Peak SA business body calls for Fringe Benefit Tax to be scrapped

The Australian government is being urged to eliminate the Fringe Benefits Tax (FBT) for struggling South Australian cafes and restaurants in Tuesday's Federal Budget.

Business SA, South Australia's peak business body, has requested that businesses be exempt from paying this tax in order to increase the local economy during the pandemic.

Chief executive of Business SA, Martin Haese said it would give South Australian businesses "a shot in the arm" and it will have immediate benefits for the thousands of business owners in SA. 

“Not only will it help the hospitality businesses but it will have a roll-on affect for supply chains and other businesses serving our restaurants, cafes, bars, hotels and function centres [are] all set to benefit too." Haese said.

Mr Haese said the Federal government would receive $14 million less in FBT revenue if this were to happen.

"This is a relatively small price for the Federal Government to pay to protect more of the 61,000 jobs of South Australians employed in the hospitality industry," he said.

Cono Gorgone, owner of an Adelaide restaurant said due to the pandemic, his business has cut approximately a quarter of its staff, but a Federal Government FBT exemption would help soften the blow of the 40 per cent reduction in customers walking through his doors. 

"The time is now and we've got to do it before there's a catastrophe with all the businesses in South Australia and Australia who are suffering because of COVID-19," Gorgone said.

"A 200-seat restaurant would have to go to 90 seats because of the social distancing.

"That means instead of making what a normal cashflow would be at 100 per cent, we'd really be running at 50 per cent."