Senior Government officials are understood to be distancing themselves from a controversial car park tax that has sparked fierce opposition from business groups and unionists.

The proposal to extend a fringe benefit tax (FBT) of almost 50 per cent to employer-provided onsite parking was the brainchild of United Future leader and Revenue Minister Peter Dunne.

The tax, which would apply only to workers in the Auckland and Wellington CBDs, has been widely described as petty and discriminatory.

Now National Party officials at the very highest levels are understood to be trying to shift the heat to Dunne, who is currently out of the country.

"Points are being made that this was not a National Party initiative," said a source close to the FBT Action Group, a coalition of interested parties fighting against the new tax.

The source said the group had received "positive communications" from officials, who had also expressed real concern over the increased cost of compliance for businesses.

An independent report presented to Parliament's finance and expenditure committee yesterday estimated the extra costs would add up to more than $30 million, dwarfing the expected $17m of actual revenue generated.

The National Party was aware that the FBT issue could become the equivalent of Labour's infamous attempt to regulate shower-head flows and lightbulb types, the source said.

In 2005, Prime Minister John Key pledged not to entertain any suggestions of applying FBT to on-premises car parks.

The FBT Action Group had originally planned to mount their campaign with a print run of bumper stickers, but new support has brought them a more sophisticated weapon.

A group representing 100 advertising and media agencies joined the fight yesterday, and a number of them are understood to be meeting today to develop ideas for a pro bono campaign.

Communications Agencies Association of New Zealand (CAANZ) boss Paul Head said yesterday that his members would enjoy applying their creative talents in opposing what seemed to be a "petty and quite selective tax".

An ad campaign is expected to be rolled out over the next few months.

The proposal to introduce FBT to employer-provided carparks is being discussed before a Select Committee, and is scheduled to come into effect from April next year.

- © Fairfax NZ News

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