The car industry has been accused of crying wolf over the federal government's proposed changes to tax concessions for business-related vehicle use.
Senator Doug Cameron, who is a parliamentary secretary in the Rudd ministry, hit back at claims Labor's crackdown will hurt an already vulnerable motor industry and lead to job losses.
"The car industry has no right to argue they should survive off the back of people making unsubstantiated claims on taxpayers," the NSW senator and Left faction convener told AAP on Thursday.
"The car companies are crying wolf."
Labor's reform of the fringe benefits tax (FBT) system governing car leasing and salary-sacrifice packaging is expected to generate $1.8 billion over four years.
The savings will be used to support Australia's $3.8 billion transition from a fixed carbon price to a floating emissions trading scheme (ETS) linked to Europe a year earlier than expected.
The government says the move will help lower electricity and gas prices and has said Australian families will benefit by as much as $380 in 2014/15, if the ETS move goes ahead.
But the opposition, backed by motor industry groups, condemns the FBT decision and has challenged the government to prove its claim the system is being rorted by high-income earners buying luxury cars and claiming personal mileage as a work-related expense.
"Where's the proof? Where was the inquiry? Where were the revelations from the tax office saying there was $1.8 billion worth of rorting," shadow treasurer Joe Hockey said.
Since the FBT announcement on Tuesday, car dealers say fleet sales and salary-packaging orders "have ground to a halt".
The Australian Salary Packaging Industry Association (ASPIA) says just five per cent of salary-packaged cars are luxury models and most users of the FBT scheme are government, charity, health, police and education workers.
ASPIA said the change, which requires legislation to become law, would hurt jobs in the salary packaging and leasing sector.
"This is poor policy made on the run," ASPIA president Leigh Penberthy said.
Car leasing company NLC on Thursday said 80 staff at the firm will be made redundant.
Treasurer Chris Bowen said the reforms were based on expert advice from Treasury, the taxation office and bureau of statistics and in line with the need for compliance across the tax system.
"I know this is controversial, reforming fringe benefits tax never is uncontroversial, but it's the right thing to do for fairness and regarding our fiscal circumstances," he said on Thursday.
South Australian Premier Jay Weatherill will meet with federal industry minister Kim Carr on Friday to discuss the change and the implications for the car manufacturing sector, which comprises a large part of the state's economy.
Mr Hockey did not say if the coalition planned to block the reforms in parliament.
"We will have more to say about this in the next 24 hours," he said.
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