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Fbt on Motor Vehicles

The Federal Chamber of Automotive Industries (FCAI), the peak body representing the Australian automotive industry, accepts the Government’s move to introduce a flat rate for FBT on motor vehicles.  

“The industry acknowledges that the existing approach, using a kilometre-based threshold, is out of date and is inconsistent with the goal of reducing carbon emissions from motor vehicles”, FCAI Chief Executive Andrew McKellar said today. 

However the FCAI has cautioned that it will need to make a full assessment of the impact of the new measure and the proposed new FBT rate.  Budget Papers indicate that the proposed change will raise around $1 billion in additional revenue over the next four years, rising to around $450 million a year by 2014-15.

“Broadly speaking, industry would expect this reform to be implemented on a revenue neutral basis.  Accordingly, we will be looking to make an assessment about whether the proposed new FBT rate should be lower, Mr McKellar said.

“Industry will be concerned to ensure that those people who legitimately need to use their vehicle for business purposes are not faced with an unnecessary tax hike as a consequence of this measure,” Mr McKellar added.  

“Just because you live a bit further from the city, or in a country town and need to cover longer distances, doesn’t mean you should pay more tax on the car you drive”, said Mr McKellar.

 “Industry also remains firmly of the view that the Government should not lose sight of the need to reform other aspects of motor vehicle taxation, including the luxury car tax.  The luxury car tax is a punitive tax on advanced safety and environmental technologies and should be abolished or substantially re-worked”, Mr McKellar said.

For further information contact:
Sheena Ireland, Communications Manager
P: 02 6229 8221
M: 0458 038 555
E: sheena.ireland@fcai.com.au