Lauren Golman of A Current Affair of Australia says that Luke Mangan and Guy Grossi – two of the biggest names in hospitality – are urging the government to cut the red tape.
They’re not asking for a handout, they want change.
“We have a blank sheet of paper, now is as good a time as any to stop and change things,” Celebrity Chef and restaurateur, Mr Mangan, told A Current Affair.
“Aviation, tourism and hospitality hit the hardest, I think, and I think they’ll recover last as well,” Mr Mangan said.
He is calling for a complete overhaul of the payroll tax.
“We get taxed – people that own businesses, small business, get taxed to employ people. If the government are saying ‘jobs jobs jobs’, well let’s get jobs going.
“I’ll say to the government, help me, help you. Because if you abolish that payroll tax, we can employ more people,” Mr Mangan said.
Melbourne based chef Guy Grossi’s also joined the campaign
Mr Grossi has several restaurants in Melbourne – all shut.
“I feel for our farmers who’ve lost income, I feel for our wonderful crew of people that are sitting at home, whether they’re in hospitality or not,” Mr Grossi said.
“It’s very sad that we can see our city in this state at the moment and I feel that any help that’s forthcoming, whether it be federally or from the state government or from council would be fantastic.”
Just like Mr Mangan, Mr Grossi says the current payroll tax needs reform.
“It’s a very high service industry, it’s highly geared to service, so we’re employing lots of people and maybe not making turnovers that justify the payroll tax we’re giving,” Mr Grossi said.
The New South Wales government raises about $10 billion a year in payroll tax, and more than $7 billion is raised by the Victorian government.
Brett Kelly, CEO of listed accounting group, Kelly Partners, says current tax regimes are a handbrake on economic recovery.
“This is a terrible tax for small businesses because effectively it’s a tax on employment. And so what a great reward for a business owner who mortgages their house, takes risks to start a businesses, and they when they employ someone, which is really a community good, they turn around and attacks them for doing that good thing by another person,” Mr Kelly said.
“It really just doesn’t make sense.”
Mr Mangan and Mr Grossi believe the Fringe Benefits Tax should be abolished.
“Being able to go out to entertain clients and get people out into restaurants and make that a tax deduction again,” Mr Grossi said.
“You are taxing people to come and do a deal over a meal… to create more business, to create more jobs in a restaurant rather than doing it in a boardroom,” Mr Mangan said.
“The Fringe Benefits Tax is a terrible tax that was invented really to stop people getting benefits from their employment that they didn’t pay tax on,” Mr Kelly said.
“Now while that sounds fair and amazing, what it actually ends up creating is a situation where people don’t take their staff, their teams, out to restaurants to say thank you.”
The accountant believes the tax at 47 per cent plus is too high, and is stopping economic activity.
Mr Grossi said removing the tax would give CBD’s a much-needed revival.
“We hope that once we get out of this, we can work hard, dig in deep and make it world-class again.”
These tax cut recipes could help save their industry.
“If these small restaurants, small cafes, small wine bars are helped by cutting payroll tax, cutting FBT, and saving on costs on tables and chairs, we’re going to be busier, we’re going to employ more people, and more people will come to our restaurants,” Mr Mangan said.
“It’s not rocket science, is it?”