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Senators Urged to End the Luxury Car Tax Uncertainty

The peak body representing Australia’s automotive industry, the Federal Chamber of Automotive Industries (FCAI), has today provided evidence to a Senate committee highlighting the growing incidence of the luxury car tax.

“When the threshold was introduced in 1979, only 2.5 per cent of vehicles exceeded the limit and now it is more than 11 per cent,” FCAI chief executive Andrew McKellar said.

“Families, and particularly those living in rural and regional areas, will increasingly be adversely affected if the proposed tax increase goes ahead,” he said.

The FCAI used the hearings in Adelaide to call on the Federal Government to end the current uncertainty surrounding the tax increase by not pursuing the July 1 start date.

“This tax increase, if it is passed by the parliament, must not apply retrospectively,” Mr McKellar said.

The Australian automotive industry urged the Senate Economics Committee to make the following three recommendations;

1. Oppose the tax increase outright,
2. Increase the threshold to a level which will reduce the existing distortion in the market that results in four-wheel-drives and Australian-made vehicles being some of the most affected by the tax;
3. Amend the basis for indexation to ensure that in the future, the incidence of the tax does not expand above the original 2.5 per cent.

“It would surprise many people to know that Australia’s top-selling ‘luxury’ vehicle is not a Porsche, Ferrari, Rolls Royce or Bentley but in fact it is a Toyota LandCruiser,” Mr McKellar said.

“The safety of a four-wheel-drive is a necessity in most rural areas, certainly not a luxury”, he said.

For further information contact:
Sheena Ireland, Communications Manager
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