Coalition’s small business tax deductions would cost $1.6b, Labor claims
Treasury costings requested by the federal government show one of the Coalition’s flagship policies would cost $1.6b.
NSW
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The Coalition’s plan to allow small businesses up to $20,000 in tax deductions for meals and entertainment-related expenses would deliver a $1.6b blow to the budget, according to costings done by the Treasury.
The figure – prepared by Treasury at the request of the Government – assumes that $1.6b in taxable revenue would be lost if just 2.6 million of Australia’s four million small businesses claimed just $2500 of the available $20,000 in deductions each year.
If 2.6 million small businesses – classified as those with less than $10m in annual turnover – claimed the maximum $20,000 deduction, the total cost would balloon to $10b, according to Treasury’s figures.
Treasurer Jim Chalmers claimed the figures showed “the Liberals’ taxpayer-funded long lunches policy would smash the budget”.
“We now know this policy costs billions of dollars but we still don’t know what Peter Dutton would cut to pay for it,” he said.
“After three years the best they can come up with is billions of taxpayer dollars to subsidise long lunches.”
The Coalition has previously flip-flopped on what one of their flagship economic policies would include.
The Telegraph initially confirmed with the office of the Shadow Treasurer, Angus Taylor, that the policy would cover “business activity”, including golf fees and tickets to NRL matches.
The initial statement released by the Coalition on their policy also stated the scheme would cover “business-related meal and entertainment expenses”.
However, Opposition leader Peter Dutton later rejected activities such as golf would be captured under the tax deductions.
The Coalition maintains the policy will be a shot-in-the-arm for the hospitality sector as well as small businesses, while the government has warned the proposal would be ripe for rorting.
The Opposition is yet to release their own costings for the policy.
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