Abbott's Coalition likely to scrap FBT changes

Car manufacturers and leasing companies in Australia will have breathed a collective sigh of relief following the confirmation of Tony Abbott's victory in the federal election.

If the new prime minister sticks to his promise, the FBT changes proposed by Kevin Rudd in July will be abolished - which is also great news for every fleet manager in Australia.

The Australian Fleet Management Association (AfMA) was quick to respond to the Coalition's triumph, underlining the importance of a fair taxation scheme on the country's fleet sector.

"It is the Association's view that the thrust of the taxation policy should be to encourage, not discourage, fleets to be at the forefront of a robust movement to positively support the uptake of more safe and environmentally friendly vehicles in the fleet," the AfMA announced in a September 9 media release.

"In congratulating the newly elected Coalition government, we trust it will hold true to its promise to not proceed with the previous Government's proposed changes regarding FBT."

The Coalition's triumph over the weekend will also likely mean that car companies in the country are once again safe, despite recent fleet sales slowing down in anticipation of the planned changes.

Ford and Holden were the hardest hit in Australia, representing the bulk of the drop in sales reported earlier this month by the Federal Chamber of Automotive Industries (FCAI).

The FCAI announced in a September 4 news release that fleet sales in August this year were down by 10 per cent compared to the same time last year, despite vehicle sales steadily increasing across the country prior to the announcement of the FBT changes in July.

"Without the return of the statutory formula method for salary-sacrificed and employer-provided cars, the FCAI and its members expect sales will continue to decrease through the rest of the year and into 2014," FCAI Chief Executive Tony Weber said in the statement.

With a new prime minister at the helm and Australia "under new management" however, car sales are poised to pick up pace across the country again.

You can read Tony Abbott's recent open letter to the employers and employees of Australia's car industry here.