Every Federal budget contains a list of winners and losers. Here are comments from the fleet industry on the things they found interesting in the latest announcement.
No funding/subsidies provided for purchase of EV’s
Chris Cormack, Executive General Manager, Discover Energy said, “The government’s continued resistance to give the green light to manufacturers to bring their EV ranges to our shores will continue to impede Australia’s efforts in becoming a greener country. The recent global crises has put a focus on the cost of living so Australia needs to double down on renewable solutions such as electric vehicles (EVs) because, in the long term, they will be what helps reduce living expenses. There is a major opportunity for the government to turn around policy on EVs and dramatically increase the uptake across different parts of the community.”
Christopher Chisman-Duffy, Sales Director, Webfleet Solutions AU said, “There is going to be a huge chasm between the amount of interest in EVs in Australia and the actual supply of vehicles. While there are currently state-specific financial incentives in place, what the nation needed from this budget was a cohesive policy from a Federal level in order to attract the best and most cost-effective vehicles for Australians and install more charging infrastructure.
It is about time that we see EVs as more than just another tool of transportation, and more as the key to a forward-thinking, sustainable and net-zero economy in the future.”
Temporary Cut to Fuel Excise Introduced
Christopher Chisman-Duffy, Sales Director, Webfleet Solutions AU, said “Rising fuel costs are driving up the cost of living and having a devastating impact on fleet businesses. The temporary cuts to fuel excise is a direct relief payment that can help to address that problem in the short term. That being said, there needs to be further considerations of reforms that can have more long-lasting economic benefits for fleets and other impacted businesses.”
Mina Nada, Zoomo CEO & Co-Founder, sees a missed opportunity in identifying alternative solutions to the current petrol crisis.
“We support the government’s prioritisation of the cost of living during this turbulent time for Australian households and welcome the initiatives in place to support motorists, taxpayers and more. In saying this, we feel there was a missed opportunity to consider another, equally important, cost of living,” said Nada.
“The cost of living with climate change.The cutting down of fuel is critical to easing some of the financial pressures Australians are currently burdened by. However, there is an alternative solution that we would have liked to see explored which is the long-term opportunity to invest in and realise the true potential of clean transport alternatives. The fuel excise is a crucial step in economic recovery, but its intent is to maintain Australia’s reliance on increasingly unaffordable fossil fuels and pollutive transport modes.
“We are confident that the Morrison government and future governments will see the full potential available to them from micro-mobility and hope to see specific funding for investment into cycling infrastructure, subsidies for individuals and businesses to own and use e-bikes, and financial mechanisms to dissuade the use and purchase of fossil fuel-guzzling cars and vans in the near future. Australia is well placed to take advantage of the booming micro-mobility market and reduce the impacts of climate change and we welcome a positive discourse with the government to speak to this opportunity. There is so much we can and should be doing.”
Vehicle to Grid potential
Chris Cormack, Executive General Manager, Discover Energy said “Electric vehicles currently possess major untapped potential, if the capacity of their batteries can be utilised by energy companies. EV batteries are a game-changer for the energy sector with them being able to store 7-10 times more energy than a standard home battery. Investing in technology that is able to draw from car batteries, like Vehicle to Grid (V2G) smart technology, will mean greater flexibility to cover household demand for electricity and energy companies will be able to give Aussies access to energy for free.
“Another way to support with growing electricity bills is to invest in smart technology that stores excess energy in the grid from, typically, the middle of the day and release it at peak times such as the evening.”
Impact on Business
Patrick Coghlan, CEO at CreditorWatch, says the innovation agenda will drive future spending. “This year’s announcement was designed to support the economy’s path out of the pandemic with the cost of living and infrastructure key focus areas. Businesses and consumers are still struggling after a number of difficult years and the government has issued a pre-election Budget that focuses on both infrastructure and the bush.
“The Federal Budget confirmed a $78 billion deficit for the 2021/2022 financial year. This is a material reduction to the December 2021 mid-year review, which forecast an almost $1 trillion deficit by 2026. This year’s Budget precludes an expected fall in the unemployment rate to 3.75 per cent, which puts a large amount of pressure on wages.
“Ultimately, it’s a seminal Budget for an election year that follows two extremely difficult years.”
Helen Lea, MYOB chief employee experience officer and government policy lead, said, “The Federal Government’s temporary fuel excise reduction will make a significant difference for many of Australia’s small businesses. In January, MYOB found fuel pricing was the foremost pressure facing 41% of the country’s SMEs, overtaking COVID as the key concern for the first time since the pandemic hit. Small businesses in transport sector were disproportionately impacted, with 72% in the industry responding that fuel prices were causing significant pressure.”
Automotive tax reform
Steve Bragg, Partner and Motor Industry Services Lead at Pitcher Partners Sydney says the budget lacked any response to the challenges facing the automotive industry which continues to see a lack of the leadership.
“While the budget responded to the immediate cost of living burdens being felt by car owners, there is an urgent need for a national plan for the changes facing the automotive industry in Australia,” he said.
“Retail car dealerships and their customers contribute billions (tens of billions) in taxes annually to federal, state and territory governments. What is needed is consultation on the reformation of this heavily taxed sector.
“As detailed in the budget, motorists and car dealerships will be paying billions in taxes from import tariffs, luxury car tax, fringe benefit taxes, GST, stamp duties, income tax and fuel excise. With the exit of manufacturing passenger vehicles in Australia, the current automotive taxation scheme doesn’t work and is frankly not fit for purpose.”
The Budget noted that since the Mid-Year Economic Forecast, luxury car tax receipts for 2023-23 had been revised up by $160 million to $880 million and revised up by $570 million over the 4 years to 2025-26. They are estimated to be close to $1 billion a year on those forecasts.
Mr Bragg noted there was nothing in the Budget that addressed the uneven take-up of electric vehicles, with incentives and tax positions left to the states.
While the reduction in fuel excise addressed in part the immediate issue of petrol affordability, he was disappointed by the lack of reform to support a more fuel-efficient future.
“Australia is an import-only car market and the ascension of electric and low emission vehicles requires immediate attention to address the enormous change that is occurring in the automotive industry before it’s too late,” he said.
“Trying to legislate change after the fact will simply not work. Currently, state and territory governments are forging their own routes in EVs. The federal government needs to address the disparate nature of fuel-efficient vehicle incentives which see every state with different rules.
“Levelling the playing field for Australian motorists with the rest of the world in fuel efficient vehicles would see long-term benefits and less dependency on oil price fluctuations. What is really lacking is leadership in these important areas that effect every Australian who own a car.”