Whether you’re happy with the results of the Federal Election held on the 7th September 2013, one thing is for certain – The motor vehicle industry is breathing a collection sign of relief.
Many people will be aware that the Rudd Government announced some radical changes to the way fringe benefit tax would be calculated on motor vehicles. If legislated, these changes would have an enormous impact on (not only) the salary packaging industry, but the wider motor vehicle industry. Since this announcement on the 16th July 2013, the industry has taken a hit, with widespread redundancies across many salary packaging companies. A significant down turn in new car sales since the announcement demonstrated just how significant these ill conceived changes would be to the industry.
Fortunately, Tony Abbott announced there would be no changes to current Fringe Benefit Tax legislation should his party be elected to government. In an open letter to the car industry dated 3 September, Prime Minister Elect Abbott and Treasurer Elect Joe Hockey again pledged that Labor’s proposed changes to FBT on salary packaged cars would be “null and void”.
What does this mean?
It will be business as normal for us and other salary packaging and novated leasing companies across Australia. If you already have a novated lease, there will be no changes to your arrangement so you can continue to take advantage of the FBT savings available under the statutory formula method. For anyone else contemplating a new car, now is a perfect time to consider the benefits of novated leasing.
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