A pre-election policy scuffle has broken out over the Coalition’s tax-deductible dining pledge for small business, as Treasurer Jim Chalmers put the bill for the policy at $1.6 billion earlier this week.
The Treasury says it estimated the cost of the policy “based on parameters made publicly available by the Coalition” so far.
“We now know from the Treasury costing that what Peter Dutton is proposing will cost $1.6 billion a year, but could cost more than $10 billion a year,” Chalmers said in an ABC interview on Tuesday.
The Treasurer went on to explain that the $1.6 billion number is a “conservative” estimate, based on the assumption that eligible businesses would only claim an eighth of what they’re entitled to. The $10 billion figure is a “worst-case scenario”.
“If they claim everything they’re entitled to it would be more than $10 billion a year,” he said.
Shadow Treasurer Angus Taylor took to Sky News later that day to dispute the Treasury’s costings, claiming the proposed incentive would cost a much more conservative $250 million.
“We’ve had this policy costed by the Parliamentary Budget office,” said Taylor. “It’s under $250 million. We’ll put out the detailed costings in advance of the next election, but it’s nothing like what he’s talking about.”
An actual costing would likely depend on the specific design of the policy, which hasn’t been detailed in full by the Coalition yet.
Amid the usual political back-and-forth, ISB has been asking small-business owners what they’re really voting for in the upcoming election. They want relief in terms of red tape and support with R&D, learning, and technological innovation. Facing rising business expenses, many are also asking for a more balanced tax system and greater clarity around tax incentives.
