Ipswich company car sales crash

TOUGH TALK: Teresa Harding, LNP candidate for Blair, and Ian Macfarlane, Shadow Minister for Energy and Resources, talk with car dealers Greg Boettcher and James Sturges about the impact of changes to the fringe benefit tax on cars.
TOUGH TALK: Teresa Harding, LNP candidate for Blair, and Ian Macfarlane, Shadow Minister for Energy and Resources, talk with car dealers Greg Boettcher and James Sturges about the impact of changes to the fringe benefit tax on cars. Claudia Baxter

IPSWICH car dealers say the Federal Government's planned changes to the fringe benefits tax (FBT) governing car leasing and salary-sacrifice packages has already cost them sales.

Prime Minister Kevin Rudd announced last week his government was tightening the tax rules.

The move is designed to save the government $1.8 billion and help pay for Mr Rudd's decision to move from the carbon tax to an emissions trading scheme.

Currently, the FBT allows people to claim concession under the statutory method (20% of the cost of their car) or the operational method (based on personal car use).

The new rules may only use the operational method which would force all employees to keep logbooks.

Shadow Minister for Energy and Resources Ian Macfarlane and LNP candidate for Blair Teresa Harding yesterday visited Llewellyn Motors in Booval where dealer principal Wade Llewellyn said Mr Rudd's announcement had an immediate impact.

"The day it was announced we had 12 cancelled orders," Mr Llewellyn said.

"We sell 15 cars a day so that's a full day's trading out the window with the announcement.

"We've got a fleet company that buys 500 cars a year, they've suspended their orders and we're not sure if they're going to be buying cars from us."

But he said the worst aspect was it affected people on lower incomes.

Mr Macfarlane said the tax changes would cost thousands of families an average of $1400 per year.

"It has been estimated that 75% of drivers with salary packaged vehicles earn less than $100,000 - so this is another hit on families," he said

Ms Harding said the policies of the Rudd and Gillard governments had "put enormous pressure on families in the region".

"There's been the carbon tax, changes to the private health insurance rebate, increased superannuation taxes, increased child care costs, the loss of promised family payments and now changes to the FBT on cars. If you are a sales rep with a company car, a nurse or a teacher with a salary packages vehicle, this is bad news for you and your family," she said.

Mr Macfarlane said that, if elected, a Coalition government would not proceed with these changes.

"Businesses are going to have to lay off staff because of an ill-conceived, no consultation decision by Kevin Rudd," he said.

Llewellyn Motors general manager James Sturges said the new FBT rules were a problem not only for car dealers but anyone who provided a car to their staff.

Boettcher Motors general manager Greg Boettcher said it was the last thing the car business needed.

"Times are tough as it is let alone out of the blue this happens," Mr Boettcher said. "It just puts more loss of confidence into an already-struggling industry."

But Federal MP Shayne Neumann said claims the FBT changes would cause damage to industry were "alarmist and irresponsible".

"In short, all we're asking is that if you're claiming a legitimate tax concession because you are using your car for business purposes, you provide a small amount of evidence to that effect," Mr Neumann said. "The biggest threat to the car industry in Australia is the Coalition themselves, who have confirmed they would cut at least $500 million from auto industry assistance."

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