The Australian restaurant and catering industry has welcomed the Federal Government's announcement of a 20 per cent tax break in the new year.
Peak national body representing the industry, Restaurant and Catering Australia , said Australia's restaurateurs and caterers are almost all small businesses and they all have a hefty peak at the end of the year.
R&CA president Peter Doyle said deferring the tax due in the first quarter will ease the cash flow load significantly.
"We were predicting that it would be a significant challenge for many businesses to meet the first payment to the ATO in the New Year," he said.
"Minister Emerson has hit the nail on the head with this act of relief for small business."
The Government last week announced it will defer 20 per cent of all pay as you go (PAYG) instalments on business income due in January and February 2009.
The measure will apply to the estimated 1.3 billion small businesses that generate under $2m in annual revenue.
Australian Small Business minister, Craig Emerson, said the Government initiative will lift the cash flow of small businesses at an important time of the business year.
R&CA said that in the 2007/08 financial year the restaurant, café and catering industry had turnover of more than $15bn. A significant proportion of this was in the second quarter of the financial year.
With a slow down in business forecast in the early new year, R&CA had predicted a significant default rate on tax in the first payment in 2009.
R&CA said it was looking forward working with the Government to provide advice to restaurateurs and caterers as to the mechanics of the relief program.