Australia’s peak body for novated leasing said the current usage rules for e-bikes to qualify for tax breaks, unlike EVs, is constraining a potential surge in uptake.
Estimates from the National Automotive Leasing and Salary Packaging Association (NALSPA) show as many as 57,800 extra e-bikes could be on our roads within the first year of take-up if the fringe benefit tax (FBT) exemption had no restrictions on private use.
The FBT exemption that’s in place for e-bikes can apply through a salary package arrangement and help reduce the purchase price and running costs for workers. But awareness is low, and there is red tape as use is largely restricted to travel between home and work.
NALSPA chief executive Rohan Martin said interest is growing among workers and their employers for salary packaged e-bikes but changes are necessary to increase uptake.
“E-bikes are a perfect modern transport solution - they help with reducing the cost of living, increase exercise, and are environmentally-friendly,” Martin said.
“Cycling culture in Australia is still immature compared to other countries, unless you’re a lycra-clad devotee. E-bikes are changing the game.
“E-bikes require less effort to pedal, can carry more weight and travel further distances much easier, making them more practical and accessible for a larger number of people.
“Riding e-bikes is a very economical way to commute that can lead to significant savings compared to a car and even public transport - you’re not paying for parking, fares or fuel.”
The cost savings can be even greater on a novated lease as riders can get hold of an e-bike with zero upfront cost, repayments as low as $3 a day, no GST on the purchase price, a reduction in taxable income, and no FBT if the bike is mostly used for commuting and work purposes.
“There are so many exciting new e-bike models on the market that would suit so many Australians. But the problem is awareness of the FBT exemption is low and even if you find out about it, the current restriction on private use acts as a significant disincentive to an employee looking to salary package an e-bike.
“The FBT exemption laws for e-bikes should be amended so that there are no limitations on private use - just as it works for electric and plug-in hybrid vehicles. Just as we’ve seen with the success of the FBT exemption for electric vehicles, which has helped see EV sales grow 150 per cent between 2022 and 2023, if you get the policy settings right for e-bikes we’ll likely see them surge in popularity.
“Before the EV FBT exemption was introduced, battery and plug-in vehicles represented less than two percent of total SUV and passenger sales in Australia. In recent months, they have represented more than 14 percent.”
Media contact: Sofie Wainwright 0403 920 301
