A PLAN by the Rudd Labor government to slug Australia’s struggling car industry with $1.8 billion in fringe benefits tax changes is an example of “rank hypocrisy” says Federal MP Warren Entsch.
The changes, announced earlier this week, will see the removal of concessions on the personal use of salary-sacrificed or employer-provided cars and has already put all new car salary packaging arrangements on indefinite hold.
“This is a blatant demonstration of Kevin Rudd making it up as he goes along,” Mr Entsch said.
“He talks about the crisis in the motor vehicle industry, propping it up with hundreds of millions of dollars in subsidies, but the only ‘solution’ he’s got is a new billion-dollar-plus tax hit to that same industry.
“It is yet another erratic Labor whack on the vital manufacturing industry as a result of making policy on the run.”
Mr Entsch said the sector was already struggling in the wake of the carbon tax that added more than $400 to the cost of a car.
“Labor is now out there again smashing demand for vehicles and hurting industry,” he said.
Industry representatives have already slammed the plan with Motor Trades Association’s John Chapman describing it as “a policy designed on the back of a napkin”.
Richard Ireland of Ireland Mitsubishi Cairns, the oldest and one of the biggest dealerships in the Far North, described the tax as “diabolical”.
“We are already feeling the impacts of this,” he said. “Businesses are already closing people are already becoming unemployed.
“The rules have been changed without any consultation with industry, or with regard for the impact on industry, small business and consumers.”
Mr Entsch said the tax change would hit more than 300,000 car leaseholders including nurses, charity workers and others who pay less than the top tax rate.
“This won’t hurt our high income earners; it will hurt those people on moderate incomes who are working even harder just to cope with the cost of living.”
He said, unlike Labor, the Coalition was committed to consulting directly with industry.
“Meetings have already begun,” Mr Entsch said. “We have deep reservations about the way this was implemented and about the amount of money being raised out of everyday Australians.”