Subsidised meals and weddings: shut.this.down

download (15)download (14)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.

SHUT.IT.DOWN.NOW. JOE

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27 Responses to Subsidised meals and weddings: shut.this.down

  1. Alfonso

    ” $465 million, rising to $545 million in 2017-18.”

    Oh, a “new hospital” a year.
    Gotta luv those elites and their tax system.

  2. Marko

    The limit, in WA anyway, is $10k for meals and and $9k for other salary packaging. Grossed-up that is $35k that the State Govt would otherwise have to make up- so it makes perfect sense from a State viewpoint.

  3. Judith Sloan

    WA government is short changing you; there is no limit on the meals allowance.

    Certainly, in Victoria, if you work for more than one hospital you can bet the grossed up deal for each hospital at which you work (all doctors virtually).

    So there are some highly paid specialists who pay virtually no tax.

  4. Roger

    So there are some highly paid specialists who pay virtually no tax.

    We can’t afford a GP co-payment but we can afford this?

    Why isn’t the AMA on to it? Oh wait…

  5. Pacioli

    On the subject of FBT rorts, what about the exemption for child care facilities on business premises? Great if your employer has one of these.

  6. Bugme

    Oh please these highly paid doctors can earn more then 5 times as much working in private from away pubic holidays.
    I usually like your work Judith but not in this case, as a disability worker on $22 per hr for being spat on, punch, kicked and threatening the salary packing does add a little to the job. In a $1trillion dollar budget this is what your are handing your hat on first. Very disappointed indeed

  7. Lem

    So there are some highly paid specialists who pay virtually no tax.

    Really?

  8. jupes

    I usually like your work Judith but not in this case, as a disability worker on $22 per hr for being spat on, punch, kicked and threatening the salary packing does add a little to the job. In a $1trillion dollar budget this is what your are handing your hat on first.

    This is a typical whinge from someone quite willing for savings to be made elsewhere but wanting to hang on to the ‘free stuff’ they have been receiving from the humble taxpayer.

    Yes, very disappointed indeed.

  9. Elizabeth (Lizzie) B.

    It seems that Labor-luving Doctor’s Wives know where their marriagable daughters’ bread is buttered. Pity the Libs are the same. This is a rort. Entertainment ‘facilities’ should be disallowed. That at least should not be too hard to do; restricting a meal allowance to meals that have some relationship to work.

  10. Johno

    My wife has one of those meals debit cards. She calls it monopoly money and keeps insisting we go out for meals because we aren’t paying any tax on it. I regard it as my patriotic duty to use the card as much as we can to keep as much money as we can out of the clutches of government. If Tony and Joe get their hands on it, it will only be wasted.

    Judith. I think you should reassess your opposition to these cards. They are good for Australia. Not to mention the food and hospitality industry. 🙂

  11. mundi

    In QLD many public can salary sacrifice to pay for THIER OWN MORTGAGE!!!

    they are literally paying for thier homes with before tax money… The idea no justification for this at all, its simply a con to make thier take home salary lower so they can claim they are paid less than the private sector.

  12. Combine Dave

    My wife has one of those meals debit cards. She calls it monopoly money and keeps insisting we go out for meals because we aren’t paying any tax on it. I regard it as my patriotic duty to use the card as much as we can to keep as much money as we can out of the clutches of government. If Tony and Joe get their hands on it, it will only be wasted.Judith. I think you should reassess your opposition to these cards. They are good for Australia. Not to mention the food and hospitality industry. 

    If closing this loop hole was to be linked to cutting taxes in general I’d support it.

    Cutting tax breaks and broadening taxes is garbage policy if Abbott and Hockey are just going to keep spending big.

  13. Alfonso

    You “as a disability worker” who likes tax rorts that I pay for can say “thanks Taxpayer” and mean it, a little more often. Small shrines in public parks with incense and offerings of fresh fruit to the Taxpayer should be maintained by the takers.

  14. .

    Thank you for bringing this to light, Judith.

    Few would have ever heard of this absurd rort.

  15. boof

    Acoss and oxfam which spend their time advocating to government should not be charities,, also remember the kerfuffle about cuts in payments to the homeless organisations, they all shut up when it turned out all these organisations didn’t actually do anything for the homeless other than lobby government.

  16. rebel with cause

    We claimed our wedding and honeymoon tax free. Starve the beast is my policy. I fully support this ‘rort’ being extended to others.

  17. Rabz

    Bluddee hell – the Mantra™ is mutating.

  18. Alexis

    Pray tell what the extra $500m of government revenue would be used for.

  19. notafan

    Unintended consequences and tax effect skewing spending decisions.

  20. Amused

    That at least should not be too hard to do; restricting a meal allowance to meals that have some relationship to work.

    How would I go claiming all the money I spend on food that is consumed at work?

  21. Bracky

    In the NSW public health system, at least, half of the calculated tax benefit from meal entertainment and other salary packaging schemes is taken as a pay deduction from the employee and treated as general operating revenue by the hospital.

  22. Bugme

    This is a typical whinge from someone quite willing for savings to be made elsewhere but wanting to hang on to the ‘free stuff’ they have been receiving from the humble taxpayer.

    Yes, very disappointed indeed.

    Not at all…….I am saying that over 50% of Australians don’t pay tax at all. They are a net benefit of all the government handouts etc. Don’t get me started on corporate welfare, handouts , regulatory changes. I am saying is this the most pressing place to start???? I think not.

  23. Pray tell what the extra $500m of government revenue would be used for.

    Cutting payroll tax by $500m.

  24. Marko

    Bugme-the numbers have been presented here before- only the top 20% of taxpayers pay any effective tax, so along with some royalties and corporate tax, they are the funders of this daft, pathetic and immoral welfare state.

  25. Shelley

    I had never heard of this before reading this blog post. Then I had a coffee with a girlfriend, who is due to get married this year. She was gushing about how she can salary sacrifice here entire wedding, from the food to the accommodation. WTF?

  26. Natural Instinct

    Sutherland Hospital website

    An attractive salary packaging scheme allowing you to increase your take home pay:
    If eligible you can salary sacrifice up to $9094 a year on a range of benefits including your mortgage, health insurance, child or aged care expenses, HECS fees, rent, or self-education expenses. You can also salary sacrifice meal and entertainment costs. Find out more about salary packaging

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