Author: Joshua Dowling
The Rudd Government’s changes to Fringe Benefits Tax rules will impact local car manufacturers twice as much as imported brands, a preliminary forecast by the industry’s peak body shows.
The Federal Chamber of Automotive Industries has formally foreshadowed a 10 per cent drop in new-car deliveries as a result of the changes to FBT – which would wipe an estimated $3.4 billion in vehicle sales each year.
But sales of locally made cars by Toyota, Holden and Ford are expected to be dented by 20 per cent, or twice the industry average.
The FCAI made the official forecast as the offices of the Federal Treasurer Chris Bowen and Federal Industry Minister Kim Carr confirmed again today to News Corp there are no plans to reverse or modify the controversial changes to company car tax rules, announced without warning on July 16 and which came into effect immediately.
The changes have already cost 300 jobs in the car leasing and salary package sectors and another 3000 are at risk.
“This is terrible news for car makers – importers and local manufacturers – who rely on volume to be viable in this country,” Federal Chamber of Automotive Industries (FCAI) Chief Executive Tony Weber said.
“The FCAI has undertaken analysis and even more concerning is that when we look at our local manufacturers alone, we expect the drop in their sales to be significantly higher – averaging almost 20 per cent.
“It has already been a very difficult time for local manufacturing in this country. I fear the Government’s decision to change the FBT policy for vehicles could have a dire effect on Australian car production, including the manufacturing supply chain.”
The FCAI said the changes will not impact manufacturers alone, however, foreshadowed a “strong impact … on the entire car industry, including importers, dealerships and finance companies.”
“Once again I call on the Government to reconsider this decision,” Mr Weber said.
The industry is yet to publish official sales figures for July because most dealers do not upload the latest data until the last day of the month.
Official sales figures for July will be released by the FCAI next Monday.