Climate Council's Budget Recommendations
The National Automotive Leasing and Salary Packaging Association (NALSPA) strongly supports the Climate Council’s latest report, which highlights the need to maintain the fringe benefits tax (FBT) exemption for electric vehicles (EVs). This report recommends extending these exemptions to include shared and active transport in the Federal Budget.
Rohan Martin, CEO of NALSPA, remarked that the Climate Council‘s report titled ‘Pedal to the Metal – A Budget to Break Free from Fuel Chaos’ aligns with data from the novated leasing sector. ‘The Albanese Government’s FBT exemption, known as the EV Discount, is allowing many Australian workers to consider and afford an EV, reducing pollution and shielding households from rising global fuel prices,’ he said.
Cost Savings and Environmental Impact
NALSPA’s analysis indicates that workers could save $1,725 annually with an e-bike FBT exemption and $690 each year with a public transport FBT exemption. These savings offer immediate financial relief to many Australians.
Martin stated, ‘The Electric Car Discount is an essential cost-of-living measure for everyday working Australians.’ With volatile global fuel prices and increasing cost-of-living pressures, changing the Electric Car Discount could further expose Australians to oil market fluctuations when they most need financial relief.
The Climate Council report shows that EV and hybrid vehicle drivers avoided $50 million in fuel price spikes in March alone. This significant amount represents real money staying in the pockets of Australian families.
Martin suggested the government should extend the success of the Electric Car Discount policy by applying similar tax settings to more affordable transport options, including e-bikes and public transportation. ‘The same system that is helping Australians access cleaner cars can also be used to make everyday commuting cheaper,’ he noted.
Extending targeted FBT relief to e-bikes and public transport would deliver immediate cost-of-living benefits, reduce congestion, and support practical emissions reductions, especially for workers in outer metropolitan areas.
NALSPA’s data shows the strongest uptake of the EV tax discount is in outer suburban areas such as Werribee and Craigieburn in Victoria, and Kellyville and Marsden. These areas are home to many professionals, including nurses and teachers, who benefit from the transition to electric vehicles.
The Federal Government is expected to announce its decision regarding the continuation and possible expansion of FBT exemptions in the upcoming May Budget.
