCI) event on Wednesday morning, released his plan to get Melbourne “back in business” last month.

If elected, Mr Wood said he would dedicate $25m to re-establish Melbourne as a “global business hub” and revealed on Tuesday his plan to create a “recovery taskforce” made up of some of Melbourne’s brightest business minds – including VECCI chief executive Paul Guerra and prominent restaurateur Chris Lucas – to help drive the city’s economy.

Fellow contender Anthony Koutoufides has also pledged to “bring life back” to the city by shouting city workers a Monday morning coffee for at least a month.

Ballot packs have now been mailed to voters, with the polls to close on October 25.

Originally published as Lord Mayor Nick Reece’s ‘long lunch’ tax reform plan to lure workers back into the city