Labor will make electric cars exempt from FBT – start salary packaging your electric car… if you can afford one

Labor just announce a tax windfall for the rich that every wealth person would be foolish not to take up… those who can afford to buy an electric car (the cheapest electric car in Australia is $45,000 and most are over $60,000) will be able to salary package it and pay NO FBT AT ALL ON ANY PRIVATE USE.

These rich people who can afford a car that is 2-4 times the price of a basic car will be able to pay for the private use of their car out of their pre tax dollars, saving them thousand of dollars of tax each year (Labor estimates it at $8k a year – all funded by the taxpayers who could not afford an electric car). But if you can’t afford an electric car you will have to pay for your private travel out of your post tax earnings. Remember the average salary in Australia in 2021 was just under $70k…

This will be available to any electric cars below the luxury car tax threshold for fuel efficient vehicles (which is $79,659).

Please read in a sarcastic voice… there are never any downside equity issues in using the tax system to achieve policy outcomes because we all know the rich are no better at using tax concessions than the poor…

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