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AfMA Calls on Newly Elected Australian Government to Nix FBT Changes

September 11, 2013

Following the election of Australia's newly elected Coalition Government on Sept. 7, 2013, the Australasian Fleet Management Association (AfMA), called on the new Prime Minister Tony Abbott to not proceed with the previous Government's proposed changes to the Fringe Benefits Tax (FBT).

In a statement AfMA released after the election, it restated its opposition to the FBT changes and their negative impact on the country's business and fleet communities:

"With tax reform on the agenda, the Association urges State and Federal Governments to review the FBT legislation as well as stamp duties for motor vehicles with a view to encouraging improved safety and environmental practices as well as reducing the cost and compliance burden for organizations.

"It is the view of the Association that changes made to the FBT legislation in 2011, setting the FBT rate of the statutory method at 20 percent, are counterproductive to the automotive and other industries.  This change in FBT rate alone, when fully implemented, will add up to $2.4 billion to businesses’ FBT bill. The Association would encourage the Coalition Government to revisit this issue and set a fixed, revenue neutral, rate as calculated at the time before the change to 20 percent.  Dr. Henry in his tax review prior to the introduction of the fixed rate indicated a revenue neutral rate of 11 percent.

"This is important because the interrelated and interconnected nature of FBT drives organisations’ purchasing decisions and directly influences operational initiatives. Fleet purchases are the major source of vehicles into the second-hand vehicle market.  Therefore, purchasing decisions made by fleets today will impact the transport sector emissions output and occupant safety for more than a decade after the initial acquisition.

"It is the Association’s view that the thrust of taxation policy should be to encourage, not discourage, fleets to be at the forefront of a robust movement to positively support the uptake of more safe and environmentally friendly vehicles in the fleet - the current FBT regime runs counter to this objective."

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