The Coalition’s proposal to introduce a tax credit on lunch expenses for small businesses was a hot topic on the first sitting day of Parliament, with fierce debate on how much the policy would cost.

Depending on how many businesses claim the credit, and the amount they claim, Labor’s costings from the Treasury predict that the tax-free lunch could cost the taxpayer anywhere from $1.6 billion to $10 billion.

Shadow Treasurer Angus Taylor accused Labor of using the Treasury to attack the Opposition, calling it an “egregious politicisation of the public service.” The Coalition’s estimate, from the independent Parliamentary Budget Office, puts the cost at $250 million.

The tax credit would allow small businesses to claim up to $20,000 a year off their taxable income for meals with clients or staff. Angus Taylor suggested that this was a way to bring small businesses closer to a level footing with larger companies like Woolworths or Qantas, which already enjoy a tax break on meal expenses. Treasurer Jim Chalmers slammed the policy, pointing to the Coalition’s lack of costings and political vision.

Opposition Leader Peter Dutton says that Australian businesses need all the help they can get, after what he calls a “horrible period” under Labor.

But is this what small businesses really need? And is there such thing as a tax-free lunch?

Image: Small business owners across Australia are struggling to stay afloat. Image: Shutterstock – Bricolage

Produced By: Oliver Rodden

Featured In Story: The Hon. Dr. Jim Chalmers – Treasurer of Australia, Anne Nalder – CEO of the Small Business Association of Australia, and Bran Black – Chief Executive of the Business Council of Australia

First aired on The Wire, Wednesday 5 February 2025