Submission to The Treasury on Limiting FBT Concessions for Salary Packaged Entertainment Expenses - 21 Aug 2015

CCA’s submission to the Treasury briefly outlines some of the key issues for Australia’s charity and not-for-profit sector in the proposed changes to the Fringe Benefit Tax (FBT) concessions for salary packaged entertainment expenses.  It says that the proposed cap of $5000 (grossed up) is too low, will cause harm and that any changes must be worked through with the sector as part of a broader package of reforms.

The tax system is not just about an economic exchange, it is part of the fabric of our communities. The provision of tax concessions to charity and not-for-profit organisations has been an important contributing factor in building a strong and resilient Australian community.

CCA has for some time acknowledged the need to reform taxation arrangements including possible changes to the FBT concessions available to employees of public benevolent institutions, health promotion charities and employees of public and not-for profit-hospitals and public ambulance services.  CCA has also consistently argued that any capping of this concession needs to be part of a broader package of reforms, taking into account the impact of any changes on the broader charities and not-for-profit sector, and redirecting savings achieved back into more effective ways of supporting the sector. 

Unfortunately, the way this proposed change has been developed and announced has undermined sector support for the changes.  There has been little or no consultation with the sector.  The rationale for arriving at such a low cap figure has not been made available to the sector.   The need for additional reporting and the lack of any clear intention to reinvest savings into the sector are all factors that need to be addressed in considering the proposed change.

There is no doubt that this change will have some negative consequences across the sector including increased costs and a loss of some good staff.  Given the importance of the charities and not-for-profit sector to our economy and our communities, it is very disappointing that such a major policy change has been implemented in this way without due regard for the consequences. 

The charities and not-for-profit sector has a long history of being proactive and being prepared to engage in wide ranging discussions about reform to taxation and regulation of the sector.  This eagerness to improve the sector and be part of the national policy conversation has not always been reciprocated.

CCA would hope that the commitment to stronger communities and stronger organisations serving our communities will be given a greater priority as this proposed change to FBT concessions is considered by policy makers and the Parliament.  CCA looks forward to being part of these considerations.

Read the full submission: