Running the Country by Fact Sheet Since last Tuesday’s (July 16th) announced changes to car FBT, we have seen immediate job losses in the vehicle salary packaging industry and vehicle manufacturers, financiers, fleet management companies and dealerships all express serious concern about the implications of the announcement. As time goes on, we are starting to see the broader impacts of this proposal, with many Corporates and State Governments now starting to reconsider vehicle fleet sizes. Supporters of the announced policy have said the change ends a “rort” or a “perk”. We have even seen novated leasing referred to as a “scam”. Use of the sort of language starts a class war and that is absolutely unacceptable in this country. This is not simply some Liberal versus Labor issue as some would now have you believe; this is about a bad policy announcement and the serious implications of it. For those who want to label the FBT Statutory Formula a “rort” or a “perk”, consider this. The Hawke/Keating Labor Government introduced the Statutory Formula for FBT in 1986. It was then continued through the Howard Liberal Government years. The first Rudd Labour Government and then the Gillard Labor Government also supported it. 27 years of bipartisan support to be precise. And no one ever called it a “rort” before last Tuesday’s announcement. If we were dealing with a real “rort”, surely some Federal Government in the past 27 years would have ended it. This is not the first time in Australia’s history that we have had a financial black hole to fill and if the Statutory Formula was that bad, are we saying successive Governments, including the previous one run by the current Prime Minister, missed the problem? Sadly, this is policy on the run or worse, running the country by Fact Sheet. Industry and impacted lease holders have only seen a 1 ½ page Fact Sheet since last Tuesday’s announcement, along with straight faced Federal Government Ministers talking about making the taxation system fairer. On the back of a Fact Sheet, jobs have been shed. On the back of a Fact Sheet, an industry has collapsed. On the back of a Fact Sheet, people are financially worse off. Industry figures have now shown that the comments made by Treasurer Bowen as to who uses the Statutory Formula for car FBT are untrue. The average holder of a novated lease earns under $70,000 per year and buys a car worth less than $35,000. Those averages have not changed for a decade. This so called “rort” or “perk” was a legitimate tax concession for middle income earners. With the immediate and dramatic drop off in novated leasing since last Tuesday’s announcement, it is clear that the $1.8BN forward estimate savings will not be achieved. Additionally, all those people who have lost their jobs will no longer pay income tax and even worse, some may need to draw on Government support to survive. The numbers just don’t add up. So, what was this announcement all about? Well, we don’t really know. But what we can say is that Australians deserve better. Gillard and Swan had the chance to do what Rudd and Bowen announced last week and never took up the option. Why? Likely because they understood the very real impact of such an ill-conceived announcement. For Rudd and Bowen, the issue is about an election and seeking to retain power - nothing more, nothing less. For this writer, I hope that Chris Bowen becomes the shortest serving Treasurer in Australian history and that Kevin Rudd is consigned to the history books, once Australians are finally able to go to the Polls. -Ed of Stop the Bad Car Tax
Posted on: Tue, 23 Jul 2013 19:40:12 +0000
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