AHA VOICE
Why the government needs to freeze Fringe Benefit Tax During the worst year in living memory for our industry, the Australian Hotels Association and partners at Tourism Accommodation Australia have been working to keep member issues at the forefront of policy makers minds in Canberra. Each state has its own unique set of circumstances and the differences between them sometimes seem to widen each day. TAA and AHA’s state CEOs and Presidents have worked tirelessly on localised responses in each state and territory and the whole organisation has been working toward nationwide solutions. Our efforts to open hospitality
negotiate agreed flexibilities with the United Workers Union in relation to the Hospitality Industry Award. This commonsense approach was recognised by the Attorney-General in the Federal Parliament.
Stephen Ferguson CEO, Australian Hotels Association
venues and accommodation hotels as soon as possible and gain extra support for those still caught up in the pandemic have been critical. We all know it has been a tough year, but we have chalked up some successes against all the odds. When it comes to the important area of industrial relations, we moved rapidly to
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AccomNews - Spring 2020
Regarding JobKeeper, we were successful in securing a sixmonth extension of the scheme. Success has many fathers, but Treasury acknowledges the AHA submission and other weekly sector specific data we provided at the time helped win that argument. We offered solutions not just complaints. And backed it with the financial resources of our associations. The modelling done by Ernst & Young laid out the actual case for continued support in crystal clear terms along with stats and forecasting reiterating how far behind we are trading in all states.
attract FBT), leaving hotels and restaurants to suffer. The benefits of a removal of the FBT are obvious. Economic modelling by EY shows: •
Impact on GDP, ranging from $408m to $850m.
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Impact on employment FTE, ranging from 2,911 to 4,230.
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GDP per dollar of cost to government, ranging from $1.89 to $3.81
There’s no doubt changes to FBT on meals and accommodation would benefit members, see an increase in the number of business meals in Australian hotels (create jobs in the struggling hotel industry) and, by extension, provide a boost to the Australian economy when it needs it most. •
With hotels experiencing substantial downturn in sales, venues closing, unemployment modelled above six percent for years to come and consumers’ ability and/or willingness to spend curtailed, removing the FBT makes common sense. It would:
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Stimulate the hospitality, accommodation and tourism sector and assist in its recovery.
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Protect existing jobs and create new jobs.
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Increase profits and taxable incomes thereby increasing tax revenue.
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This will give a much-needed boost to hospitality and stimulate recovery as the FBT unfairly penalises members and increases compliance costs.
It would benefit other small businesses – for example tradies, builders, and hairdressers, allowing them to shout good staff members a meal or weekend away.
Since 1986, meals at hotels have attracted an FBT of 46.5 percent and, in the meantime, those at the big end of town have long since shifted towards their own boardrooms to continue corporate lunches (which don’t
We will keep you posted on the efforts to remove the FBT and be assured, we will continue to chase further relief while this pandemic continues – particularly for our hard-hit members in Victoria.
After the initial JobKeeper extension was announced, the AHA went back and helped secure further easing of the Business Turnover Test and extension of the Employee Eligibility start date to July 1. We then turned our attention to commercial areas such as the Commercial Leasing Principles, bank deferrals and insolvency COVIDSafe harbour provisions. At the time of writing, with murmurings of a federal election at the end of next year, we are focused on our request to suspend the Fringe Benefit Tax (FBT) for three years on meals and accommodation expenses (we are not seeking to remove it on alcohol).
INDUSTRY
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