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Luxury Car Tax Should Be Abolished - Not Increased

Andrew McKellar

The peak body representing the Australian automotive industry, the Federal Chamber of Automotive Industries (FCAI), has expressed concern that the Federal Government will raise the rate of the Luxury Car Tax in this week’s Budget.

"This tax is unnecessary and discriminatory and should be abolished altogether, certainly not increased," FCAI Chief Executive Andrew McKellar said.

"This is bad policy, there is no need for the Government to be increasing any tax in this Budget and it simply calls into question the motive behind this increase," Mr McKellar said.

"The tax is a distortion in the Australian market as it applies only to cars, not other so-called luxury items," he said.

"The fact is, anyone buying a new car already pays more than enough tax, people already pay GST, registration, stamp duty and they are paying taxes in the fuel that they use - there is no justification for this extra burden," Mr McKellar said.

Many family cars, both locally-made and imported, now fall into this category because the threshold has not kept pace with past changes in vehicle pricing.

"This tax increase will hurt many families who are looking at buying a vehicle with the space and safety features they want," Mr McKellar said.

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