The Federal Government may attempt to soften the effects of its changes to the Fringe Benefits Tax (FBT) by offering government workers a $3000 rebate on locally made cars.
News.com.au reports that the government has been canvassing ideas within the car industry and the idea of a rebate is the most likely outcome to be implemented.
Under the changes which will apply from April 2014, any driver who receives a new employer-provided car or car bought through salary sacrifice will have to keep a log of their private use of it. Such use will be subject to the FBT. This will be paid by their employers.
The rebate would be intended to soften the negative consequences of the change.
However, Andrew McKellar, the executive director of the Australian Automobile Association claimed that the idea would not fix the problem and called for the decision to be reversed.
“The sooner that happens, the sooner the industry can start to recover," McKellar said.
The automotive manufacturing industry opposes the change on the grounds that it will damage the industry and there have been claims that it is already causing job losses.
According to News.com.au, the proposed $3000 rebate would not alleviate the problem and would be used in the first three months.
Meanwhile, as AAP reports, Shadow Treasurer Joe Hockey hinted that a future Coalition Government would not provide any major new grants for car companies like Holden.
He said that the government’s FBT changes would harm the industry more than any more handouts could help it.
"We shouldn't have to spend any more money because we didn't do the damage to the car industry that Labor is doing," Hockey said.