Ending payroll tax breaks would be disastrous for the restaurant industry, which has yet to recover from 2008 when dining out plunged 40 percent on average, warned Chamber of Commerce restaurant division head Phil Barnett.“For many restaurants the payroll tax relief initiative probably saved them,” Mr Barnett said. “It’s been the saving grace for many and they felt supported by Government.”Premier Paula Cox on Monday said Government was considering raising taxes and rolling back certain tax breaks as it braces for an up to $20 million revenue shortfall and higher than expected spending of $43 million.She said Government could make more than $20 million in additional revenue if it ended payroll tax relief for hotels and restaurants.But Mr Barnett said fine dining fell as much as 60 percent at some restaurants in 2008-09. And on top of that in the first six months of the year, based on sales and cost of sales, he said restaurants were deep in the red, showing a net loss on average of 2.5 percent of sales.He said restaurants accepted that the payroll tax relief was not permanent, and they wanted to pay their fair share as tax payers, but they desperately needed the concession - which is helping to preserve jobs - at least through 2012 to survive.“This has been an incredibly difficult recession for the industry,” Mr Barnett said.“Restaurants saw their sales decrease yet the majority of their expenses went up. In a normal economy restaurants want to pay their fair share but this is not a normal economy. And not a single person I have spoken to thinks 2012 is going to be any better than 2011, 2010 and 2009.”Mr Barnett said under the concession, the employer portion of payroll tax is deferred and written off, while for hotels, they get both the employer and employee portion deferred and written off. Payroll tax is around 4.75 percent.In her Pre-Budget Report Premier Cox said the hotels and restaurants payroll tax relief will be among the “tax expenditures” reviewed for the 2012-2013 budget.“In 2009, the Government put in place a Memorandum of Understanding for the hotel sector for payroll tax relief,” she said.“In 2010, payroll tax relief was extended to the restaurant sector. This MOU has provided a reduced rate of payroll tax for these industries. Over the duration of this concession, the Government has in effect spent $20.4 million dollars on these tax expenditures.“These concessions were never meant to be permanent and the Government will look to reduce them over the near term.”