From 1st July 1993 motor vehicle parking facilities provided by an employer became subject to fringe benefits tax. FBT will apply to the parking of any vehicle where

(a) the car being parked is provided to an employee as a car fringe benefit, or is owned or leased by the employee;

(b) the car is used by an employee to travel between home and work; and the car is parked at premises owned, controlled or leased by an employer for more than 4 hours per day between 7am and 7pm;

(c) the provision of the car parking facility is in respect of the employment of the employee; and

(d) the employer-provided car parking facility is within 1 kilometre of a permanent commercial car parking facility available for all day parking.

The value of the benefit will be calculated on either the lowest permanent commercial car parking fees applying within 1 kilometre of the parking facility or, if necessary, by an independent valuation of the parking facility provided. Guidelines on Fringe Benefits Tax for Inner Sector Budget Agencies (March 1993), Chapter 15, explains the way in which this tax is to be calculated. These Guidelines are available from the Treasury Cashier, Level 4, Premier's Wing, State Office Block.

This tax applies to all parking spaces meeting the above criteria, including parking spaces provided for official vehicles where there is any element of private use (eg. business/private vehicles), and private vehicles where parking spaces are provided by public sector employers (for example in Parliament House, or for employees with a disability).

In view of all the circumstances Cabinet has agreed that the cost of this additional Federal tax will be met by public sector employers, and supplementation will be provided to budget-sector agencies for this purpose. Staff who are provided with parking in conjunction with their employment will not be required to meet the cost of FBT on parking.

At the same time, and consistent with the Government's environment policies, Cabinet has determined that a critical review be undertaken by all agencies of their vehicle requirements with a view to reducing the number of business/private cars to the minimum level necessary for effective administration. Agencies are required to conduct this review and arrange for a report on the review's outcome to be submitted to the Office of Public Management by 30th September, 1993. OPM will advise agencies separately about the review process and reporting format.

Budget sector agencies should use the Treasury Guidelines on FBT to calculate the amount of FBT payable in 1993/94 (ie. as at 30th March 1994) as the basis for a request (by 27th July 93) to Treasury budget officers for adjustments to their allocations.

For further information, contact the SES Unit on (02) 228 5510.

R. G. Humphry,
Director-General.

Issued: 14 July, 1993