17072013

Fringe Benefits Car tax change bad for the environment

Changes in the fringe benefits tax proposed by Labor will remove the statutory rate; this means for abut 320,000 people they will have to keep log books and loose the ability to salary sacrifice against the benefit of having a company car - essentially making it uneconomical to 'share' the use of one car between a company and private usage.

So why is this bad for the environment? Well, cars these days for most families are essential to getting around. Removing the advantage for a company car to be used for private usage is forcing people to make a choice between having no car or buying another (cheaper) car. This is bad news for the environment, as it forces people into using two vehicles when they wouldn't otherwise need to.

It's also bad for the local car industry, as a lot of new lease hire cars will no longer be needed, the public rarely buys new cars and the manufacturers know this. This is turn is bad for the environment, as vehicles which are less efficient and clean are kept on the road for longer.

Basically anything which taxes carbon needs to be completely dismantled - it just does not work and just a big government exercise in spending money with no real environmental benefit at the end of the day.