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FBT: Post election

Abbott car industryNow the Federal election is over and the Coalition have taken pole position, Tony Abbott’s declaration that the mooted changes to the Fringe Benefit Tax will not go ahead is now ready to be checked. And, seemingly, this is the case, according to a communique dated 3 September, four days before the election.

A letter sent to the Australian car industry, its employers and employees associated with it, appears to confirm the Coalition’s determination to not go ahead with any modifications to the Fringe Benefit Tax, as it stands; part of the letter states: “…we encourage all stakeholders, including employers and employees engaged in salary sacrifice programs, to urgently and immediately return to normal trading activity in order to repair the damage done….” and: “…we want to acknowledge the role the leasing and salary packaging industry plays in assisting with new car sales, generating demand and, therefore, generating jobs.”

calculator-image-clipart-9With a marked and measurable slowdown in sales and yards full of cars that were ordered and cancelled, the car finance and leasing industries can look forward to a settling of the market and resume the trading levels experienced over the last couple of years. It also has to be said that the reaction of the car lease industry, with the changes not put into legislation and, for the most part, really only put forward as a change should Labor had won, could be seen as a huge overreaction and ultimately a back ended scare.

Since the change of government, car leasing firms have been rehiring people stood down prior to the election and interest in purchasing fleet vehicles has increased. Danny Wilson, from leasing company NLC said: “We started 23 people back at work this week and we’ll keep an eye on demand, and if that keeps getting stronger we’ll keep improving our staffing levels,” he said.”We saw sales start to return almost immediately after the election – even from the Monday or Tuesday.


”We’re below what we’re normally projected to be at this time but I think we’re trending towards that 75 to 80 per cent mark. In terms of the sales levels, it does take some time for those to work through your system, but in terms of our inquiry levels, we’re up to that 75 per cent mark.”

What has also come out of the change of government was this simple observation from Leigh Penberthy, the President of the Australian Salary Packaging Industry Association: ”With the Liberal government now in place, there is no new law to be passed because there were no changes made to the tax law,” he said. ”Effectively, it’s now pretty much as it was prior to July 16, and I guess the industry has got to get back on with business.”

Simple really; the expectation was that the Coalition would win plus there was no actual legislation put forward, voted upon and passed/denied by the government. Sadly, it has come at an industry cost with Falcon and Territory sales collapsing even further and this is being seen as a contributing factor to the company’s decision to close local manufacturing down. Regardless though, let’s hope it is a return to business as usual.


  1. Mark says:

    The reaction from lease companies was well and truly over the top and in my opinion proves that rorting is common.. and the new rules were needed to catch up with those cheating the system.
    Filling a log book for 3 months every 5 years would be a very small impost for genuine work use vehicle users . I have done this myself even without the rule changes since 2004 … My companies accounts are very thorough and like to do things properly and above reproach

    September 24th, 2013 at 4:22 pm

  2. Mike Reece says:

    The Post Election article demonstrates that perceived self interest is far more important than the facts. The proposed change to FBT legislation removed an unfair element of the Act that allowed people to claim that their vehicle was used for business, when in fact its primary use was private. It cost taxpayers $1.8 billion per year, so that some 350,000 people had an advantage not available to the other 22+ million Australians.
    The revision only asked that that claimants submit usage details for 12 weeks in a 5 year period, hardly onerous and not worthy of alarmist and irresponsible claims by Messrs Abbott and Hockey.
    According to the ABS seasonally adjusted sales were higher in August 2013 then previous month and 1000 units higher than August 2012.
    Leigh Penberthy attempts to rewrite history claiming that the FBT revisions contributed to the closure of Ford, when the decision to terminate production at Broadmeadows and Geelong was announced on 23rd May, some weeks ahead of the FBT announcement.
    So the facts don’t support the article.
    Salary Packaging is a great business and of real value to business users. There is no need to dissemble the facts to secure its future.

    September 24th, 2013 at 6:10 pm

  3. Steve Doyle says:

    Isn’t it good to see that Greed, Avarice & Self interest have prevailled, and that we can now go on rorting the system with impunity. The Log book idea is about some form of accountability, but alas those with the greatest ability to pay have prevailled and will not be held to account. My only question of the Government is; will people who have to catch Public Transport to earn a living be also compensated for travel to their place of Employment ??
    No, I am not a disgruntled worker, I run my own Business and do get advantage of claiming Vehicle expenses, but I still do a Log Book and seperate Business & Private Usage, But I also believe in Fair Play
    steve d

    September 24th, 2013 at 8:53 pm

  4. Steve Doyle says:

    are my comments being Moderated or Sanitised

    September 24th, 2013 at 8:59 pm

  5. Hugh Savage says:

    Thank goodness for common sense. The labor taxes of Envy will not be applied to the hard working common man who salary packages their car. The car Industry is important to Australia and this change to FBT could well have been the icing on the cake, the last straw, that would have closed down manufacturing in Australia as well as reducing us to a service based economy. The skills and development, training, and meaningful employment of thousands of Australians depend on the Auto manufacturing, parts supply, and associated industries in Australia both directly and indirectly. Thank you Liberals for stopping these changes based on envy and greed that Labor wanted to impose on so many little people.

    September 25th, 2013 at 8:47 am

  6. Paul says:

    I agree with Mike and Mark, this is rorting the system by those who have the position and opportunity to do so. I expect many of those are consistent tax advoiders with the ability to do so. I cant understand why any member of parliament would support tax avoidence under any circumstances, especially when past governments threatened jail terms for the lowest paid for avoiding tax by misrepresenting their income.
    It is not difficult to keep a log book for 13 weeks over a five year period unless you are using the car for private use.

    September 25th, 2013 at 12:03 pm

  7. John Aquilina says:

    I agree, for the Leasing companies to have laid off so many staff on the strength of a announced policy rather than legislated law was a huge over reaction. Management took advantage of the situation and made Rudd’s announcement the excuse to cull staff. Another Rudd thought bubble that has caused real people to lose jobs and opportunities.

    September 27th, 2013 at 4:05 am

  8. David says:

    Certainly not Steve. I apologise if we were slow to approve. And your point is well made

    September 27th, 2013 at 4:15 pm