I have a confession. My car is salary packaged. And I don’t feel guilty about that.
But now I have a government telling me that this is a tax loophole that needs to be closed.
Since Paul Keating introduced fringe benefits taxes it has been perfectly legal to salary sacrifice for a company car, and the federal government has given a tax benefit for that.
The tax benefit is on the basis that the car will be used for work, but instead of charging a per kilometre cost to my employer, or filling in a log book, I can use a statutory formula tied to the number of kilometres I travel.
The assumption is that the more kilometres I travel, the more of them are likely to be for work.
This might be a poor assumption, but I don’t write the laws. I live my life and I try to keep the amount of tax that I pay to a legal minimum.
In my case I don’t know whether that is a poor assumption or not, because I don’t keep a log book, but I suspect it is not a good assumption.
If the government agrees, then they should have said so…a long time ago. Paul Keating has been politically dead for almost 20 years.
In fact, they reconfirmed two years ago that this sort of arrangement was OK, no matter how much business I was doing with my car.
In the 2013 budget Wayne Swan announced that he would change the arrangements so that everyone who salary packaged their car and didn’t fill-in a log book would only pay 20% of its capital value as tax.
So, while I agree that the government can change the law, I object to them branding me as some sort of tax dodger.
I can’t double guess what they are going to think is a reasonable deduction tomorrow and organise my life to take account of that today.
They said it was OK in 2013. How can it be wrong today?
Federal Labor never had my vote, so politically, in my case, it might be smart.
But they did have the vote of many of my fellow “rorters”. This sort of salary packaging is widely used in the NGO sector and the public service.
My barbs are bearable, but when you put the local priest offside because his parish has to raise another $5,000 so he can take communion around after church on Sunday, you’ve moved into a whole different universe.
You would have thought Kevin would have understood that, given that his favourite Sunday media conference backdrop is the lychgate of his local church.
Should have checked his new policy out with his local parish council, they might have a keener feeling for real sin than he does.