Car fleet firms put brakes on jobs reversal
Companies that slashed jobs on the back of the Rudd government's proposed fringe benefits tax changes have refused to reinstate workers following the election of a Coalition government.
The Abbott government has pledged to reverse the proposal that would have seen tax breaks for employer-provided cars abolished. But car fleet companies, which depend on the tax breaks for business, say it is too early to tell whether workers will return to jobs.
Fleet group NLC, which sacked 73 workers immediately after the Rudd announcement in July, said it had advertised for 20 positions, but was unable to commit to more.
"Our current budgeting process goes up to the March or June quarter," NLC managing director Matt Reinehr said. "If sales pick up, we'll put on more staff."
Fleetcare, which shed a quarter of its staff on the back of the proposal, also said it was too early to tell whether the workers would return.
"In reality it is going to take six months to see if business starts to pick up," chief executive Nigel Malcolm said.
The response comes after months of vitriol for the Rudd government's proposal. It also follows a commitment by the car fleet industry to renew positions after a Coalition victory.
ASX-listed salary packaging firm McMillan Shakespeare has also failed to benefit from a change in government, with the company's shares falling for the second day in a row on Tuesday.
McMillan spent much of July and August criticising the Rudd government's proposal to abolish the tax breaks.
In its full-year results it told investors it was confident a Coalition government would repeal the move and allow the company to return to "business as usual".
But despite this, investors dumped the stock on Monday and Tuesday, pushing shares down almost 7 per cent in early trade on Tuesday. They closed 2.6 per cent lower at $12.34.
Ord Minnett analyst James Lennon said investors were responding to McMillan's extreme reaction to the Rudd proposal, which included refusing to talk to analysts, shareholders or the media until after the election.
"I think people were expecting a worst-case scenario," he said. "Until you hear from the company, things tend to be more volatile because you are second-guessing what's happening. For all we know, management might be looking at an acquisition."
McMillan continued its self-imposed exile on Tuesday. The company's chief financial officer Mark Blackburn did not respond to questions and a spokeswoman said chief executive Michael Kay was not available.
Its silence is likely to lift on Wednesday when it releases its full-year results presentation to the market.
McMillan generates its revenue from salary packaging fees, fleet management fees, and finance trail commission, helping to run fleets of taxpayer-subsidised cars.