Rudd agrees to meet industry

The Rudd Government has finally agreed to meet with representatives from the car leasing industry -- a week after making sweeping changes to Fringe Benefits Tax regulations which have already cost more than 300 jobs and slammed the brakes on new-car sales.

The head of the Australian Salary Packaging Industry Association Leigh Penberthy door stopped Rudd as he got out of his car during a school visit in Melbourne at lunchtime today.

"I have been trying to get in contact with Mr. Rudd and his office ever since the announcement about the changes to company car tax rules, and I'm relieved that he has finally agreed to meet with us, even if the agreement was only a verbal one."

Mr Penberthy said Mr Rudd's advisers took his details and said they would be in touch soon. "A date is yet to be set but they have agreed to meet."

The development came as car fleet industry accused the Rudd Government of suggesting company-car drivers fudge their logbooks after new regulations came into force last week with a sudden overhaul of Fringe Benefits Tax.

Federal Treasurer Chris Bowen told media earlier in the week: “Within the first 12-month period the individual concerned can pick the three months they want to maximize their chances of getting the maximum tax concession … we would like some evidence that the car is being used for business purposes.”

The car leasing industry has seized on the faux-pas saying if they were to offer the same advice to company-car drivers they would be breaking the law. “If we made an announcement telling customers to be selective, we would be hauled over the coals,” said Nigel Malcolm, Chief Executive Officer of Fleetcare, Australia’s largest independent fleet management company.

“So let’s hear it from the Government. Will the Treasurer indemnify any business or individual that takes his advice and is later prosecuted by the Australian Taxation Office?” Australian Tax Office rules currently say logbook periods should be representative of a company-car’s overall use.

The ATO website says: “A log book must be maintained for a representative period of 12 consecutive weeks during the applicable FBT year, the log book year. “A log book can be used as a basis for calculating the business use percentage for up to five FBT years, being the log book year and a further four consecutive FBT years, provided there is no major change in the pattern of use of the car.

“An increase or decrease of 10 per cent in the business use of a car will generally be considered a major change in the pattern of use of the car.” Fleetcare announced earlier this week it would sack 20 of its 80 staff by the end of this week as a direct result of the changes to FBT rules as novated lease orders all but stopped.

About 300 jobs have also been lost at three other firms, with fears up to 3000 could go if the changes are not reversed. “The truth is that the Government has no understanding how these changes will impact on businesses and drivers,” said Fleetcare’s CEO Nigel Malcolm.

“They’ve made policy on the run, haven’t thought things through, didn’t consult anyone in the industry and have ended up giving questionable tax advice.”
 

This reporter is on Twitter: @JoshuaDowling