METHERELL: Penny Wong, at least one car leasing company is sacking a significant number of its workers because of the fringe benefits tax changes. Is that acceptable?
WONG: Can we just start with what this change really is. What this change is about is saying: just as you have to send your kids to childcare to get a childcare rebate, you need to use your car for work to get a tax benefit.
METHERELL: So, did you make this decision knowing that it would lead to job losses within the car leasing industry? Because the Australian Salary Packaging Association is saying that the information that the Government based its decision on was inaccurate. It says it has figures showing that most people affected by this change earn less than $100,000, but you're saying that most people earn more than $100,000?
WONG: Look, let's be really clear who's affected by this. People who use their car primarily for work so someone like a tradesperson who is in their car all day, every day they are already using what we call the log book method and they are not affected by this change.
Of course, employment generation is important, but so too is making sure we run a sensible budget strategy, and unfortunately sometimes that means making savings decisions such as this one.
METHERELL: So, is the Australian Salary Packaging Association wrong with its figures when it says that most people affected earn less than $100,000?
WONG: Well, that's not the view that the Government has, but I think there's a more important point. Let's go back to where we started if you get the childcare rebate you obviously have to put your children into childcare. What is being argued for here is that people should be able to continue to claim a tax deduction for business use of their vehicle when it isn't being used for business purposes.
So, as long as you are using your vehicle for business purposes, you can claim a tax deduction for that proportion, but obviously the previous concession was really not sustainable in the long term.
SCOTT BEVAN: Finance Minister Penny Wong speaking there to Lexi Metherell.
ENDS
ABC The World Today with Lexi Metherell - 19/07/2013
19 July 2013