Now that the state borders are opening and the vaccines are being rolled out, there is a new sense of confidence. It’s time to venture out and get back to business.
As more of us choose to work from home, rather than return to the office, suburban cafés are doing well. Regional tourism is booming. We love eating local. But, that means that the CBD diners are faring less well, as we desert the cities in favour of regional and local places to visit.
We need to encourage people to eat out more, and particularly at the city venues. And one significant deterrent is the Fringe Benefits Tax or FBT.
Introduced by the Hawke Government in 1986, FBT was designed to improve the fairness of the taxation system by stopping benefits other than salary and wages being claimed as tax-free income. Restaurant meals were redefined as a fringe benefit for employees, rather than as a legitimate cost of doing business.
Now – let’s be honest, the tax-deductible meal was probably exploited, with long drawn-out business lunches, often taking five or six hours.
But that was then. The economy was then very different to today. The introduction of FBT hit the restaurant industry hard. Since FBT did not apply to in-house dining, boardroom lunches replaced restaurant entertaining for many companies. And the long boozy business lunch was relegated to the annals of business history.
The problem with FBT is that it defines the business lunch as entertainment. I have to disagree. Far from being entertainment, the business lunch is a vital part of business communication. The sharing of food is an important feature of communication; it is also a fundamental political act and a model of social equality. The act of commensality, or eating together, provides the basis for socialisation in all cultures.
Food is more than just fuel. It is a social experience. The sharing of food is an important human interaction and is often symbolic. The sharing of food is often a ritual and a symbol of acceptance. Feasts cement agreements, treaties and alliances. We patch up quarrels with a shared meal. We join together with family and friends to bond with food and drink. We meet new people over dinner. We seek to woo a lover with a special dinner. We have feasts for birthdays, weddings, religious ceremonies, cultural ceremonies and even funerals. And, we used to discuss business over a meal.
The business lunch is important. It brings different groups of people together, in a neutral environment, without other distractions, and defuses any hostilities. There are rituals. The host usually pays. We don’t get down to business straight away. We need to develop a rapport first. We chat about personal interests, sport, the weather and mutual acquaintances. Once the barriers are broken, we can then talk about the business.
Like chatting around the water cooler, the business lunch lets us talk more openly and chat about the unspoken things. The business lunch is about cementing relationships, establishing trust and creating alliances. This simple act of sharing food with others allows for human beings to cross the ‘us’ and ‘them’ divide that separates many social spheres.
It is time to revisit FBT. Right now, the entire hospitality industry needs a stimulus to keep it from collapsing. The next six months are crucial, as we head into winter. And the CBD venues need more help than others. Removing FBT would help the industry get back onto its feet. Even simply revising the conditions to, for example, exempting small business from FBT or permitting meals under $80/head to be tax deductible, would provide a good reason for businesspeople to eat out again. This might also encourage restaurants to offer better value “prix fixe”, table d’hôte and bistro menus.
And since FBT accounts for less than 1% of government revenue, this will be much cheaper for the Government, and longer lasting, than extending JobKeeper or giving everyone dining stimulus vouchers.
So, let’s bring back the business lunch and support the restaurant industry.
Good food brings people together.
By Jeremy Ryland
Main photo by Daria Shevtsova on Unsplash