A Melbourne-based car leasing company says it will have to make fifty percent of its staff redundant as a direct result of the government's proposed changes to the Fringe Benefits Tax (FBT) scheme.
Car leasing company NLC has done the sums and made some tough decisions announcing significant job cuts from tomorrow.
Director of NLC Danny Wilson has told SBS approximately 80 people will have to be made redundant as a direct result of the government's proposed changes.
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"It's had a massive implication on our business. We currently have about 1,000 applications in our system. We did some estimations around the impact this morning. It's looking like - we're hoping that about 300 of those proceed. It's a 70 percent hit to our business (earnings)."
Have your say: Is the crackdown on tax-breaks for car leasing a good move, or policy on the run?
Two days ago, the the Federal Chamber of Automotive industries warned of dire consequences for Australia's vehicle industry, both locally made and imported.
The Victorian Automobile Chamber of Commerce (VACC) claims Canberra doesn't know enough about the industry.
"The industry employs around 360,000 people. Three hundred thousand on the retail side and about 60,000 in manufacturing. And we have about 65,000 businesses in the automotive industry," says VACC executive director David Purchase.
The federal government says it hopes to raise $1.8 billion to cover the cost of moving from a carbon tax to an emissions trading scheme by requiring FBT car claims to be monitored via log books or through online apps.
There are now two methods to calculate FBT, with the Government scrapping one system that effectively assumes 20 percent of the use of a company car is for personal reasons.
The industry has demanded the Government scrap the move, arguing it will 'decimate' carmakers, suppliers and those involved in leasing.
The federal opposition wants the government to prove the current system is being misused by high-income earners who use luxury cars and claim personal mileage as a work-related expense.
