A Coalition initiative to provide businesses with $20,000 in tax-free staff meal allowances has quietly been dropped from the party’s federal election campaign, with business leaders acknowledging it was an easy target for criticism, and insiders conceding it diverted attention from the Coalition’s core cost-of-living messaging.
First announced in January as a boost for small and medium-sized businesses and the hospitality industry, the policy received only a brief mention from Peter Dutton during the Liberal Party’s campaign launch — its first appearance in the campaign’s opening three weeks.
The decision to sideline the measure comes after a series of policy backflips, including Mr Dutton’s reversal on a federal public sector work-from-home policy, for which he publicly apologised, and a shift in rhetoric around nuclear energy. Under pressure from the rising cost of living, the Coalition has reframed its energy plan as a “balanced mix” of renewables, gas, and nuclear.
While the tax-free staff meal policy remains listed on the Liberal Party’s website and was mentioned in Dutton’s budget reply speech in March, it was left out of the “Priorities of a Dutton Coalition Government” document on the party’s policy platform.
A Liberal MP admitted the measure didn’t address cost-of-living pressures and therefore was no longer a campaign priority. Party headquarters declined to comment on the policy’s status.
Senior figures in business advocacy groups told the ABC the tax-free meal initiative was poor optics during a cost-of-living crisis and too easily dismissed by Labor. Two Liberal backbenchers added that the policy wasn’t resonating with voters during doorknocking.
On Good Friday, the Coalition unveiled a fresh small business policy package that excluded the meal allowance proposal but included new tax offsets for start-ups, allowing them to pay tax on just 25 per cent of their first $100,000 in income.
A Clumsy Policy Rollout
The policy’s launch was mishandled, with the Coalition initially claiming businesses could deduct up to $20,000 in “meal and entertainment” expenses, excluding alcohol. Labor quickly branded it a “farce,” suggesting it would allow tax-deductible golf trips. The Coalition later clarified it applied to meals only.
In February, Treasurer Jim Chalmers asked Treasury to assess the policy’s cost, estimating it would cost at least $1.6 billion annually — a figure disputed by Shadow Treasurer Angus Taylor, who cited Parliamentary Budget Office costings placing it at roughly $250 million a year.
Luke Achterstraat, CEO of the Council of Small Business Organisations Australia, expressed disappointment that the policy became politically divisive, arguing that staff meals and client lunches are legitimate business expenses deserving tax consideration.
Meanwhile, the Coalition has placed greater emphasis on its $30,000 instant asset write-off for small businesses, which exceeds Labor’s $20,000 threshold.
Mr Dutton has recently turned more attention to his nuclear energy agenda, making appearances in places like the regional NSW seat of Paterson, near the site of the now-closed Liddell Power Station, which the Coalition proposes to convert into a nuclear plant. However, he’s faced criticism for not visiting any proposed nuclear sites directly, responding that it would be impossible to meet every Australian.
The party also abandoned its policy requiring federal public servants to work from the office five days a week after concerns it risked alienating women in the workforce. One Liberal MP admitted the policy was a “silly idea” causing significant damage.
Labor, too, has reversed course on key policies — removing all references to a Makarrata Commission from its platform, despite Prime Minister Anthony Albanese’s earlier commitment to establish the First Nations truth-telling body after the 2022 election. In March, Mr Albanese explained that funds for the initiative had been redirected towards economic empowerment programs.
