Now I know all that about the cost shifting between the states and the federal government involved in the FBT rort (I know, Sinc, but please, most people would call this a rort) for employees of public hospitals, not-for-profit hospitals, ambulance services and “charitable institutions whose principal activity is to promote the prevention or control diseases in human beings”. (Hey, Cats, maybe we should set up one of these charitable institutions?)
And, yes, some salaries would have to be adjusted upwards for the loss of the benefit.
But let’s face it, there is no rationale for the continuation of this arrangement, which needs to be phased out over time.
But even more egregious is the exemption from the fringe benefit cap for meal entertainment and entertainment facility leasing expenses.
I kid you not, there are workers in this institutions who pay for their weddings or their children’s wedding entirely tax-free. How can this meet any sensible test of public policy?
But get this:
The fringe benefits tax exemption on these items is unlimited and amounts do not count towards individual caps.
Indeed, many of the salary packing firms conveniently offer the covered members a separate meals debit card which can be used for all manner of expenses as long as it is connected with meals and entertainment leasing.
And here’s another little game that can be played: pay for everyone’s meal on the card and get your mates to give you cash. In this way, the benefit can be further extended.
Just in case you think that this sort of stuff doesn’t cost the general taxpayer much, in 2014-15, the estimated cost is $465 million, rising to $545 million in 2017-18.