Bicycle Network: Better Transport
Member comment on first draft
Members have been responding to our proposal to establish a tax advantage for bike commuters with thoughtful and insightful comments.
In general the comments were supportive and enthusiastic.
This summary will look at those that raised questions about the proposal or looked to modify it in some way.
Some of the commentary tackled the scheme at the highest level preferring a carbon tax or high level measure that dealt with all transport.
Others tackled the idea of a ‘detailed’ FBT and salary sacrifice scheme proposing instead a simple tax deduction based, as one person suggested, on a declaration, a log book and an employer endorsement.
Others commented on related taxes such as GST and on the benefits offered to people using a motor vehicle.
Others rightly pointed out that we were proposing something in line with the current approach to tax and that the whole system needed a thoroughgoing review.
These comments all have merit; nonetheless we judge that it our ‘minimalist’ approach has the best chance on being adopted and making the most difference.
It is true as some pointed out that you can claim for work related bicycle travel under the current tax law. We are working on a scheme for the journey to work.
The detailed scheme
We are aware of the overseas schemes – as we mentioned in the initial document. These schemes are not necessarily applicable in Australia as they relate to different tax environments. Some of the concepts they embody are sound but they share, in our view, an unnecessary complexity and difficulty in implementation.
The comments on the details of the scheme we proposed included those who pointed out that proposal is not universal. It does not apply to who work at home but make local trips by bike, sole traders, self employed, and contractors. The scheme as some noted is best suited to employees riding to large companies.
We remain committed to reducing barriers and increasing benefits for all riders. This scheme we agree will need to be complemented by other initiatives.
It was noted that these schemes do take some work on the part of the employer. Some organisations charge $300 to run a salary sacrifice scheme. Others liked the idea as it could sit alongside existing salary sacrifice agreements.
People asked if we imagined electric bikes being eligible. When the definition of electric bikes is successfully resolved – and there is some way to go on this – then we would imagine the measure including electric bikes.
There were some comments about the bike shop provision. Some people felt it would be hard for some to get to a shop, others were concerned about the level of support from shops or said they wanted to do their own maintenance.
The log book clause attracted some comment. People felt that the periods were too inflexible to allow for holidays or regular interstate travel. Others wanted to have a paper option as well as an online record. The sensible idea was proposed of using internet based mapping capability to register ones home and work and then logging trips each week for example.
There were a significant number of comments about the ceiling of the scheme. A number of people felt that $1 500 every two years was too little. Some wanted the scheme to give you more if you rode further. Others felt two years between new bikes was wastefully frequent.
As a result of these comments we have modified the proposal which we will shortly put to the Tax Review.
We will keep you up to date on its progress or any other similar proposals.