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Company car tax crackdown will hurt us, Australian manufacturers warn Company car tax crackdown will hurt us, Australian manufacturers warn
(2 months later)
The early start of a lower floating carbon price will help local carmakers by reducing the carbon-related cost on each Australian-made vehicle from around $50 to $12, the Rudd government says.The early start of a lower floating carbon price will help local carmakers by reducing the carbon-related cost on each Australian-made vehicle from around $50 to $12, the Rudd government says.
But the manufacturers are warning the government’s crackdown on fringe benefit tax breaks for company-provided cars to help pay for the carbon tax changes could have “dire consequences” for the struggling local industry.But the manufacturers are warning the government’s crackdown on fringe benefit tax breaks for company-provided cars to help pay for the carbon tax changes could have “dire consequences” for the struggling local industry.
“The effect of moving to an emissions trading scheme of around $6 is to reduce the cost to automotive manufacturers from $50 per vehicle to $12 per vehicle,” the industry minister, Kim Carr, told Guardian Australia.“The effect of moving to an emissions trading scheme of around $6 is to reduce the cost to automotive manufacturers from $50 per vehicle to $12 per vehicle,” the industry minister, Kim Carr, told Guardian Australia.
But the chief executive of the federal chamber of automotive industries, Tony Weber, said he not been consulted on the fringe benefit tax change and he “feared what it means for domestic manufacturing”.But the chief executive of the federal chamber of automotive industries, Tony Weber, said he not been consulted on the fringe benefit tax change and he “feared what it means for domestic manufacturing”.
The claims about the impact of the carbon price changes and the offsetting fringe benefit tax crackdown come as Holden is pleading with the government for extra handouts to prevent it from following Ford in announcing an end to local production.The claims about the impact of the carbon price changes and the offsetting fringe benefit tax crackdown come as Holden is pleading with the government for extra handouts to prevent it from following Ford in announcing an end to local production.
“I want to know if the government truly understands the consequences of this decision, and why the industry was not consulted on such a significant change … We estimate, from today, this could impact on around a third of new car sales,” Weber said in a statement.“I want to know if the government truly understands the consequences of this decision, and why the industry was not consulted on such a significant change … We estimate, from today, this could impact on around a third of new car sales,” Weber said in a statement.
“I fear what this means for domestic manufacturing and I am urgently seeking meetings with the government to encourage them to reconsider this decision.”“I fear what this means for domestic manufacturing and I am urgently seeking meetings with the government to encourage them to reconsider this decision.”
As part of $3.9bn in savings to make up for the reduction of its income from lower-priced carbon permits, the government has announced it will save $1.8bn over four years from removing the fringe benefit tax concession for the personal use of a salary-sacrificed or employer-provided car.As part of $3.9bn in savings to make up for the reduction of its income from lower-priced carbon permits, the government has announced it will save $1.8bn over four years from removing the fringe benefit tax concession for the personal use of a salary-sacrificed or employer-provided car.
Carr said the change did not discriminate against local manufacturers.Carr said the change did not discriminate against local manufacturers.
“The assumption that people buying fleet cars are all buying locally is not necessarily true,” he said.“The assumption that people buying fleet cars are all buying locally is not necessarily true,” he said.
The government said the change would only apply to new recipients of a company-provided car as part of a salary package, and would initially hit around 320,000 people, most of them earning over $100,000.The government said the change would only apply to new recipients of a company-provided car as part of a salary package, and would initially hit around 320,000 people, most of them earning over $100,000.
Holden has recently asked the government for additional assistance on top of the $275m it is already getting in state and federal handouts. Ford has announced it will cease local manufacturing in 2016.Holden has recently asked the government for additional assistance on top of the $275m it is already getting in state and federal handouts. Ford has announced it will cease local manufacturing in 2016.
The Coalition has said it will cut $500m from government assistance promised between now and 2015, and will hold a productivity commission inquiry to decide what payments should be made after that.The Coalition has said it will cut $500m from government assistance promised between now and 2015, and will hold a productivity commission inquiry to decide what payments should be made after that.
Abbott had said the carbon price added $400 to the cost of a car, but this was based on a calculation that excluded government assistance to the industry.Abbott had said the carbon price added $400 to the cost of a car, but this was based on a calculation that excluded government assistance to the industry.
The $12 calculation excludes the cost of carbon pricing on air conditioning gases, which is levied on both domestically-made and imported cars.The $12 calculation excludes the cost of carbon pricing on air conditioning gases, which is levied on both domestically-made and imported cars.
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