McMillan Shakespeare shares dive after Rudd outlines tax change Salary packager McMillan Shakespeare ... shares slump. Shares in salary packaging company McMillan Shakespeare have plummeted more than 50 per cent, as Prime Minister Kevin Rudd's proposed tax changes to car leases begin to bite. After emerging from a week-long trading halt on Thursday morning, the company's stock hit a three-year low, falling 51 per cent to $7.42, wiping $549 million off its market value. Analysts expect they've seen the worst of price erosion, but the exact damage will remain unknown until after the election. James Lennon, of Ord Minnett, estimated shares would steady between $8 and $9. He said this was based on half the company's novated leases being for private use, which would equate to a 30 to 40 per cent hit to earnings. But he said McMillan was doing itself no favours. In a statement, the company announced it would suspend all communication with investment analysts, shareholders and the media until after the election "unless the position becomes clearer prior to then," which meant analysts had to rely on speculation as to McMillan's exposure to the changes. The government announced last week it would tighten fringe benefit tax guidelines on novated car leases as part of a plan to generate $1.8 billion to help pay for scrapping the carbon tax in favour of an emissions trading scheme. Under the plan, the current statutory formula will be abolished for new leases, leaving the log book method that requires an employer to track the costs related to each car, and to estimate the business use by using employee-completed log books. Opposition Leader Tony Abbott has announced he would scrap the changes if elected. But even if the changes were overturned, Mr Lennon said investors would remain wary of the company. "There has always been this risk with this stock," he said, adding he expected revenues to recover, but not the share price, which was trading as high as $18 before the trading suspension. Mr Lennon said it would have been better if the changes had been implemented gradually, allowing a "grandfather period" for business to adjust. In a statement, McMillan Shakespeare's chief financial officer, Mark Blackburn, criticised the government's decision, saying it abolished the 28-year practice of relying on a statutory formula to quantify the amount of fringe benefit tax payable. "[The proposed change] is creating disruption within the industry and is expected to lead to an unknown and unquantifiable decrease in demand for novated leases and an adverse impact to the business overall," Mr Blackburn said. While Treasurer Chris Bowen's proposals are yet to pass Parliament, Mr Blackburn said the changes would have a "material adverse impact" on the company's future earnings. He said McMillan is expecting a net profit of between $61 million and $63 million for fiscal 2013, representing a 15 per cent increase on the prior financial year.