– By Caroline Falls –
The Australian Treasurer Scott Morrison is set to unveil the federal budget at 7:30 p.m. on Tuesday May 3 and fleet managers and human resources teams are among key groups that will be keeping their ears open for any changes that may affect their business.
Fleet Auto News has talked with members of these key groups and they have said they are not expecting any significant changes that will affect fleet management costs, novated leasing or salary packaging.
“We’re not expecting to see anything change,” said Leigh Penberthy, CEO of LeasePLUS and Chairman of the Australasian Salary Packaging Industry Association.
“We keep relatively close to what’s happening. We’ve had discussions with representatives of the Ministry (Treasury) and the shadow ministry. This time of year is always a tricky time. We wouldn’t be surprised if they tighten up some work-related entertainment expenses, but that’s not a salary packaging item.”
The last federal budget, delivered in May 2015 by former treasurer Joe Hockey, included changes to fringe benefit tax treatment of claimable meal and enetertainment allowances for not-for-profit organisations, namely shifting it from an uncapped arrangement to a cap of $5,000 effective from April 1 this year.
To be sure, people in the fleet management and salary packaging areas, will be watching the budget closely to ensure they are not blindsided as they were in July 2013 when the then ruling Labor government’s treasurer Chris Bowen proposed an axing of the statutory method of calculating FBT on vehicle use.
That announcement threw the industry into a spin. Car sales slumped in subsequent months. It became a significant election issue and Labor subsequently lost to the current ruling Liberal-National coalition. To the industry’s relief Bowen’s proposed changes didn’t come about.
Meanwhile the industry had argued that forcing businesses and their drivers to use the more onerous and costly log book method for calculating business use of a vehicle would result in little benefit to the government’s revenue.
It appears that in all the discussions industry leaders have had with Treasury officials, major political parties and the Australian Tax Office, any reasonable tinkering with current tax treatment of novated leasing or salary packaging has led to little revenue benefit for the budget.
“We are in frequent discussion with both major political parties,” said Deven Billimoria, CEO of Smartgroup, a listed salary packaging and novated lease provider. “We don’t believe that there are any plans afoot that would adversely impact salary packaging or fleet management.”
