Following the release of the latest car sales figures, the Federal government has claimed that fears about Fringe Benefits Tax (FBT) changes damaging the automotive sector were exaggerated.
According to the Brisbane Times, new vehicle sales dropped by 0.2 per cent (or 216 vehicles) in August when compared to the same period last year.
Responding to the figures, Industry Minister Kim Carr said, ''There will inevitably be a period of adjustment as people take into account these changes, which ensure that ordinary Australians are no longer subsidising the private use of vehicles.
''This adjustment has been minimal - 0.2 per cent according to the FCAI's data on last year - but August sales are still higher than the same period in 2011 and 2010.''
However many in the car industry do not share the government’s positive interpretation of the data.
As News.com.au reports, prior to August, the sector had been growing at five per cent in the first half of the year. Therefore, the drop of 0.2 per cent this August compared to August last year does not put the decline in context.
"The 0.2 per cent slowdown might not look like much but that's a swing of 5 per cent, or about 4600 sales, because the market was growing until the FBT changes were announced," Australian Salary Packaging Industry Association (ASPIA) Leigh Penberthy said.
Given that the average price of a new car is $34,900, an estimated $160 million worth of new vehicle sales disappeared in August.
"September is going to be worse, the forward orders just aren't coming through," Mr Penberthy said.
The Opposition opposes the FBT changes and has pledged to reverse the change if elected on Saturday.
Opposition Leader Tony Abbott and shadow treasurer Joe Hockey sent an open letter to the auto industry which stated - ''We want Australians to know that they can buy or lease a new motor vehicle with confidence, secure in the knowledge that a Coalition government will not proceed with the Labor government's poorly thought through changes.”