Many within the automotive industry blame the previous government’s plans to change the Fringe Benefits Tax regime for a drop in car sales in October.
The Australian reports that there was a 3.1 per cent decline in vehicle sales in October compared to the same time last year. This was the largest decrease in 20 months.
The Abbott government announced on Wednesday that it would scrap the FBT changes. The move was welcomed by those in the sector who blame the planned changes for the October sales fall.
Private auto sales increased by 4.4 per cent in October compared to the previous month. However, business sales decreased by 10.5 per cent and government car sales dropped by 7.8 per cent.
The last two figures tend to confirm the view that the proposed FBT changes played a role in the sales drop.
“The October data leads us to conclude there is still confusion in the market following the previous government's FBT proposal,” Federal Chamber of Automotive Industries chief executive Tony Weber told The Australian.
“It is hard to have any other explanation for the 3.1 per cent fall in the automotive market, particularly given a number of positive economic indicators across the broader economy in recent weeks.”
The Herald Sun reports that, while the previous government claimed the FBT changes were intended to hit the rich, data showed more than 80 per cent of employees who took out novated leases or salary package deals on new cars worked in the public sector.
They included teachers, health workers, police and so forth; people who aren’t generally described as ‘rich’.