The federal government’s decision to amend the FBT in relation to vehicle concessions has been blamed for the loss of jobs at a salary packaging company.
The ABC reports that Melbourne based company, NLC says it will cut 74 employees from its workforce of 147 workers. It has blamed the job cuts on the FBT changes.
NLC claims that the tax change would cost its clients at least $1,200 more a year.
According to NLC director Danny Wilson, the FBT amendment has caused a dramatic drop in the demand for salary sacrificed cars. He told the ABC's 7.30 program that two-thirds of clients are revoking applications for cars.
"Unfortunately this (Thursday) afternoon we have had to tell our staff we would be making about half our staff redundant,” Wilson said.
"Many of our staff have worked with us for a long time. I've got people that I work alongside of that are not only colleagues, but are friends, and I won't be working alongside of them on Monday."
Meanwhile, the Business Spectator points to the notion that the FBT concession is widely abused and claims that the change may actually help the local automotive manufacturing sector.
Currently, many companies lease expensive imported cars and others often do use company cars for domestic purposes.
The government is currently in negotiations with with General Motors and Toyota in an attempt to formulate a strategy to save the local car manufacturing industry. The FBT is likely to be factored into that strategy and any damage caused by the change will be accounted for.
Industry Minister Kim Carr has already stated that any unintended negative impact on the industry would be addressed in the new car plan. And he pointed out that the shift to an ETS is expected to cut the costs of Australian-made cars by $40 a vehicle.