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Imminent crisis in Defence forces as Government pushes changes to fringe benefits tax reporting.



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Media Release

The Hon Warren Snowdon, MP

Australian Labor Party

Member for the Northern Territory

 

9 August 1999

 

Imminent crisis in Defence forces as Government

pushes changes to fringe benefits tax reporting

 

 

Federal member for the Northern Territory , Warren Snowdon, said today the armed forces in the Top End face an imminent, acute crisis due to changes to Fringe Benefits Tax (FBT) reporting.

 

“In my ten years in Parliament I have not seen an issue in the Australian Defence Forces (ADF) that has created such controversy and discontent across the board,” Mr Snowdon said.

 

“I have had representations from personnel from all three forces, of all ranks - as well as from their spouses - and these people are upset, disillusioned and confused.

 

“The ramifications are enormous. Personnel are telling me they will be forced to leave the ADF because they simply cannot afford to stay.

 

“The Top End is a focal point for Australia’s defence strategy and already it is extremely difficult to recruit qualified personnel and ADF families here.

 

“For example, there is no surgeon in the Army at the moment and these changes will simply make recruiting a nightmare,” Mr Snowdon said.

 

The new FBT reporting regime will mean that employer-provided fringe benefits are reported on an individual’s group certificate.

 

While this does mean that the person’s income-tax liability will increase, it will be used when determining child-support liabilities, superannuation surcharge, the Medicare levy, HECS obligations, and entitlements to family payments.

 

“The new regime particularly disadvantages families in Darwin, which the Government has decided is not a designated remote area and, therefore, is not exempt from FBT reporting,” Mr Snowdon said.

 

“A family in Darwin which might have housing assistance of up to $40,000 as well as remote locality leave travel for family holidays will have the amount of those benefits added to their group certificate. This has the result of leaving many families ineligible for family allowance, for example.

 

“Defence staff are rightly upset at the wiping out of benefits that compensate them for the unique hardships and transient nature of service life. We are not talking about lurks and perks here, we are simply talking about benefits that help families survive while doing their job.

 

“Defence force morale is already low and these changes will only exacerbate this and provide a massive disincentive to ADF families,” Mr Snowdon said.

 

The Defence Department has confirmed that that no fewer than 12 benefits will be reported on defence personnel group certificates.

 

They are subsidised housing, Defence Service Home (DSH) home loans, Defence Homeowner home loans, Education Assistance, Air Conditioning Allowance, Discharge Removals and Travel, Childcare Reimbursement Allowance, Remote Locality Leave Travel, Compassionate Leave Travel, Reunion Travel, Home Purchase and Sale Expense Allowance, and the removal costs for a non-serving spouse after a marriage break-up.

 

“People with child support obligations are saying their only recourse is to get out of the defence forces,” Mr Snowdon said.

 

“This will affect thousands of ADF personnel who have made the Territory their home.

 

“The Howard Government has an ideological commitment to these changes without regard to how it a ffects these families.

 

“I will be pursuing the matter vigorously and will do what I can to turn around these changes. Separation rates in the ADF are already high. People will leave the armed forces because they are being discriminated against. It will also be difficult to attract new personnel.

 

“In the Top End, where forces are faced with the uncertain prospect of serving overseas, we have these silly decisions. The Government is clearly out of touch with defence force personnel if it continues with this policy.

 

“However, it is not too late for the Government to heed the calls coming from within the defence forces and not proceed with this misguided proposal,” Mr Snowdon said.

 

The tax is part on the Government’s new A New Tax System (Fringe Benefits Reporting) Act .

 

Ends

 

Contact: Tony Haritos 02-6277 4520, 0417 804 878

 

 

dd  1999-08-11  09:39