Coalition in, but no return for axed jobs
The Abbott government has pledged to reverse the proposal, which would have abolished tax breaks for employer-provided cars. But car-fleet companies, which depend on the tax breaks, said it was too early to tell whether workers would 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 workers would return. "It is going to take six months to see if business starts to pick up," chief executive Nigel Malcolm said.
The response follows a commitment by the 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 a second day in a row on Tuesday.
McMillan spent much of July and August criticising the Rudd government's proposal to abolish 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 response to the Rudd proposal, which included refusing to talk to analysts, shareholders or the media until after the election.
"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."
Frequently Asked Questions about this Article…
The Rudd government proposed changes to fringe benefits tax that would have abolished tax breaks for employer-provided cars. Car-fleet and salary-packaging businesses rely on those tax breaks for revenue, so the proposal triggered immediate cost and demand concerns across the fleet industry.
Fleet group NLC immediately sacked 73 workers after the announcement, and Fleetcare shed about a quarter of its staff in response to the proposed FBT changes. ASX-listed salary packaging firm McMillan Shakespeare was also affected in other ways, notably through investor reaction to its public response.
No — despite the Coalition pledging to reverse the FBT proposal, the affected companies said it was too early to commit to rehiring. Some firms have advertised limited roles but have not reinstated the full headcount cut after the election.
NLC managing director Matt Reinehr said the company’s budgeting runs out to the March or June quarter. NLC had advertised about 20 positions but said it could only add more staff if sales pick up, signalling no immediate full reinstatement of the 73 jobs cut.
Fleetcare chief executive Nigel Malcolm said it was too early to tell and estimated it would take around six months to see if business starts to pick up enough to justify rehiring.
McMillan Shakespeare’s shares fell for a second day after the election, dropping almost 7% in early trade on Tuesday and closing 2.6% lower at $12.34. The decline followed investor selling despite the company’s prior confidence that a Coalition government would repeal the FBT changes.
Ord Minnett analyst James Lennon said investors were responding to McMillan Shakespeare’s ‘extreme’ public response to the Rudd proposal — including the company refusing to speak to analysts, shareholders or media until after the election. That silence left investors guessing and increased volatility, prompting selling.
Based on the article, investors should watch company statements and updates, sales trends (whether business starts to pick up), and any hiring announcements. The firms themselves flagged that rehiring depends on sales and budgeting through the March/June quarter, and analysts note that clear communication can reduce volatility.
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