Costings commissioned by Jim Chalmers suggest policy at risk of being ‘rorted’ could cost up to $10bn a year
The Coalition’s policy for tax-deductible business lunches would cost between $1.6bn and $10bn a year, the Labor government claims, according to costings Jim Chalmers commissioned from his Treasury department.
The treasurer claimed the policy was at risk of being “rorted” by businesses claiming personal food expenses, adding further to confusion about the Coalition’s contentious meals and entertainment policy.
But the shadow treasurer, Angus Taylor, while still not releasing the opposition’s costings for the policy, claimed it would be far less than the government said. Taylor accused Chalmers of politicising the public service by asking his own department to analyse the Coalition proposal, for what he called a “nonsense” political attack.
The prime minister, Anthony Albanese, ridiculed the meals policy as “the worst, sloppiest policy put forward by any opposition that I’ve seen in my entire time since I’ve been in parliament”.
“This shows they are simply not fit as an alternative government. They have opposed every cost-of-living measure and this is all they’ve come up with.”
Announced two weeks ago, the Coalition’s policy would allow businesses to claim up to $20,000 a year on meals and entertainment. Dutton and Taylor billed it as helping firms attract new clients with business lunches, or allowing bosses to reward workers after a hard week – but it attracted confusion last week over what expenses would be eligible, with differing reports as to whether work parties, golf days or football matches could be put on the public purse.
The Coalition said it would release costings at some point in future. Senior Labor ministers derided the policy as a “farce”, claiming it amounted to using taxpayer money to “shout your boss steak tartare”.
Dutton later clarified that the policy applied to meals only, not expenses such as function room hire or event tickets – but the opposition conceded hospitality or food at sporting matches or at a round of golf with clients would be permitted.
He has said “about 98% of businesses in Australia” would be eligible for the tax deduction, and that the policy would help “2.5 million businesses”.
Chalmers, in a release overnight, claimed the policy would cost $1.6bn a year, citing analysis from public servants – but that it could total “more than $10bn a year if all eligible businesses claimed what they’d be entitled to”.
“In the absence of Opposition costings, the Government asked Treasury to cost a proposal based on parameters made publicly available by the Coalition,” Chalmers said.
“The Liberals’ taxpayer-funded long lunches policy would smash the budget. This is why they won’t come clean on costings or cuts.”
“If take up and average claims are higher than expected or if businesses rort the system by illegitimately claiming food and entertainment that is personal, not for business, the cost of the policy would increase substantially,” Chalmers said.
Taylor, responding on Sky News to Chalmers’ claims, defended the policy as “a modest tax cut for small businesses” that would cost less than $250m.
Guardian Australia asked Taylor’s office if it would now release the Coalition costing in response. He told Sky it would release “the detailed costings in advance of the next election”.
The shadow treasurer accused Labor of using public servants to “attack, in pure political terms, the opposition”.
Taylor said he would request “a full explanation” from the secretary of Treasury.
“The public service is not there to make political attacks on your opponents,” he said. “The code of conduct is very clear on this. This is an egregious politicisation of a public service, which Labor is bloating for its own purposes.
“We’ve had [the meals and entertainment policy] costed. We’ve worked closely with the Parliamentary Budget Office. It’s nothing like what the treasurer is saying.”
Responding in turn, Chalmers told a press conference: “It would be preferable if the Coalition had been upfront about this stuff [the policy].
“We’ve released this costing because we think it’s important that Australians understand the risks to the budget from what is being proposed in Peter Dutton’s long lunches for bosses policy,” he told the ABC. “And if they’ve got a different costing, they should release it.”
