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The impact of Australia’s Fringe Benefits Tax for cars on petrol consumption and greenhouse emissions


Petrol consumption has become one of the most important sustainability issues for Australia. The central contention in this article is whether Australia’s current Fringe Benefits Tax (FBT) regime is promoting unnecessary mileage (and use of petrol) in salary packaged vehicles to obtain tax concessions under the FBT “statutory formula method” for cars. This article draws together the results of FBT survey data collected via a questionnaire and from respondents’ websites, which has been analysed by the authors. The evidence assembled generally supports the central contention. We have also reviewed and included commentary on similar studies that support our key claim. The findings are important because the questionnaire responses represent a significant sample. The outcomes of our research provide further support for a call to amend the current FBT legislation and therefore foster more environmentally sustainable car salary packaging polices for Australian business.

Author profiles

Diane Kraal
Diane works for Monash Business School, Monash University, Melbourne, Australia. - Current at 31 March 2020
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Senarath YAPA
PW Senarath Yapa, Associate Professor in Accounting, School of Accounting, RMIT University, Australia.
Current at August 2012
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Dianne Harvey
Dianne is a Senior Lecturer in Accounting at the School of Business, La Trobe University, Australia. - Current at 01 July 2008
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