ScoMo, lose the fringe!
In 1985 Bobby Hawke (excellent Beer Drinker) was sheriff. Riding shotgun, was his Armani suited deputy, Paul Keating. Together they performed the finest double act in Australian political history. Sweeping reforms forever changed the political and economic landscape in Australia, for the better.
Fringe benefits tax (FBT) was introduced and the hospitality industry changed overnight. We collectively screamed ‘blue murder’. ‘This will kill us’ and for some it did. Little John Howard heard our cries and pledged to repeal the regressive tax “lock, stock and barrel”. Vote 1 Liberal. He didn’t. He chose to keep the majority of the dynamic duos reforms in place and then raise the stakes. Riding high on patriotism, a strong economy and in the wings of the Sy-de-ny Olympics, he dropped a broad based consumption bomb. On the first day of July, 2000 a bouncing baby tax was born. Welcome to the world, GST. Government revenues soared, we put our prices up 10% and soldiered on.
We’d forgotten about FBT. It was just another in a deep pool of taxes that have impacted our industry, disproportionately. You want to hear the best part? It doesn’t raise any money! Companies simply took back the corporate cards, or put them behind glass to only ‘break out’ in case of emergency. There is no tax to raise on spending that doesn’t happen. Here’s a novel idea. Dump FBT. Encourage people to spend. Encourage companies to reward their staff. Encourage people to go to lunch. Stimulate the economy by removing the flared pants out of your tax wardrobe. Let us, serve you. Let our chefs, cooks, sommeliers, waiters and bar staff serve you. Let our suppliers serve you. Then you can pay the bill and I will pay the government the remaining string of taxes that you leave in place, including GST. At least there will be a bill on the table to float us while we work out how to turn sales back in to profits.
FBT is out of fashion in a 2020 post COVID-19 world. It doesn't fit anymore. Throw it away. Oh, and lose the fringe.