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Australia votes: New-car dealers get back to work

Job lot: Australia’s new-car retailing network now has some surety, AADA chief executive Richard Dudley says.

Dealers look to slow recovery from fringe benefits tax rollback

9 Sep 2013

AUSTRALIA’S new-car dealerships believe they can bounce back from Labors’ failed attempt to fill a $1.8 billion carbon tax black hole by slugging new-car buyers.

The Australian Automobile Dealers Association chief executive Richard Dudley said the 1300 new-car dealers his association represents could now tear up plans to sack staff ahead of the change.

Ford has also revealed this week that it has restarted its employee company car/lease program, which it had put on hold when the changes to fringe benefits tax (FBT) were announced in July.

“We welcome and note that the prime minister-elect Tony Abbott has already indicated in a message to the Australian population that the FBT (Fringe Benefits Tax) will stay as is,” Mr Dudley said.

“That’s what we want to see because it provides surety and certainty over the changes that the government put into the marketplace.”“It did cause ructions because many dealers had to start planning for what may occur (from July 1 next year).

“They were carrying stocks which weren’t moving based on normal sales expectations. Those were arbitrarily pulled apart on July 16 (when Labor introduced the tax changes that made it more expensive to lease or salary-sacrifice a vehicle).

“They’ve had to account for that by trying to clear that floor stock as best they can through their sales and other marketing efforts.”

According to the AADA, about 10,000 new-car sales were sidelined as leaseholders walked away from contracts that would have added thousands of dollars a year to the cost of salary-sacrificed cars – most of which were middle-income earners, and not the high rollers that the Rudd government thought the tax would slug.

“While this provides surety back in the marketplace, it’s going to take some time before it hopefully settles down and reaches somewhat normal conditions,” Mr Dudley said.

He said the association was not yet aware of any significant job losses across the new-car dealership network.

“They (surplus staff) were being accommodated as far as we can tell, with plans being drawn up by many dealers to shed these staff if these changes had come into place.

“But we’re not aware of too many that have actually been forced out of employment in the lead-up to the election.”

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