A local employment service for people with a disability says it will be forced to make cuts because of Federal Government changes to the fringe benefits tax on company and salary-sacrificed vehicles.
NOVA Employment CEO Martin Wren said the changes will cost the company more than $400,000 a year.
“The impact of that on a local level means we will have to reduce services. It means 82 kids won’t get a job this year, it’s disgraceful,” he said.
NOVA has 17 sites across Sydney including offices in Katoomba and Springwood.
“People need to understand that despite what the government has said this is not a BMW tax,” said Mr Wren. “This tax will affect average income people working in social services and for charities.”
Mr Wren met with Federal Member for Macquarie Louise Markus recently to discuss the changes.
The Liberal MP said she was deeply concerned about the knock-on effect of the tax for organisations such as NOVA, which rely on vehicle packaging to stay competitive for employees.
“The policies of the Rudd-Gillard Government have put enormous pressure on organisations and families. Once again we have policy on the run which has not been properly thought out,” she said.
But Labor candidate for Macquarie Susan Templeman defended the FBT changes.
“I understand that, especially for a non-profit organisation, any tax change is a challenge and I’m keen to further understand the options for those organisations,” she said.
“The decision to tighten the requirement around tax benefits associated with salary packaging a car under FBT rules is part of moving to a floating price on carbon a year earlier. What the government is asking is that if you’re claiming a tax concession because the car is used for work purposes, you provide a small amount of evidence to that effect — you need to log 12 weeks of use in a five- year period.
“The changes don’t affect existing commitments, even if the vehicle is on order and has not yet been delivered. Around 320,000 people are currently salary sacrificing a car under FBT rules. The reform doesn’t affect the more than 3.6 million workers claiming deductions for work-related travel, and legitimate business use of a car can still be salary packaged.
“There are no changes to other items that can be packaged such as taxis, panel vans and utes, as well as laptops and benefits for not-for-profit workers.”
Louise Markus said she promised that if elected, a Coalition government would not proceed with the changes.