The Australian Salary Packaging Industry Association (ASPIA) has reviewed the announced changes to Australia’s Motor Vehicle Fringe Benefits Tax concessions and is disappointed that such a significant change to legislation has occurred without appropriate consultation.
ASPIA believes that the changes will hurt Australian jobs and businesses, affecting 320,000 Australian working households.
“The announcement puts at immediate risk thousands of Australian workers who work in diverse industries, supporting the outsourced salary packaging industry. The changes will also have a massive and instant impact on vehicle sales as well as damage a motor industry already under pressure from external forces,” said Leigh Penberthy, President of ASPIA.
Whilst it is a common misconception that company vehicles and salary packaging cars are to the benefit of high flying executives, the average value of salary packaged cars in Australia is less than $35,000 and most users of the benefit earn closer to $70,000 per year.
Far from being wealthy, these Australians are teachers, ambulance drivers and police entering into a long standing taxation arrangement. These working Australian households stand to lose thousands of dollars each year as a result of this decision.
“The proposed removal of the Statutory Formula for company motor vehicles, including salary sacrificed cars will be bad for Australian business. Not only will it introduce unnecessary compliance for all Australian businesses, operating a company vehicle, but it will also hurt hundreds of thousands of Australian working families by thousands of dollars each year,” explained Mr Penberthy.
ASPIA calls upon the Federal Government to announce a moratorium on the proposed changes to allow appropriate industry consultation to occur.
The Association remains genuinely committed to taxation reform designed to increase fairness and compliance with Australia’s benefit taxation laws, however it believes it is important to clarify several points relevant to the current debate.