The Labor government has ridiculed the Coalition’s plan to allow small businesses to claim tax deductions on meals and entertainment, saying it amounts to using taxpayer money to “shout your boss steak tartare”.
Meanwhile, the opposition leader Peter Dutton has declined to say how much the idea would cost – or exactly what would be covered.
The Coalition has confirmed strip clubs and adult entertainment venues will not be eligible for tax write-offs under their plan to allow tax deductions of up to $20,000 for meal and entertainment expenses for small businesses. However, the Coalition has conceded hospitality or food at sporting matches or at a round of golf with clients would be permitted.
Senior Labor ministers have called the idea a “farce” and claimed the policy would be a perk for bosses.
“How will they make sure that it’s not rorted? They’re making it up as they go along,” the treasurer, Jim Chalmers, claimed.
The Coalition, which is under pressure to announce more substantial policy ideas as the election looms, unveiled the deduction on Sunday. Taylor said it would apply to “dining and entertainment provided to clients, vendors, and employees”. In a speech, Dutton gave examples of a business owner taking their employees out for a pub lunch to “celebrate a week of hard work”, a sales event, or a team-building exercise.
The opposition leader pitched it as an incentive for businesses to spend more on “food and entertainment” at their local cafes, clubs and pubs, but stressed alcohol would be exempt. Peak bodies representing the cafe sector and small businesses warmly welcomed the idea.
But the Daily Telegraph reported on Thursday the policy could also extend to football games, golf rounds and movie days for staff or clients.
Dutton told 2ST radio on Thursday the policy would also apply to business-related expenses when “you’re trying to win a big contract from a client”.
Guardian Australia contacted Dutton and Taylor’s offices on Thursday for clarification on what deductions would be eligible, and whether other events sometimes associated with team-building or staff rewards – such as karaoke, paintball, tenpin bowling, theme park visits or holiday parties – could be tax deducted.
The opposition was also asked how it would enforce banning brothels and strip clubs from the scheme. Neither Dutton nor Taylor’s offices gave on-record responses to questions, with Dutton’s office pointing to his media appearances on Thursday.
However, Guardian Australia understands the Coalition policy is meant to apply only to the meal component of such expenses. For instance, food at football games would be covered, but not entry tickets; meals provided at a work Christmas party or business meeting would be covered, but not the fees to hire a venue or room.
On 2CC radio, Taylor said there would be “appropriate safeguards” but did not detail what they would be.
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“Anyone who’s claiming this is some kind of rorting mechanism … it’s absolutely not. We need people getting out in their businesses, connecting for business purposes. That’s what it’s about, and supporting our small local businesses, our hospitality businesses, restaurants and cafes and pubs,” he said.
Chalmers, education minister Jason Clare and the employment minister, Murray Watt, have strongly ridiculed the policy. The treasurer joked that the opposition was “digging in for long lunches and bosses”, and demanded Dutton specify how much the policy would cost – a figure the opposition leader declined to detail when asked on Thursday.
“We’ll provide that information as you would in the normal scheme of things. We don’t dance according to the demands of Jim Chalmers,” Dutton told a press conference.
In a cost-of-living crisis, both Dutton and Anthony Albanese have sought to portray themselves as sympathetic to the concerns of ordinary workers, and to accuse their opponent of being too cosy with big business and well-paid corporate leaders.
While not releasing the costing, Dutton separately said “about 98% of businesses in Australia” would be eligible under the $10m turnover threshold, and that the policy would help “2.5 million businesses”.
Clare is paying to boost social media ads critical of the policy on Instagram and Facebook. In one ad, he claimed “Dutton wants taxpayers to pay for their bosses lunch”. In another, he said Labor backed “free Tafe for tradies” while the Liberals wanted “free lunch for bosses”.
On X, he posted a clip of 1987 movie Wall Street, claiming the policy amounted to using taxpayer money “to shout your boss steak tartare”.
