Hospitality businesses urge Federal Government to dump Fringe Benefits Tax in 2020 Budget

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Struggling South Australian cafes and restaurants are urging the Australian Government to dump the Fringe Benefits Tax (FBT) in Tuesday’s Federal Budget.

The tax increases the cost of work lunches and dinners.

South Australia’s peak business body, Business SA, has called for exemptions for businesses from paying the tax to boost the local economy during the coronavirus pandemic.

Business SA chief executive Martin Haese said it would give South Australian businesses “a shot in the arm”.

“We know it will have an immediate and positive benefit for thousands of hard-working South Australian business owners,” Mr Haese said.

“This will not only help our hospitality businesses; the supply chains and other businesses serving our restaurants, cafes, bars, hotels and function centres [are] all set to benefit too.”

Mr Haese said it would mean the Federal Government receives $14 million less in FBT revenue from South Australia each year.

“This is a relatively small price for the Federal Government to pay to protect more of the 61,000 jobs of South Australians employed in the hospitality industry,” he said.

Employers also pay FBT on behalf of employees for perks such as company cars, gym memberships or tickets to a concert.

‘The time is now and we’ve got to do it’

Adelaide restaurant owner Cono Gorgone said his business has cut about a quarter of its staff during the pandemic.

Mr Gorgone said a Federal Government FBT exemption in this year’s Federal Budget would help soften the blow of the 40 per cent reduction in customers walking through his doors.

“The time is now and we’ve got to do it before there’s a catastrophe with all the businesses in South Australia and Australia who are suffering because of COVID-19,” Mr Gorgone said.

“A 200-seat restaurant would have to go to 90 seats because of the social distancing.

“That means instead of making what a normal cashflow would be at 100 per cent, we’d really be running at 50 per cent.”

He said today’s rules are a far cry from the 1980s when the FBT did not exist.

“In the 80s it was just thriving. Especially the lunches, they were just great. The business lunches, the boys in their suits and the long lunches.

“I think right now it’s a bit of an urgent situation where this would be the most appropriate time for the Government … to proceed with getting rid of FBT, ASAP.”

By Joshua Boscaini (Original ABC Article)