Playing it down: Treasurer Chris Bowen. Photo: Alex EllinghausenTwo days after Kevin Rudd and Chris Bowen announced sweeping changes to the fringe benefits tax regulations affecting new cars, jobs have been lost.Melbourne-based NLC Car Leasing has announced it will sack 74 of its 143 workers on Friday because of the immediate reduction in demand for lease vehicles as a result of the government’s change.“At the start of this week I was in the market for new staff,” NLC director Danny Wilson told Fairfax Media.He said he was left with no choice but to make the drastic cuts because the car financing industry has been so severely impacted by the changes.“It’s just stopped the market dead,” Wilson said.He said of the approximately 1000 applications for new deals currently in its system, usually up to 950 would have been processed successfully. But the government’s move to cut the flat 20 per cent rate fringe benefits tax has changed that.“As of the morning we’d be lucky to settle 300 of those,” Wilson said.But the 74 jobs could just be the start. The peak body for salary packaging in Australia warns that 2000 jobs could go in the short-term with 20,000 jobs at risk by Christmas as the industry tries to come to terms with the sweeping changes.Brad Dobinson of the Australian Salary Packaging Industry Association said job cuts are inevitable if the government goes ahead with the announced reforms.He warned that the impact of the changes would be wide reaching and affect all aspects of the industry from dealerships to fuel card operators and insurance suppliers.“It’s a very real spectre we face,” he said.Another salary packaging firm, Selectus, is considering sacking up to 100 workers by the end of the week.The automotive industry was due to meet in Melbourne on Thursday afternoon to discuss the situation before pursuing meetings with the government.The Federal Chamber of Automotive Industries said it was in dialogue with the government but wouldn’t reveal anything more.Victorian Premier Denis Napthine said the tax reforms may force manufacturers to cut local production by up to 10,000 vehicles a year, with the effects to be felt right along the supply chain.“We urge that if the federal Labor government is not prepared to abandon this policy, it should at least consider reviewing the scope of the new application of the tax to exempt locally produced cars,” he said in a statement.Treasurer Chris Bowen tried to play down the uproar from the industry.”We have not abolished the FBT concession for business use despite some of the rhetoric I’ve seen in the political debate over the last day or so. That is far from the case,” he told ABC Radio.”All we have done is applied similar rules that apply elsewhere in the tax system.”But those comments didn’t pacify Wilson, who was angry the government made such a radical change without consultation and only two years after it had previously changed the FBT system.“If the government had felt there was a problem with program, talk to us,” he said.Acting without discussing it, Wilson said is “a completely reckless act”.
The original release of this article first appeared on the website of Hangzhou Night Net.