Australia's Economy Is Growing — What That Means for Your EV Novated Lease
Australia's economy grew 2.5% through the year to March 2026. Here's what a strengthening economy means for EV novated leasing right now.
Australia's economy grew 0.3% in the March quarter 2026, and 2.5% through the year — the equal-fastest annual pace in almost three years, according to the Treasury Ministers' National Accounts release [Source 1]. Treasurer Jim Chalmers noted that all of the quarterly growth came from the private sector, driven by business investment, household consumption, and dwelling investment.
That's the macro backdrop. So why does it matter if you're a PAYG employee thinking about a novated lease on an EV? Because the conditions that make novated leasing attractive — stable employment, private sector confidence, and continued government support for EVs — are all present right now.
What this means for novated lease customers
When private sector investment is strong and employment is holding up, employees tend to have more confidence to commit to a three-to-five year salary packaging arrangement. A novated lease is ultimately a bet that you'll stay employed — so a resilient labour market, noted in the same National Accounts release [Source 1] as outperforming almost every major advanced economy, is directly relevant.
The FBT exemption for eligible battery electric vehicles remains in place under current law. That exemption means the benefit you get from packaging an EV through a novated lease is not counted as a fringe benefit for FBT purposes — which translates to potential pre-tax savings on both the vehicle cost and running expenses. With the economy growing and real wages recovering, more employees are now in a position where those potential savings are meaningful.
One thing worth being clear about: economic growth doesn't change the rules of novated leasing itself. The FBT exemption, the salary packaging mechanics, and the tax treatment are set by legislation — not GDP. What a stronger economy does is remove some of the hesitation people feel about locking into a multi-year arrangement.
Common questions
Does a growing economy make a novated lease a better deal?
Not directly — the tax rules are what drive the financial benefit. But a strong labour market and employment growth reduce the employment risk that comes with a multi-year salary packaging arrangement, which makes committing to a novated lease a more comfortable decision for most employees.
Is the EV FBT exemption still in place in 2026?
As of the date of this article, the FBT exemption for eligible battery electric vehicles under the threshold remains in place under current Australian law. You should confirm the current status with a licensed adviser before entering into any arrangement — rules can change.
Which EVs are eligible for the FBT exemption under a novated lease?
Eligible vehicles must be battery electric (BEV) or plug-in hybrid (PHEV — with some conditions), first held and used on or after 1 July 2022, and priced under the luxury car tax threshold for fuel-efficient vehicles. Your novated lease provider should confirm eligibility for any specific model.
What's the difference between a novated lease on an EV vs a petrol car?
For an eligible EV, the FBT exemption means the entire benefit — including running costs like charging — can be packaged pre-tax with no FBT liability. On a petrol car, FBT applies and reduces but doesn't eliminate the tax advantage. The EV benefit is materially larger under current law.
Does millarX only do EV novated leases?
No — millarX arranges novated leases across EVs, hybrids, and conventional vehicles. The EV rules are just more favourable right now, so that's where most of the conversation is.