Tony Abbott claims federal government changes to fringe benefits tax (FBT) rules for car usage are a $2000 a year "tax hit" on ordinary workers.
A NSW mayor who was campaigning with the federal opposition leader on Tuesday indicated the impact would be $500 a year.
The Rudd government on July 16 announced it would do away with the 20 per cent statutory rate - regardless of kilometres travelled - and require people to log business use of a private car.
The FBT change will affect 325,000 people in work-supplied cars and will save the government about $1.8 billion.
Mr Abbott told reporters in the NSW central coast seat of Dobell it was a new tax on ordinary workers, like the staff at Wyong Council.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
"The government FBT change is a $2000 a year tax hit on those people," he said.
Wyong mayor Doug Eaton said he estimated council staff would lose about $10 a week.
Cr Eaton said under the NSW award relating to council staff, the council could not pass on the FBT "increase" and faced a $1 million a year bill.
Asked why costs would rise because workers had to log legitimate work-related claims, he said the council arrangement was for workers to be able to have private use of work cars.
"The net effect of that is the tax will go up significantly and under the award we can't actually recover the increase in the tax," Cr Eaton said.
Mr Abbott later clarified his comment to say the council's "particular arrangement" would mean a $500 hit for its staff.
"But if you are someone who is a normal worker with a $70,000 a year income ... you will lose $2000 a year," he said.
