Luxury car tax increase defeated in the Senate
September 4, 2008 by Karl Peskett
Rejoice luxury car fans. The proposed increase in the Luxury Car Tax from 25% to 33% has been scrapped, when it was defeated in the Senate today.
The Opposition, and Family First Senator Steve Fielding, voted against the bill today, which sees the LCT rate remain at 25% for vehicles over $57,000. Yesterday, Senator Fielding called for changes to the bill to make it fairer for farmers and tourism industry workers. Today however he sided with the Opposition and shut down the bill.
“The Government could do something if they wanted to to get this measure through,” said Senator Fielding. “There’s no way that Family First can vote for a bill that’s going to put up a tax for farmers and tourism, that’s just crazy. They’re already doing it so tough at the moment.”
Already, industry figures are leaping for joy, with a flurry of press releases and new pricelists hitting our inbox.
For example, the President and CEO of Mercedes-Benz Australia/Pacific, Mr Wolfgang D Schrempp, has welcomed the decision and issued this statement.
“This is a fantastic outcome for our customers, the environment and road safety. We are always open to work with the Government and all stakeholders on environmental and road safety initiatives that will benefit the whole community. It is unfortunate that we as an industry had to go through a process in opposing this measure when the opportunity was always there for a good public policy outcome,” Schrempp said.
The Federal Chamber of Automotive Industries chief executive Andrew McKellar has welcomed the Senate’s decision and says the tax increase, was contributing to a drop in sales.
“In August sales were down 19 per cent so it has certainly hurt the market,” he said.
Now, though, comes the paperwork nightmare. Dealers have been collecting the extra tax until a decision had been reached. How long it will take for that money to flow back to customers will remain to be seen. And whether this, combined with the latest interest rate cut, will see a spike in luxury car purchases will also be interesting.
Print it: 
If they want to start taxing cars, they should resort to taxing cars based on their weight. This would ecourage car manufactuers to build lighter cars which would in turn help with fuel economy, etc.
In actual fact, scrap that…they shouldn’t tax us at all!
now for the real biggie,will the alcopop tax follow.i don’t want a cruiser wagon,and i’m no spring chicken,but i’m sick to death of paying $8 a bottle for my prefered poison,wild turkey rtd’s.I’ve been labour since 1984,but no more…are you listening KEVIN07
As if car arent taxed enough;
GST, Hidden duties in Fuel, Stamp Duty and LCT.
They hit you four ways. If you add rego (basically a tax) you have 5.
fokcers!
in this world of carbon credits, carbon trading, carbon carbons etc etc, cars should be taxed in accordance with the emmissions from their manufacture through to and including their use. Not in accordance with the postcode where they end up living. That’d keep the pollies busy let alone the manufacturers working that out.
lol ironic that AMG benz’s are (can be under high rpm) some of the most polluting cars in the world and yet Benz was actually one ones who put forward the idea of replacing LCT with a Carbon based tax! still, good on them, its an interesting idea that could be very successful.
BTW Kinetic, weight isn’t always a bad thing, especially in a crash!
And who pays for this stuff up………………. US
laurie
Thank god for that. That was a stupid measure for possibly gaining revenue into Gov’t coffers that are so swollen they might burst uncontrollably at any minute.
But some industry “experts”, like
“The Federal Chamber of Automotive Industries chief executive Andrew McKellar has welcomed the Senate’s decision and says the tax increase, was contributing to a drop in sales.
“In August sales were down 19 per cent so it has certainly hurt the market,” he said.”
Where does he find the info that its the extra LCT that has caused the drop in sales of cars UNDER the LCT threshold, for they have fallen.
It may have caused a drop in cars above 57,000, but it hasn’t hurt Ferrari sales, so why doesn’t he say that the LCT increase has been good for Ferrari? Because it’s using statistics for B/S, that’s why.
It’s good to slow down for a breather every now and then, makes people realise that life is not all beer & skittles, and you can’t borrow more than you can ever repay and get away with it.
Good. It is ridiculous that in Australia we have to pay sometimes over double people in U.S, U.K, Continental Europe pay even after you take the exchange rate into account. I can understand paying more (we are a smaller market and it’d cost extra to ship it here) but over double is ridiculous.
“Where does he find the info that its the extra LCT that has caused the drop in sales of cars UNDER the LCT threshold, for they have fallen.” – Reckless1
Yes but luxury cars wouldn’t really follow the trend of cheap car sales. The rich stay rich even in bad economic times
oi CA, where did you get the pic of the victorian E93 M3? I didn’t realise they were out here yet….
Devil666, that was part of a photoshoot we did last weekend.
The roadtest on that car will be up in a week or two.
Dump the LCT all together and replace it with a tax based on 3 factors: Weight, Fuel consumption and Emissions.
It could be used as a green push. It certainly favours lighter cars because they are naturally more efficient (less mass to move).
Tax starts at 10%
If…
– the vehicle exceeds 1250 kg, then add 0.02% per kg over 1250 kg.
– the car uses more than 5L/100km combined, add 0.5% per litre over 5L/100km.
– the car exceeds 150g/km CO2 output, add 0.1% per 1g/km over 150g/km
Examples:
Commodore Omega would get the following:
Weight tax: 8.8%
Consumption tax: 2.95%
Emissions tax: 10.6%
Total tax: 32.35%
Porsche 911 Turbo
Weight tax: 6.7%
Consumption tax: 4.575% (average of urban and non-urban, couldn’t find combined)
Emissions tax: 13.9%
Total tax: 25.175%
Peugeot 307 HDi
Weight tax: 1.7%
Consumption tax: 0%
Emissions tax: 0%
Total tax: 11.7%
Certainly encourage lighter and more efficient cars. And if you still want to buy a LandCruiser, you are gonna pay for it.
Typical stupid socialist thinking. Slap more tax on, get more revenue. Except that it works the other way, as sales fall to the point where you end up with less. Now just get rid of the luxury car tax completely, and you’ll find that more money flows in as more cars get sold at lower tax per car.
Excellent news!
If the carmakers can make a light car that doesn’t use much fuel and burns the fuel it does use efficiently (ie low emissions), it won’t get taxed. Pretty simple.
We have a finite resource that we need to reduce our reliance on. People respond to wallet pressure.
Unfortunately the “Luxury” car is a easy target. As a real luxury item, we should be looking at boats and the other trappings of the wealthy ones if the Dudd Government really wants to add some more taxes.
Thats ok, I am sure Rudd will work out another way to tax us all.
The amusing thing of course is that when you see binge drinking beer/spirits (shots) are just as much a culprit as “alcopops” yet Rudd wouldn’t dare tax beer, instant election loss.
Never mind lets find another way to target those evil rich people, we don’t want them in Australia spending their money. Lets scare them off overseas by over taxing them.
Kim Carr was saying the government wants to reintroduce the tax for a vote in about a month’s time. I assume they’ll tweak it a bit, or maybe they’re just angling for a double dissolution…
Hey Stone, how do you suggest the government raises funds for health, defence, educations, pensions, etc? Replace taxes with a voluntary contribution?
I’m sure that would work. /sarcasm
SuperCujo: first off where do you pull 1250KG from? Thats less that a damn Scuderia! On a completely different topic, have you ever paid taxes before? If you did, you would know that they come from OUR INCOME! They have already taxed the money we earn, and there’s a 10% tax on everything we buy! No one is suggesting removing taxation completely (see how I haven’t resorted to sarcasm?), merely stop over-taxing us on items that are already over inflated (diesel, alcohol, cigarettes, cars). With these dam Carbon taxes coming in the government literally plans to charge us for living and breathing (We emit carbon dioxide, get it? Ha!).
Point is, Rudd had better put some of that surplus in the bank because something tells me the economy shan’t react favorably to his poor decisions.
I pulled 1250 as a weight that is the bottom of the small car segment. It doesn’t have to be 1250kg, it could be higher or lower. Just base the tax on weight.
And if taxes were removed from everything we buy (cigarettes deserve the extra tax), income taxes would have to go up. Alternatively, they could remove all income tax and put the GST on everything (maybe increase the rate too) and then only the people who buy stuff pay taxes. It would make the tax system a whole heap easier.
anti-spam word ‘bentley’ – how appropriate
Good one Fielding – you’ve saved yourself a few bucks on your next car so you can drive down to the local supermarket and laugh at all the poor old pensioners struggling to afford the necessities of life. Or drive by houses where families are being evicted because they can’t afford to pay their mortgage.
Maybe your party should be called Families Last.
Stevo thats an amusing comment about pensioners considering not too many pensioners are too happy with Rudd right now considering the way he has neglected them completely in the most recent budget.
Also why do we need MORE taxes? Howard and Co, were managing fine with large surpluses, the reason all these taxes go in now is that they can cover their asses when they screw up the budgets. Just like the useless labour idiots here in WA. Haven’t brought a single project in on budget or on time.
Whats the deal taxing so called luxury items – why do the rich have to pay for the poor. The have worked had yaers to get the trappings (necessities of life.).
Whu should I pay more for my new Porsche, so the extra can be dished out to some low life on the dole, who cant be bother working, and just complains about the so called rich.
Maybe they should tax people more if you dont work – might be a bit difficult in though.
The reason why Howard and Co managed to get surpluses every budget is that they were slowly draining money from the system (health and education) or not increasing the funding with inflation and population growth. Easy to create a surplus when you are giving out less money.