Dominic Perrottet takes back proposal to offer NSW fringe benefit tax relief on ‘long lunches’

The NSW government looks unlikely to offer fringe benefit tax relief for the restaurant sector, despite the treasurer’s pledge to find “creative” ways to bring back the long lunch.

Treasurer Dominic Perrottet is walking back on his pledge to find “creative” ways to offer Fringe Benefits Tax relief to reinvigorate the CBD hospitality industry.

Despite initially suggesting the NSW government could offer tax rebates to cover the cost of the FBT paid on long lunches, Mr Perrottet has now declared any FBT relief needs to be delivered by the federal government.

“The FBT is a federal tax and would need to be addressed in that jurisdiction. I have passed on feedback from the hospitality sector to the federal government in relation to this,” he said in a statement.

Treasurer Dominic Perrottet flagged temporary Fringe Benefits Tax relief at the Sydney CBD Summit in April.

The comments came after a proposal from Restaurant and Catering Australia to Mr Perrottet, proposing FBT rebates and payroll tax waivers.

The group also called for the Cahill Expressway to be turned into a “pop-up dining precinct” every Friday for three months.

It is estimated that more than $300 million in FBT will be paid in NSW on hospitality alone in the next financial year.

The industry group argued that giving business a break on paying FBT could bring back the long lunch, encouraging people back into the city while boosting business for restaurants.

Mr Perrottet said FBT relief “has not gathered traction (but) we will continue to look at alternate ways to support CBD businesses”.

He said the NSW government believed providing FBT relief would require legislative change and be too complex to implement, mainly because the tax is collected by the federal government.

The federal budget contained no measures for FBT relief.

Since last year’s federal budget, the money raised from the tax in 2020-21 was revised up by $100m, and $630m over four years to 2023-24.

Mr Perrottet said other initiatives, including pop-up events, are being pursued to bring more people back to the city rather than state relief on FBT.

“There will be more announcements in this space very soon,” he said.

Treasurer Dominic Perrottet says he will look at other measure to support the restaurant sector. Picture: NCA NewsWire / Christian Gilles

Restaurant and Catering CEO Wes Lambert sent the proposal to the Treasurer on Wednesday. Source: Supplied

RCA has also suggested a temporary “pop-up dining precinct” for the Cahill Expressway.

Under the proposal, a “Dine Out on the Cahill” event could see cars booted from the expressway every Friday from midday until late evening for three months.

The initiative would be designed to increase foot traffic in the city on Fridays, which have typically become work-from-home days for CBD workers.

Mr Perrottet has previously indicated the Cahill Expressway could be closed to cars and turned into a New York-style “High Line”.