COMPANY CAR AND DEFENCE CUT BACKS

COMPANY CAR AND DEFENCE CUT BACKS

I welcome reports that the Government intends to introduce a single 20% fringe benefits tax rate for company cars in next Tuesday’s federal budget.

This would mean taxpayers who are given company cars would be in the same position regardless of how many kilometres they drive.

At present cars which are driven more kilometres incur less fringe benefits tax. This is an incentive to drive company cars further, which is not what we want when we’re trying to cut Australia’s carbon emissions.

Changing the Fringe Benefits Tax rules for company cars is something I’ve previously called for on several occasions. It was one of the recommendations of Ken Henry’s review of the tax system.  I’m pleased at these reports which show the Government plans to move to improve the health of both the Budget and the planet.

I also welcome the Defence Minister’s announcement concerning Defence spending cuts. It seems to me that the Howard Government’s 3% real increase every year in Defence expenditure has led to a massive increase in Defence expenditure over time, which has contributed to a culture within Defence which is extravagant, and does not represent the best use of scarce taxpayers’ dollars.

KELVIN THOMSON MP

Member for Wills

Friday 6^th May, 2011