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Novated Leasing

Post-Election – Novated Leasing here to stay

Glenn Fairbairn
Director/Private Client Adviser
23 Sep 2013

On 22 July 2013 my colleague Chris Morcom wrote a blog about the impact of the Rudd Governments proposed changes to salary packaging of motor vehicles.

The proposed changes effectively spelt the end of the “statutory method”, leaving only the “operating cost” or log book method.  This would have required all those receiving a new motor vehicle fringe benefit after 16 July 2013 to maintain a log book to prove the percentage of business use of their vehicle. This compares to the statutory method where an individual’s Fringe Benefits Tax obligation is calculated with reference to total kilometres travelled, including private use.

These proposed changes sent shudders through the motor vehicle industry and left many employees in a panic about additional tax burden that may be imposed on their salary packaging arrangements.

On 19 July, Tony Abbott announced there would be no changes to current Fringe Benefit Tax legislation should his party be elected to government. Further, an open letter to the car industry dated 3 September stated that:

“You and your customers can rest assured that if we are elected, Labor’s FBT changes will become null and void. In the event the Coalition is elected on 7 September, we encourage all stakeholders including employers and employees engaged in salary sacrifice programs, to urgently and immediately return to normal trading activity in order to repair the damage done by this ill-considered Labor announcement.”

Regardless of your political tilt, following the recent election result, many people will be happy for at least one reason as it seems as though novated leasing is here to stay.

Salary packaging a vehicle can provide significant tax benefits, in particular the ability to use pre-tax dollars to service the lease repayment and running costs. I would encourage anyone considering upgrading their motor vehicle to consult their Accountant or Financial Adviser.


Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.