Dutton Pledges $20,000 Meal or Entertainment Tax Break for Small Business

Crowds gather at restaurants in the Chinatown district to celebrate the Lunar New Year in Sydney, Australia, on Jan. 29, 2022. Lisa Maree Williams/Getty Images

In a move aimed at galvanising the hospitality sector, Opposition Leader Peter Dutton is promising to allow small businesses to claim a tax refund for meals or entertainment, if elected this year.

With an election expected before May 2025, both Prime Minister Anthony Albanese and Dutton have ramped up their pre-election pitches in recent weeks.

Dutton said small businesses turning over $10 million would be eligible for this policy, but alcohol would not be deductible.

The opposition leader explained the measure would run for two years and be exempt from the Fringe Benefits Tax.

“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. It will help businesses recover from a horrible period under three years of Labor,” he said in a statement.

“Cafes, restaurants, clubs, and pubs are the lifeblood of so many local economies around the country.”

How Will It Work?

Currently, the cost of food and drink is private and not deductible according to the Australian Tax Office, with limited exemptions for meals consumed during travel for business.

Entertainment is generally considered private, although some exemptions from Fringe Benefit Tax exist for minor benefits, taxi travel, as well as food and drink consumed on business premises.

The new deduction would apply to meal and entertainment expenses connected with business activity and income, including dining and entertainment provided to clients, vendors, and employees.

People eat at a beach restaurant in Melbourne, Australia, on Jan. 26, 2023. Alexi J. Rosenfeld/Getty Images

Dutton announced the policy while campaigning in Keperra, Brisbane in the electorate of Ryan. This seat was previously held by the Liberal National Party before it was taken by the Greens in the 2022 election.

In a campaign speech, Dutton said the Coalition wants small businesses to spend more at their local cafes, clubs and pubs.

“If they can take their employees to the venues and pay for a meal as part of a milestone sales event, or an acknowledgement of above and beyond hard work, or a team building exercise – then it’s a win-win for both businesses,” he said. 

“It means the builder with five or six of his or her tradies can go down to a local restaurant, or to a local pub at the end of the week to celebrate a week of hard work.”

Dutton explained his policy would help retention and provide a reward for employees.

The opposition needs to win 18 seats in order to form government at the 2025 election, which could mean winning back seats taken by the Teals or Greens in 2022.

“This is a fiscally responsible down payment on our commitment to lower, simpler, fairer taxes and rebuilding Australian businesses,” said Shadow Treasurer Angus Taylor.

“It builds on our commitment to rebuild small business by making the instant asset write off permanent, saving more than 98 percent of businesses the hassle of dealing with depreciation schedules when they invest in their businesses.”

This asset write-off allows a business to deduct the cost of depreciating assets from their tax bill, including equipment, machinery, or vehicles.

Last week, the Coalition also pledged to increase the value of the instant asset write-off for small and medium enterprises from $20,000 to $30,000.

Prime Minister Actively Campaigning

Meanwhile, Prime Minister Albanese, campaigning in Western Sydney on Jan. 19, announced $1 billion of joint funding with the state for Western Sydney infrastructure projects.

This includes the two-lane corridor connecting Liverpool to the new Western Sydney International Airport. It follows an earlier pledge to upgrade the Bruce Highway that snakes along the coastline of the state of Queensland.

Liverpool is located in the electorate of Fowler, which Labor lost to independent Dai Le in the 2022 federal election.

Albanese also touted the Labor Party’s record number of women in his ministerial cabinet following a recent reshuffle on Jan. 20.

Aged Care Minister Anika Wells was promoted to cabinet, while Finance Minister Katy Gallagher and Social Services Minister Amanda Rishworth took on new expanded portfolios.

“We now have more women than ever before in Cabinet. To Ministers Gallagher, Rishworth and Aly, congratulations on your new roles. And to Minister Wells, welcome to the Cabinet,” he said.