Joe Aston
April 5 2017
AFR
Fast-growing fast food outlet Sumo Salad is quietly making its presence known in Canberra’s corridors – and not just out of altruistic concern over the BMIs of our elected representatives.
The food court noodle box operator is 60 per cent-owned by the $485 million Maloney family, through its private equity firm Tulla Group. Tulla has engaged Bill Shorten’s former chief of staff Cameron Milner to argue for a tax ruling on the application of GST on salad. Already sounds like an episode of Yes, Minister, right?
To Peter Costello’s visible chagrin back in 1999, Meg Lees and John Howard made him exempt fresh food from GST. But a Sumo Salad is subject to the 10 per cent consumption tax because it’s a transformed product. If you stroll into Woolworths or IGA though, and buy a sealed bag of washed lettuce with a few cherry tomatoes in it, that’s GST exempt. If you wander into the local deli and pick up a Mediterranean aperitivo of shaved meat and marinated olives, that’s also GST exempt. As with everything the ATO does, it seems kinda arbitrary.
Sumo has a decent argument, to be fair. But Milner (who, according to the Commonwealth Lobbyist Register, also lobbies for Ardent Leisure, poor bastard) might struggle to get his comrades on side. We don’t think a tax ruling that helps a private equity firm majority-owned by a family on the BRW Rich List flip a youth wage-paying salad bar onto the public market is a cause Labor, under Shorten’s Victor Hugo strategy, will naturally warm to.
What’s more, Labor is on the record as being against competition policy reform (the Nationals’ pet issue, after farmgate prices – especially on milk – have been squeezed so retailers can deflate prices for consumers) because it wants to prevent rises in food prices. “When the government boasts that its latest decision will push up prices, customers should be worried,” Andrew Leigh wrote in Sydney’s Daily Telegraph in March last year (he’s better on supply and demand than the minutiae of the capital market). Shorten and Chris Bowen announced Labor’s opposition to the Section 46 changes on the same basis. Slapping 10 per cent on bags of vegies isn’t going to help!
We’d imagine Treasurer Scott Morrison probably won’t take a view any more favourable. And if ScoMo publicly argues against a reclassification, we highly doubt Tax Commissioner Chris Jordan is going to make a contradictory ruling. Maybe someone should ask him?
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