Latest news with #TomGao
Yahoo
2 days ago
- Automotive
- Yahoo
$13,296 blow for EV drivers as major incentive could soon be scrapped: 'Would not buy'
Generous tax subsidies for electric vehicles (EVs) could soon be phased out as the federal government tries to rein in spending. EV drivers have been able to save thousands of dollars thanks to Fringe Benefits Tax (FBT) exemptions and other incentives. Sydney resident Tom Gao told Yahoo Finance these tax breaks were the main reason he jumped on the EV bandwagon when he bought his first Tesla. Productivity Commissioner chairwoman Danielle Wood has indicated it could be on the chopping block to make way for cheaper initiatives. 'We have a whole range of policies at both federal and state level to try and reduce carbon emissions,' she said on the ABC's 7.30 programme. Tesla driver backs $13,000 cash boost for EV drivers as popular rebate under fire ATO, Centrelink warning over $100 million Powerball lottery win Aussie teen's job paying $300 per hour without a uni degree 'Each of those has sort of an implicit cost per tonne of abatement. Some of those we've said in the past are pretty high, things like fringe benefit tax subsidies for EVs.' The tax break was introduced by Anthony Albanese in 2022 and was designed to boost the number of EVs on Aussie roads. That has definitely been achieved. According to the Australian Automobile Association, there were 6,752 battery-powered electric vehicles (BEVs) sold in the first quarter of 2022. Fast-forward to the first quarter of 2024, there were 25,552 sold. BEV sales have dropped off since then as plug-in hybrids became more popular due to being the best of both worlds between a battery and internal combustion engine (ICE).You can deduct the cost of an electric vehicle if: The EV was worth less than $91,387 The car was bought with a novated lease A novated lease allows an employee to buy a new or used car and have their employer cover the cost of lease repayments to an agreed financial supplier. The employer makes the repayments to the leasing company out of the employee's pre-tax salary in a salary sacrifice arrangement, which reduces the employee's taxable income. For example, if a worker secured a $68,000 EV through a novated lease through their company, they could save around $13,296 thanks to the exemption. As many as 100,000 people have taken up the tax break so far, according to the National Automotive Leasing and Salary Packaging Association. "I would not be buying an EV if FBT exemption is removed," Goa told Yahoo Finance, who feared there would be a "significant drop in EV purchases" if it was scrapped. "If you look at uptake of EVs in countries like Norway, it's completely driven by government incentives," the Sydney driver said. "That's the case across the world." The government ended the FBT exemption for plug-in hybrids at the end of March this year. The Productivity Commission is currently reviewing the tax break ahead of a government summit in August. It's set to release a report on its findings before that meeting in a few months. Treasury had forecast the FBT exemption policy would only cost taxpayers $55 million in the 2024-25 financial year. But figures from the Institute of Public Accountants found it cost closer to $560 million per year. The Commission estimated in 2023 that the policy cost between $987 to $20,084 per tonne of carbon abatement. This means the government is spending that much money for every tonne of carbon emissions it has helped prevent. That reportedly makes it the most expensive climate policy on the government's balance sheet by a long shot. For comparison, the next most expensive policy at a federal level is the discounted excise for E10 petrol, which is $128 to 274 per tonne of carbon abatement, according to the Australian Financial Review. While Gao has enjoyed the benefits of the policy, even he admitted it was an "outrageously" generous handout and bordered on being "extremely fair" for ICE drivers. While the FBT exemption for EV drivers might get scrapped, the Commission could suggest allocating the money towards broader emissions reductions strategies. This could include expanding the carbon emissions cap to additional sectors like road transport and electricity. During the 2025 election campaign, Peter Dutton said the Coalition would axe the exemption if his party won. The promise sparked major concerns in the EV community, with Electric Vehicle Council CEO Julie Delvecchio saying she was "extremely disappointed and confused". 'The electric car discount has been helping thousands of workers finally afford to buy an electric vehicle. When Australians make the switch to an EV, they stand to save up to $3,000 per year on fuel and maintenance costs, but the biggest roadblock is the upfront cost," she said. "The FBT exemption has been helping to lower that barrier. "The Australians who're set to lose out most are those in outer suburbs, who have embraced the electric car discount in droves. "People living in the outer suburbs and regional communities — who typically drive longer distances — are finally able to access the savings that EVs offer, thanks to this discount." She said the exemption had been "highly effective" at getting more EVs on the road and getting rid of it could "stall progress toward cleaner, cheaper-to-run transport".
Yahoo
24-04-2025
- Automotive
- Yahoo
Another hit for EV drivers as popular $13,000 tax break is under fire
Electric vehicle (EV) groups are furious over Peter Dutton's backflip on removing the fringe benefits tax (FBT) for new-age cars. The Opposition leader said earlier this week the Coalition wouldn't get rid of the generous handout for Aussies buying an EV. But two days later, the Liberal party leader said the multi-million dollar Labor scheme would be dropped if he won the May 3 election. The rebate allows drivers to deduct the cost of an electric vehicle from fringe benefits tax if it was bought through a novated lease and does not exceed the value of $91,387. Sydney Tesla driver Tom Gao bought his 2025 Model Y Juniper thanks to the FBT exemption and told Yahoo Finance the policy was a big factor in his purchase. "I would not be buying an EV if FBT exemption is removed," he said. Electric Vehicle Council CEO Julie Delvecchio was "extremely disappointed and confused" Australians could lose important financial assistance that allowed them to reduce ongoing costs by purchasing an electric vehicle. RELATED Tesla's $1.54 billion 'horror show' as Elon Musk cops backlash from 'changing political sentiment' Centrelink's blunt warning over $1,200 'one-off' cost-of-living payment: 'Be mindful' ATO's $24,097 tax blow for every Aussie worker 'The FBT exemption is incredibly popular among Australians living in the outer suburbs and helping many Australians across the country afford and manage the upfront cost of an EV, which we know is cheaper to run once you're behind the wheel," Delvecchio said. 'If the Coalition wants to make cars cheaper, and driving cheaper during a cost-of-living crisis, it wouldn't be removing this discount for Australians.' Gao said he feared there would be a "significant drop in EV purchases" if the scheme was scrapped. "If you look at uptake of EVs in countries like Norway, it's completely driven by government incentives," the Sydney driver said. "That's the case across the world."Australians can shave thousands of dollars off the cost of an electric vehicle using the rebate. The program, which was introduced by the Albanese government in 2022, had been extended to cover plug-in hybrid electric vehicles, but that exemption ended up April 1. Now, you can deduct the cost of an electric vehicle if: the EV was worth less than $91,387 the car was bought with a novated lease A novated lease allows an employee to buy a new or used car and have their employer cover the cost of lease repayments to an agreed financial supplier. The employer makes the repayments to the leasing company out of the employee's pre-tax salary in a salary sacrifice arrangement, which reduces the employee's taxable income. For example, if a worker secured a $68,000 EV through a novated lease through their company, they could save around $13,296 thanks to the exemption. Treasury forecast the policy would cost taxpayers $55 million in the 2024-25 financial year. But recent figures from the Institute of Public Accountants found it cost closer to $560 million per year. Drivers of traditional petrol or diesel fuel, an internal combustion engine vehicle (ICE), have claimed electric vehicle drivers are given unfair cost advantages. Gao said he found the policy generous and had predicted it to be short-lived. "If you look at the numbers, it's so outrageous in terms of incentives towards EV owners," he said. "To some degree, I think it's extremely unfair for ICE owners." During the election campaign, the Coalition had advised the tax exemption was too costly to continue. However, on Monday Dutton said: 'No... We don't have any proposals to change those settings." Cut to Wednesday and the tune was a little different. 'The Coalition will … unwind Labor's taxpayer-funded and badly designed electric car subsidies, saving upwards of $3 billion over the forward estimates and $23 billion over the medium term,' his campaign said in a statement. The Australian reported that Dutton may have misheard the original question on Monday. But it didn't stop Labor from sinking its teeth into the backflip. 'The Coalition is a risky and reckless bin fire of inconsistency and incompetence on the economy,' Treasurer Jim Chalmers said. 'This is what happens when they spend three years doing everything they can to avoid coming clean on their cuts. Every day a new, more embarrassing combination of Coalition cuts and chaos.' National Automotive Leasing and Salary Packaging Association (NALSPA) CEO Rohan Martin said the Coalition's backflip "would disproportionately affect average working Australians" at a time when the "cost-of-living crisis, including escalating transport costs, is hitting hard". It has called on the Coalition to rethink its stance. "Such a winding back doesn't align with the Coalition's own election pledges—like tax relief through an offset, scrapping the New Vehicle Efficiency Standard penalties to lower upfront car costs, and halving the fuel excise—because the EV FBT exemption successfully delivers on all those fronts." The Coalition has promised slash the fuel excise from 50 cents to 25 cents per litre for 12 months, if elected, to bring down the cost of petrol. The cost of fuel has decreased recently as US President Donald Trump's ongoing tariff war created instability in the global oil markets. The New Vehicle Efficiency Standard was introduced earlier this year and it gives every car manufacturer a CO2 target that they either have to meet or beat each year, otherwise they could be penalised. The opposition wants to get rid of those penalties so that car manufacturers aren't reprimanded if they don't roll out fuel-efficient in to access your portfolio
