Everyone loses. Who’s next?
Find out what you can do to stop the changes to FBT.
On 16 July, the Rudd Labor Government announced unexpected changes to the Fringe Benefits Tax (FBT) for cars.
For many, the announcement will bring an end to the current arrangements for salary-sacrificed and employer-provided cars that have not only helped to drive the local motor vehicle industries and Australian economy, but made it more affordable for hundreds of thousands of hardworking Australians to get a new car.
The changes will have a significant impact on new car sales. Modelling by Deloitte Access Economics Pty Ltd and Lateral Economics in response to the Henry Tax Review (March 2009) calculated that around 21% of new vehicles sold in Australia are benefit vehicles.
With 1.1 million new vehicles sold annually in Australia,1 the resultant fall in demand for new vehicles will be felt right across the already strained motor vehicle industries. With job losses already on the rise, and more to follow, who’s next?
The changes will mean an increase in the cost of living for hundreds of thousands of Australians who have relied on the current FBT arrangements.
The changes also put further pressure on community services and healthcare organisations that depend on the current arrangements to assist with the recruitment and retention of staff, and the delivery of essential community services.
Their employees, who drive a leased car – nurses, charity workers, teachers, healthcare workers and more – will be directly impacted as a result.
While not yet legislated, the change, which was announced without public consultation, has led to economic uncertainty and job losses.
The knock-on effect means everyone loses. Make your voice heard so you won’t be next.
1Source: Annual car sales, VFACTS, December 2009