Economy

Is the car industry right on fringe benefits changes?

Matthew Knott /

The latest mining-tax-style campaign has kicked off this week: the Australian Salary Packaging Industry Association’s crusade against changes to fringe benefits tax on workers’ vehicles (here are the members of the ASPIA).

The slick PR blitz, overseen by Labor-aligned firm Hawker Britton and Peter Costello lobbying firm ECG Advisory Solutions, includes emotive TV spots, full-page print ads, and radio ads. The main claim of the print ads is that the changes?—?which will require people salary sacrificing a car to keep a log-book?—?could “directly affect” 528,000 Australians …

So does this stack up?

The industry’s figure comes from the Australian Tax Office, which estimated in 2011-12 there were 528, 203 statutory (ie: non-logbook) car fringe benefits. The ATO stresses this is only an estimate. It also includes fleet cars (which the government insists won’t be adversely affected by the changes) and FBT cars owned by the same person. But some tax experts have claimed the true figures could be even higher because FBT bills rounded to zero don’t count.

The 528,000 figure is certainly higher than the government’s estimate of 320,000 people affected by the changes. The government says this figure is based on Treasury and ATO data, but has not released the advice. This number does not include those driving cars provided by their employers.

The number of people salary sacrificing cars is a murky issue, and the Salary Packaging Industry Association has certainly picked a high-end estimate for its ads. The changes also won’t come into effect until people sign a new salary sacrificing deal or re-negotiate a lease. But the 528,000 figure is based on publicly available ATO data and has not been taken taken out of context dramatically.

We therefore rate the claim mostly true.

This article first appeared on Crikey.

 

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