Peter Dutton’s billion dollar blackhole over tax breaks for work lunches

Opposition leader Peter Dutton’s proposed tax cut plan could cost Australians more than $10 billion dollars a year.

Treasurer Jim Chalmers has accused Peter Dutton of planning to drop $1.6 billion on your “bosses lunch” under his big tax-cut plan for small business.

The uncosted policy was rolled out last month with the Liberal leader promising to cut red tape for small businesses by introducing a capped tax deduction of $20,000 for business-related meal and entertainment expenses.

The deduction does not cover alcohol, or golf trips, according to the Coalition.

But while Peter Dutton has refused to reveal how much the tax cut plan will cost the budget in revenue foregone, the Treasurer has now asked public officials to run the numbers.

Treasury’s “conservative costings” allegedly show this policy would cost the budget $1.6 billion a year.

And the Treasurer claims that this startling figure could grow to more than $10 billion a year if all eligible businesses claimed what they’d be entitled to.

In fact, the Treasury has assumed not every business claims the maximum $20,000.

It assumes that businesses would claim a deduction of $2,500 on average per year.

Peter Dutton’s proposal has been slammed by the government. Picture: NewsWire / Martin Ollman

Close up of businesswoman eating lunch with colleagues in restaurant. Photo: iStock

The Treasury also advised that the proposal will be difficult to police, suggesting that if take-up increased by 30 per cent, the proposal would cost $2 billion per year.

“Peter Dutton wants workers to pay for their bosses’ lunch,’’ the Treasurer said.

“He doesn’t want you to know how much you’re paying. This shows the Liberals’ taxpayer-funded long lunches policy would smash the budget.

“This is why he won’t come clean on costings or cuts.

“We now know this policy costs billions of dollars but we still don’t know what Peter Dutton would cut to pay for it.

“After three years the best they can come up with is billions of taxpayer dollars to subsidise long lunches.

“The Liberals are the party of rorts and waste. The contrast is clear: tax cuts for workers under Labor or tax breaks for bosses’ long lunches under the Liberals.”

Finance Minister Katy Gallagher said that Peter Dutton had opposed “every single cost of living measure we have delivered for the Australian people and now he wants to spend hundreds of millions of dollars of their money to subsidise business lunches.”

“What’s worse is that he has secret cuts to Medicare, the pension and housing in the wings to pay for it but he won’t come clean and tell Australians about it before the election,’’ she said.

Treasurer Jim Chalmers blasted the proposal. Picture: NewsWire / John Gass

Opposition Leader Peter Dutton announced the new cost-of-living policy to LNP members last month, promising a tax deduction of up to $20,000 for dining and entertainment expenses for eligible small businesses.

Businesses with a turnover of less than $10m would receive the tax break, Mr Dutton said, and it would cover spending on clients and staff.

“This is a win for the small business spending the money on their staff or clients and a win for the hospitality venues who will see an increased spend in their businesses,” he said.

“It will help businesses recover from a horrible period under three years of Labor.

“Small business is in our DNA as Liberals and Nationals and we want to help those businesses survive Labor’s time in office and thrive when we get back into government.”

“We will be unashamedly pro small business, delivering reforms to help the small business sector grow and get back on track,” the Coalition states in an election document spelling out its priorities.

“This is why we have already committed to extending the value of assets eligible for instant write-off to $30,000, for firms with annual turnover up to $10m.

“We will implement a pro small business agenda focused on saving time and money and delivering less government intervention and greater business freedom.”

Originally published as Peter Dutton’s billion dollar blackhole over tax breaks for work lunches