Treasurer Dominic Perrottet wants FBT rebate to lure people back to the city

It’s time to get out to lunch, with the NSW Treasurer keen for a cut to the fringe benefits tax, and he’s not going to let the federal government’s refusal ruin his plans.

A fringe benefits tax rebate could be on the cards in a bid to bring back the long lunch.

Treasurer Dominic Perrottet raised the idea at Thursday’s Sydney CBD Summit as a way to pump life back into the city’s restaurants and bars.

Ellen Scott-Young and Barbara Topinkova enjoy a drink at Opera Kitchen at Circular Quay. Picture: Richard Dobson

The suggestion came as Mr Perrottet proposed a radical overhaul of remaining COVID-19 restrictions, including lifting the “one person per two square metre” rule for restaurants, bars and pubs.

Mr Perrottet said he believed that scrapping or suspending the fringe benefits tax (FBT) could be a way of stimulating the CBD economy.

“I’m all in favour of bringing back the long lunch in Sydney,” he said.

Federal Treasurer Josh Frydenberg ruled out scrapping the tax that delivers $3.8 billion a year to Canberra’s coffers.

But Mr Perrottet emphasised he was open to an innovative state-based solution to help spark Sydney’s CBD economy.

FBT is a federal government tax paid on benefits provided to employees or associates that was imposed in 1986.

NSW Treasurer Dominic Perrottet wants to pump life back into Sydney’s restaurants and bars. Picture: NCA NewsWire / Christian Gilles

Mr Perrottet said he would look at reform options if the federal government did not step in.

“If they don’t do it themselves, I’m more than happy to look at something in a creative space from the NSW government level to help drive that,” Mr Perrottet told the summit.

“Where we sit at the moment at a health level, I can’t see the reason for it (the FBT).”

One state government lever could be offering tax rebates to the value of FBT paid for long lunches in the city.

The incentive could be limited to Fridays, when many people are currently working from home.

Scrapping FBT has been proposed by hospitality industry leaders as a way to increase patronage in the city and counteract the impact of people working from home.

NSW Planning Minister Rob Stokes, Finance and Small Business Minister Damien Tudehope, Chef Luke Mangan, TTF chief executive Margy Osmond and City of Sydney Lord Mayor Clover Moore at the summit. Picture: NCA NewsWire/Christian Gilles

Restaurateur Luke Mangan said bringing back the long lunch by scrapping FBT on Fridays could increase trade by up to 50 per cent.

“Get people back into the city, get people out networking through lunches, and that could raise our business up to 30, 40, or 50 per cent,” he said.

“As restaurateurs and hospitality and tourism people we need incentives, and this is a good incentive. There’s things that the government can do to incentivise people to come back into the city and entertain, and fringe benefits tax is one of them.”

Ellen Scott-Young, 24, said although working from home could be comfortable, there was nothing better than seeing people face-to-face and seeing the life of the city.

“I think people forgot the value of seeing your colleagues and going out for a nice relaxing lunch,” she said.

“Although work from home is comfortable, it is limited in so many ways.”

It comes after hospitality tsar Justin Hemmes told The Daily Telegraph the capacity restrictions are now “superfluous” and should be scrapped.

Restaurants and pubs are still constrained by the capacity limits.

Mr Mangan said operating at full capacity could also increase trade by half.

Mr Perrottet also suggested 1.5 metre social distancing guidelines should “maybe” be removed completely.

He said business HR departments were constrained by 1.5m social distancing guidelines despite the advice being issued in “soft” language.

“If it’s soft, then maybe we should just remove it altogether,” Mr Perrottet told the forum.

The Treasurer also outlined his vision to ban cars from the Cahill Expressway so it can be turned into a New York style High Line for pedestrians