FBT "a tax on road safety" AAA

Road safety experts have warned changes to company-car tax rules could have an impact on road safety as buyers shift to smaller, cheaper and older cars. "This is a tax on road safety," said Andrew McKellar from the Australian Automobile Association, the not-for-profit body which represents 7 million motorists via motoring clubs.

While stopping short of saying the changes to Fringe Benefits Tax regulations will cost lives, McKellar said: "There’s no doubt in my mind this will have an adverse impact on road safety."

"You cannot increase the tax rate on company vehicles -- which have the most advanced safety features -- and not expect to have an adverse outcome. It is absolutely a step backwards for road safety."

Leasing experts have warned that many of the 320,000 company-car purchasers each year will simply switch to cheaper, smaller or used cars to avoid the new FBT requirements.

Near-new ex-government and fleet cars are a primary source of affordable vehicles for families. But with fewer company cars being turned over there won’t be as many on the used-car market.

"The flow-on effects of this policy are massive," said McKellar. “There is a strong likelihood people will defer purchases of new cars. And fleet vehicles are a key source for the used car market. They effectively make near-new, safe cars affordable to the mass market and a lot usually end up being bought by families.”

The not-for-profit Australasian New Car Assessment Program (ANCAP), which has measured the crash test performance of new vehicles for the past 20 years, has also expressed concern about the impact of FBT changes on road safety.

ANCAP chief Nick Clarke said he is "concerned that any drop in demand for new cars might discourage the purchase of safer vehicles. [It shows] policies on seemingly unrelated matters can have an unintended impact on road safety."

This reporter is on Twitter: @JoshuaDowling