Fight against FBT changes continues

The Federal Opposition has vowed to maintain its fight against the Rudd Government’s FBT changes after a meeting with the car industry this morning.

As more job losses are feared in the salary packaging and car leasing industries later in the week, opposition leader Tony Abbott said: “The only way to get rid of [the FBT changes] is to change the government”.

Mr Abbott, shadow treasurer Joe Hockey, shadow industry minister Sophie Mirabella and shadow finance minister Andrew Robb met with 30 representatives from the car industry in Melbourne to further assess the impact of the changes.

Last week more than 300 jobs were lost at salary package firms in three days. The industry fears the number will climb to 3000 within a month unless the sudden FBT changes to company car rules are reversed.

“The impact is only just starting to be realised. The fight won’t go away,” said Andrew McKellar, the head of the not-for-profit Australian Automobile Association which represents 7 million motoring-club members. The leasing industry claims the sweeping changes to FBT rules — which increases the tax on personal use of company cars — were made based on inaccurate data.

The Rudd Government thought the new rules would mostly affect drivers of expensive cars but industry data shows the average cost of vehicles used under the previous FBT rules was $34,750 — and four out of five drivers work in the public sector, including education, emergency services and local, state and federal government.

“The meeting has confirmed our suspicion that treasury got their numbers completely wrong,” said Mr Hockey. The motoring industry is due to meet with senior representatives of treasury Monday afternoon.

“There is no way Treasury could have the correct data because the majority of FBT is collected through post-tax contributions from individual employees,” said Leigh Penberthy, the head of the Australian Salary Package Industry Association.

“They’ve misread the data and the impact it has had on the people and businesses concerned.” The motor industry is due to meet with senior representatives of treasury this afternoon.

This reporter is on Twitter: @JoshuaDowling