Dealerships sound fears over tax changes

ORDERS are drying up at new-car dealerships, and almost all say they will have to cut staff levels as the full impact of changes to the way novated and salary-sacrificed cars are taxed hits home.

The Victorian Automotive Chamber of Commerce today released the findings of a survey of Victorian new-car showrooms, revealing an industry that is already losing orders and preparing to shed staff as order books dry up.

According to the study of the Victorian members of the Australian Automotive Dealer Association, nine out of 10 said they had already lost orders as the implications of the proposed fringe benefits tax law changes, which remove the statutory 20 per cent limit for assessing the amount of personal use of a car for tax purposes.

More tellingly, though, 84 per cent of respondents to the survey said they believe job losses are not far away.

VACC executive director David Purchase said AADA-Vic members were livid that the FBT changes were announced without industry consultation.

“The message from car dealers in Victoria is clear,” Mr Purchase said. “They oppose the FBT changes and want the decision reversed.”

Dealerships said as well as noticing a downturn in inquiries about new and used cars, smaller dealerships were struggling with a loss of volume from large businesses that were cutting back on novated leases.

“People have already lost jobs and there will be more if the decision remains,” one survey respondent said.