The impact of FBT changes on the Victorian motor vehicle industry (27.08.13)

Written on the 28 August 2013

Member for Southern Metropolitan Region, Georgie Crozier condemned the Federal Labor Government in the Victorian Legislative Council last week when she raised her concerns for the thousands of Victorian motor industry workers who are affected by Prime Minister Rudd’s ill-considered changes to FBT policy.

“The consequences of the ill-thought through fringe benefits tax policy recently announced by Prime Minister Kevin Rudd and Treasurer Chris Bowen demonstrates how policy with no consultative process with important industry sectors can have far reaching and devastating impacts.”

“The automotive industry in this state employs 24,000 people and the potential for job losses in this industry alone is enormous,” Ms Crozier said.

“I note the ramifications this week; production at Ford has slowed and workers have been forced to stay at home due to the impact of the FBT changes.

“I’ve spoken to a number of constituents and businesses within my electorate of Southern Metropolitan Region who are directly affected by this ill-considered policy. Managing director of Nlc in South Melbourne, Matt Reinehr provides services for novated leases and salary packaging and was forced to let go 75 loyal staff immediately following the Rudd government announcement.”

According to the Australian Salary Packaging Industry Association (ASPIA), the immediate impact of the post July 16 announcement saw 10,000 new car orders cancelled or suspended immediately and an expected drop of 20 per cent in sales of Australian made cars indicated by the Fleet Lessors Association from sales orders during the first half of August.

Victoria is being disproportionally affected given that an estimated 70 per cent of automotive sector jobs reside in our state. As a result, we are looking at 21,000 potential job losses.
VACC has advised that car dealers are reporting that they will be forced to make between one and five staff redundant and 74 per cent have already reported cancelled sales.

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