Melbourne

EDIT: 0. Go and just HIT the booze, have like four beers and a dozen tequila shots. If they sack you for getting drunk at a work function sue their asses into your retirement.

1. Pay and accept it as part of work social life, it's a chance to bond with new colleagues.
2. Go but don't eat anything, claim you're in a bit of debt while being between jobs. Eat your packed lunch on the way to the lunch. Maybe come across as a bit difficult.
3. Refuse to go saying that if they're not paying for the meal or your lunch break they can gargle your fucking nuts.

I reckon I've listed them in order of acceptability and reverse order of what I'd want to do.