New Zealand's top advertising agencies have joined business groups and the Unite union in a campaign against the Government's proposal to tax employee carparks.

The FBT Action Group, formed by industry and business groups, says a tax change proposed late last year which would extend fringe benefit tax to all employer-provided carparks in Auckland and Wellington's CBDs could drive up carpark costs by 50 per cent.

The group also argues there are safety issues. Unite's Matt McCarten has warned the tax could see night shift employees lose their work car parks, forcing them to walk to their cars parked away from their workplaces in "at unsafe hours in some of the most unsafe parts of the city, risking assault and rape".

The group presented its submission to Parliament's finance and expenditure select committee where it argued the tax was contrary to political promises made by Prime Minister John Key about not putting in place regional taxes.


Employers and Manufacturers Association chief executive Kim Campbell told the committee that while the tax was estimated to net $17 million for the IRD, accountants Lock & Partners estimated it would generate additional compliance costs of about $30 million for businesses.

The FBT Action Group is fighting against the tax with a publicity campaign.

Matthew Hooton of public relations firm Exceltium which is working on the campaign said the Creative Agencies Association of New Zealand had now joined. The association comprises of the top advertising agencies in New Zealand and its members would be donating their time to assist with both the bumper sticker and billboard campaign.

Hooton said the advertising agencies were joining "because they have staff and provide car parks to them".

The group says businesses will pay an extra $1500 a year for all on-premises car parks, and close to $2400 a year for all commercially supplied car parks.

The tax comes after Revenue Minister Peter Dunne late last year said employee carparks would soon be recognised as income.

The tax was only aimed at workers with a designated parking space in the Auckland and Wellington CBDs, where the value of a parking space was high.

Small Business Minister and Act leader John Banks yesterday criticised the proposed tax as "petty" - criticism that makes it more likely National will pull the unpopular policy.


"It just doesn't make sense," Banks told the Herald. "I'm very hopeful that it's going to run out of steam."

If the Government doesn't pull it, Banks could be forced to vote for a measure he opposes as part of Act's agreement with National to support confidence and supply bills.

But he hopes it will be withdrawn before it comes to that.

Labour opposed the measure in its current form, revenue spokesman David Cunliffe said.