– By Marc Sibbald –
It’s hard to believe that five years ago the novated leasing industry died when the federal government (lead by Mr K Rudd) announced a number of changes that were designed to reduce expenditure by stopping FBT concessions. But while the industry stopped breathing; it didn’t die thanks to some quick thinking and teamwork by several industry players.
From this crisis, The National Automotive Leasing and Salary Packaging Association (NALSPA) was born representing the combined interests of Australia’s major vehicle fleet leasing and salary packaging providers. Its members include Fleetcare, epac Salary Solutions, nlc, SG Fleet, Remserve, Maxxia, Advantage Salary Packaging, Autopia, Selectus and Smart Salary.
FAN contacted Matt Reinehr, Chairperson at NALSPA, to find out what has happened since the dark days of 2013 and what the industry was doing to promote the benefits of novated leasing and salary packaging with the federal government.
“Since the proposed changes to the FBT regime in 2013 the industry has continued to have dialogue with both political parties on the importance of salary packaging and the benefits of the current policy settings on the Australian economy and the motor vehicle industry. Both political parties (Liberal Party and the Labor Party) support the current FBT framework” said Reinehr.
“The association was formed in 2014 to provide a dedicated and considered focus on key policy matters relevant to its members and to, importantly, those many thousands of organisations and employees who rely on the products and services provided by the sector”.
“The association aims to preserve and, as appropriate, enhance the regulatory settings which underpin motor vehicle salary packaging together with tool-of-trade motor vehicle management in Australia”.
“NALSPA’s members manage or facilitate a significant bulk of leased employer-provided and salary-packaged vehicles in Australia and the salary packaging arrangements of hundreds of thousands of employees. Based on these numbers it has the largest representation of any association of its type in Australia” confirms Reinehr.
The association doesn’t publish numbers or statistics on the size of the industry though most of its members are part of publicly listed entities so the numbers are available if you go digging. The best estimate is more than 110,000 new vehicles (with an average purchase price of $35,000) each year are included in a salary packaging arrangement.
Its important that the industry has a voice with government because salary packaging is used to supplement low incomes in some of the most trusted employment sectors such as teaching, nursing and employees of not-for-profit charities. The NALSPA believes government policy on motor vehicles taxes and salary packaging concessions need to be considered together as a key part of the overall economy.
“Key issues is that the current policy settings supports the Australian economy and the motor vehicle industry as a whole. With wage stress on the average Australian employee the SFM (Statutory Fraction Method) brings some relief to household budgets for many middle and low age earners. We estimate that if the salary packaging of motor vehicle was removed the impact to the economy would be a reduction in real gross domestic product (GDP) of 0.2%” says Reinehr.
