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Mooted FBT Changes: More Fallout…

Not unexpectedly, the proposed changes for fleet vehicle Fringe Benefit Tax has had more fallout, with Kevin Rudd stating that the current Opposition leader, Tony Abbott, will kill the flailing Australian car manufacturing industry by allegedly cutting government funding whereas Mr Abbott claims that his propos479063-ford-australiaed tax cut policy will actually help: http://news.drive.com.au/drive/motor-news/coalition-rules-out-further-funding-for-car-industry-20130822-2sdgb.html and http://finance.ninemsn.com.au/newsbusiness/8711026/abbott-will-kill-car-industry-says-rudd

It’s a sad offset of our current pre-election situation that neither side really actually appear to be truly interested in helping Holden and Toyota continue whilst also easing Ford’s slide into full importation. There’s already automotive unrest with one major Sydney based dealer advertising cars once intended for fleet buyers being made available for the private buyer at fleet prices while the Australian Salary Packaging Industry Association is also hitting out with online ads asking “who’s next”. There are some that claim the changes are good for the industry, which may be all well and good but the effects are tangible already with real and confirmed job cuts. With our economy at a standstill, pretty much pending the result of September 7, Aussie families don’t need this extra burden.

On a lighter note somewhat, a couple of Holden designers have been beavering away behind the scenes on what could be a new Monaro. Based on a combination of VE and VF smarts, it’s a design study, at this stage and highly unlikely to see real world production.

What do you think?Holden-VF-Monaro-1

28 comments

  1. Ian says:

    I am pleased to see the removal of an inefficient subsidy to old technologies. The taxpayer should not have to subsidise a scheme that encourages the burning of fossil fuel.

    These companies should be innovating not sheltering behind subsidies.

    August 28th, 2013 at 3:33 pm

  2. Faye says:

    Agree.

    August 28th, 2013 at 8:30 pm

  3. Janette King says:

    For quite a while I was wondering why people who travelled more kms should be rewarded with a higher level of FBT deduction. I thought if anything it should be flat across the board, or perhaps as incentive, higher for those people who drive less distance. This would be in keeping with our desire to have a more sustainable future. Less polution in the air with less milage. To do this would increase the number of leases that would be taken out and possibly increase the number of vehicles sold. A win, win situation. I think that more expensive vehicles have been getting a cushier time with more usage. About time it changed. Take it further and make it opposite to how it was and then perhaps, those that carpool etc. and do less milage will be rewarded.

    August 28th, 2013 at 3:35 pm

  4. Faye says:

    Agree totally.

    August 28th, 2013 at 8:31 pm

  5. Dean McCarroll says:

    Love the possible new Monaro.

    I had one before and would buy this today if avaialble !

    August 28th, 2013 at 3:44 pm

  6. Lee Strauss says:

    The day Rudd made his announcement on FBT, is the day he lost my vote. Maybe the Goverment could modify the FBT rules further to encourage people salary sacrificing for a car to buy Australain.

    Surely we don’t want to loose this entitlement and the job that willmgomwith it, then again I remind that I wrote something very similar when the government of the day removed working lunch as a tax deduction.

    Australian salary packaging industry may well be right ….Who Is Next?

    August 28th, 2013 at 3:50 pm

  7. Faye says:

    This made a difference to you? Sounds like self interest to me.

    August 28th, 2013 at 8:32 pm

  8. Bill says:

    Why should taxpayers subsidise people who get a car as a perk. All they really need to do is justify their car use. Not that hard, really.

    August 28th, 2013 at 10:01 pm

  9. Lori says:

    How can having to prove (once every 5 years) that you make business use of business vehicle be burdensome? If it is going to “ruin” the industry, motor or salary sacrifice, then that industry is living a lie, is built on fraud, and principles of both accountable government and good capitalism say it should not survive. If there is a good product and demand, it will survive without government slush.(1 novated lease car, one company car owned outright)

    September 3rd, 2013 at 9:29 pm

  10. Grant Williams says:

    I still struggle to understand why some can get their vehicle effectively subsidised by the rest of us tax payers. Do not have the same outrage as others as this would level the playing field. And how hard is it to keep a log book for 12 weeks once ever 5 years.

    August 28th, 2013 at 4:19 pm

  11. Kenneth Smith says:

    Anyone who buys an Australian built car is being subsidised by the taxpayers.

    People who obtain cars by novated lease get a tax rebate based on the percentage of use that is on behalf of their employer, who funded the lease of the vehicle on the basis of salary sacrifice. So in fact such users are not being subsidised by the taxpayer, There is a subtle difference that some people cannot recognise – they are usually socialists and people who see no harm in the government dishing out taxpayers money on social welfare free dental, free medical and what ever other worthy socialist cause they can think of.

    The thing that all people, especially voters should be aware of is that the Government has no money, it is the peoples money, and it should not be wasted.

    August 29th, 2013 at 11:10 am

  12. Clive Ferguson says:

    Whilst I agree with the suggestions above with regards favouring the minimalisation of fuel burnt, I also believe salary sacrificing provides an ideal way of boosting the local car manufacturing industry. It just requires salary sacrificing to be restricted to locally built cars (i.e. more than 50% local content). As long as salary sacrificing is still left as a worthwhile tax saving mechanism that would considerably help the local car industry. It should be noted that unlike the UK and US, the Australian car industry (including suppliers) is the single dominant employer of engineers in the manufacturing sector and that probably means it is also dominant financially. (The US and UK also have aircraft and ships and a few other main manufacturing industries.)
    I also believe it is time to review import tarrifs on cars in line with other countries. Our very low import tarrifs reduce the attractiveness of international car companies manufacturing here and also the attractiveness for other countries agreeing on free trade agreements with us.
    Incidently I have never been employed in the car industry and have no diect pecunary interest in these suggestions. I just don’t want us to become totally dependent on mining.

    August 28th, 2013 at 4:28 pm

  13. Kenneth Smith says:

    The Labor government has effectively given taxpayers’ money to multinational companies in exchange for non enforceable agreement by the Motor Industry to maintain inefficient low volume manufacturing of motor vehicles in Australia, thus contributing to the bottom line of Ford, General Motors and Toyota.
    If the frequent grants to these manufacturers was like real capital investment and gave the Australian Taxpayer a dividend for their investment then there could be some justification, but it is little more than a gift with minimal strings attached.

    At least Holden has shown some smarts by manufacturing a smaller more fuel efficient vehicle in Australia, but by and large Ford and Holden have put all their eggs in the large car basket when the majority of buyers were in the small to medium sized vehicle sector.

    August 28th, 2013 at 4:34 pm

  14. Graham says:

    Subsidies and tax handouts should be targeted at cutting edge technology, not 20th century fossil fuel burners.

    August 28th, 2013 at 4:48 pm

  15. Tim says:

    People travel kilomters and lots of them usually according to their occupation or the distances they have to travel, ala people who lve the country a hundred k’s from the nearest town etc. Only a fool believes that people drive lots of extra kilomters just for some slight FBT benefit. Sure some people who were very near the limits may have done this but they were very fiew.

    What concerns me is that people believe the government drivel that they changed the FBT allowances relating to kilomters because people were deliberately driving thousands of extra kilomters for some minor tax benefit that was actually less than the extra cost in petrol and wear and tear etc.

    The government only does things for financial reasons and once they decide what money they want from you then they set about trying to sell an idea to get as many people as possible to buy into that idea and more gladly pay taxes. As usual the last laugh is on the voters who get sucked in.

    August 28th, 2013 at 6:52 pm

  16. Robin says:

    I think there are much more important issues than supporting the car industry in general and fringe benefits in particular. Let’s stop focusing on ourselves and support the environment and vulnerable people throughout the world. This means look after Aboriginal Australians (initially by listening to their solutions) and asylum seekers and increase foreign aid.

    August 28th, 2013 at 6:58 pm

  17. jamie says:

    BRING on the new monaro !!!!!!!!!

    August 28th, 2013 at 7:07 pm

  18. Keith says:

    The FBT is a poser. Could have had cars on novated lease but didn’t want to be tied to having to do the km’s to get the benefit. I believe it is better value to own the car but then the prices of used cars has gone through the floor largely due to the numbers or ex-lease vehicles about and I agree, we should not be encouraged to do more km’s and use more fuel to obtain a financial advantage

    Monaro looks great, may buy one. Should have a crack at a new Torana too, would buy one.

    Cheers

    August 28th, 2013 at 9:17 pm

  19. Johann says:

    Do support local manufacturing but don’t support the inefficeincy (in production costs driven mainly by wages and fuel consumption that the big V6s and V8s bring). None of the two political leaders make any sense in protecting the manufacting industry (both seem hell-bent on destroying it) and they visibly dmonstrate a disregard of our taxes, that is the public money for which they are only the custodians.

    The debate is hopelessly to intellectually shallow – perhaps this is indicative of deeper problems we have in our society.

    Our kids will hold us accountable for this deplorable situation.

    August 29th, 2013 at 12:30 am

  20. Doc says:

    If the Australian manufacturers could actually build a quality product with thw latest features and technology they would not be in this position, once upon a time a Hyundai was a throw away plastic hairdressers car now they are one of the most technologically advanced cars offering great value for money and you only have to look at the manufacturers warranty to gauge confidence in their product. As a true blue Aussie its sad to see and say but operating a small fleet business why would I buy a Holden Malibu built to a budget when I can have 3 times the car at a third if the price. It doesnt matter how many times you kick a dead horse it won’t win a race. All Aussie manufacturers sold themselves out with foreign parent companies so the Australian wages & quality is not worth it. No more bail outs offer loans to the industry and scrap the dole & maybe Aussies will once again take pride in workmanship than sitting back waiting for handouts.

    August 29th, 2013 at 2:05 am

  21. Mark says:

    I have leased my last two cars as a novated lease. It has given me the benefit of being able to afford a new car and drive safely to and from work in a reliable car (I drive 60kms each way). The previous change to FBT was a good thing as it no longer encouraged drivers to do the magic 25,000 kms per year to reap a good benefit, the flat rate definitely a good idea. However, now with you having to fill in log books it will mean alot of drivers such as myself it won’t become economically viable. This will mean I will not lease another vehicle and hence not purchase another new vehicle but rather keep my exisiting one for a few more years. This means a few things to the economy:
    1. The salary packaging companies loose business = loss of jobs
    2. Dealers sell less cars = loss of jobs
    3. Manaufacturers sell less cars = loss of jobs
    4. Older vehicles stay on the roads longer = potentially hence higher emissions than the improved new models and higher safety risks (new vehicles have better safety features). Also it could mean that second hand cars become rarer, pushing prices up and less afforable for our younger drivers starting out who can now get their hands on a good 3-4 year od vehicle in good condition

    See where I’m gong with this. Rudd has definitely not thought this through and trying to take away a benfit on the one had will actually end up costiong the govermment more in supporting all those peoplse who loose jobs. Good one, you’ve lost my vote Rudd.

    August 29th, 2013 at 9:24 am

  22. Kenneth Smith says:

    Right on the nail Mark

    Rudd’s attach on leased cars was a simple revenue grab.

    6 years of Labor Government has seen a blow out of Government spending with little benefit for the people of Australia, while their hand outs to the Motor Manufacturers has been a cash grant to multinational companies with very little in return for a sizable pile of the people’s money.

    Holden’s production of the Cruze is a belated recognition that the market for large gas guzzling cars is diminishing, bur it is too little too late. 56% of Cruze sales are to private buyers which caries a message that Ford and Toyota ignore.
    If Ford and Toyota had any real long term commitment to manufacturing cars in Australia, the they would have built in Australia the models with higher volumes such as the Toyota Corolla, and Ford Focus.

    August 29th, 2013 at 11:34 am

  23. Todd says:

    Agree with Mark, these changes are killing the car industry. Next peoples will be complaining there is no local car industry jobs

    August 29th, 2013 at 9:43 am

  24. Bill Buchanan / cvresume1@optusnet.com.au says:

    It is time that we start to favour Australian based industries and, even if it disadvantages importers, we should make ‘Australian Made’ cheaper. Subsidies are all very well and they have benefits well beyond the automotive industry. However we do need to continue to cut costs and increase competitiveness – lowering wages is not the answer to what us, overall, a very complex business (incomes everywhere are inflated – try getting a dental specialist, house prices are getting beyond affordability, national interests are subordinated to political and personal targets, etc.).
    All levels of government should be obliged to buy Australian automotive and engineering equipment – or that with the most Australian content. It would be good, but unlikely, if private enterprise did the same – egos would often getting the way of this.
    lets hear more on how we can stimulate buying Australian and be informative on the wider benefits that would accrue to all of us = individuals as well as all sizes and shapes of business.

    August 29th, 2013 at 12:32 pm

  25. Henry says:

    Let the inefficient car build industry go the way of the steam train. The min B/E for efficient mfg is in the order of 400k units p.a., and our small industry is far, far short of that mark. [Hyundai Ulsan plant in Korea produces 1.5mil units p.a.] No more subsidies. The employed workforce is diminishing due to lack of thru-put, et al. Retrain the workforce displaced by this changed economic event and move on. Mitsubishi still operate in AU and sell a large number of vehicles successfully. Ford will do the same eventually and we the buying public will be better off.

    FBT is an inefficient tax originally targeted at suits. Scrap the lot. Jettison tariffs and let the market settle new car sale prices – we will end up with cheaper new car prices for better quality and featured product. We pay heaps more for our new cars down here than the equivalent in other countries of the world. When the Ford exit settles, Ford will import the necessary product at competitive costs to eat GM-H’s lunch!!! If I were the blokes running GMH I would be scratching around for savings and subsidies too!!

    August 29th, 2013 at 1:34 pm

  26. Ben says:

    Mark is spot on!
    Rudd’s tampering with the new proposed FBT rules will be the nail in the coffin for the Car Industry here. Why keep giving handouts to the industry when you are going to destroy it with the FBT tax changes? Just a grab for some votes but a big loss of jobs rocketing throughout the car industry and related spin off jobs. Just unbelievable! “Who is Next” is worth visiting.

    August 29th, 2013 at 2:36 pm

  27. Paul Hamilton says:

    The Australian car industry is a farce! So called Australian vehicles are made with top management positions seeming to come everywhere else other than Australia, but do come from America, Japan. It is not wholly an Australian car industry, certainly employees are Australian, but designs etc I am not really sure about whether Australian or from abroad? In australia we do not have the variety of vehicles of overseas, specialist companies have to import vehicles to be compliant with ADR but they are not readily available to the Australian public. Even though after market industry is a big for the so called Australian industry. Politics should not be a factor in the car industry. The Australian car industry has been governed by people from overseas and they dictate what and if Australia gets failed designs from overseas, not top spec vehicles that are available overseas.

    August 30th, 2013 at 7:15 pm

  28. Greg says:

    I have a novated lease on a new car. I drive 80 km a day to and from work. If I have to keep a logbook for three months, then that’s what I’ll do. I have to keep records for everything else I claim, so why not for my FBT? How can providing proof of legitimate claims “decimate an industry”? Unless the industry was already so rotten with rorting that most of it’s business involved illegaly claiming benifits…

    These complaints just sound like an excuse for Labor-bashing -which is fine. Free country and all. But why dress it up as something else?

    September 2nd, 2013 at 9:03 am