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Common sense loses in LCT debate

By George Skentzos |

Common sense is yet to prevail over the current Luxury Car Tax debacle, with the Senate rejecting an Opposition bid to raise the luxury price threshold to $90,000.

 Common sense lost in LCT debate

- George Skentzos

The proposal was an acceptable compromise, maintaining the current LCT rate of 25 percent for vehicles over the existing $57,180 threshold, and applying the proposed 33 percent LCT to vehicles priced $90,000 and over.

The Coalition believes such a scheme would help to ensure buyers of 4x4s and people movers wouldn’t be slugged with the new 33 percent tax rate.

It is painful as a motoring enthusiast appalled by the current pricing of new vehicles in Australia to read completely misinformed comments made by our members of Parliament in arguing the case for the LCT rise.

Deputy leader of the Government in the Senate, Stephen Conroy, attacked the Opposition’s proposal with the following remark.

“By lifting the tax threshold, they are giving a tax break to Porsche drivers.”

Meanwhile the most affordable Porsche in Australia – the entry-level Cayenne 4×4, begins at $94,700 – above even the proposed threshold increase.

Its unfounded rhetoric such as this which masks the true climate of the Australian car market, with Mum and Dad car buyers being slugged with a tax hike by outdated legislation which has no real perception of what a luxury car really is in today’s society.


 
  • Gibbo

    You will find this debate on the 1st episode of Top Gear Australia next week and as the boys will point out $57,000 doesn’t buy a very luxury car today, it did when the tax was first introduced. $90,000 is probably cloer to the mark,for the 33% thresh hold but I think the 25% thresh hold should be increased to around $70,000

  • Flying High

    And such comments coming from some tax payer funded a-h who has all his transport paid for him. I have a much better idea.

    Scrap the LCT all together and vote for pollies to fund their own way to work and for work functions, just like we, the tax payers, do every day. Ignorant morons.

  • Kyle

    “By lifting the tax threshold, they are giving a tax break to Porsche drivers.”

    This comment by our Labour politicians in power has me irate. They are insulting our intelligence. What Porsche can you buy for $57K? Please I would like to know! I have voted Labour all my life but these bunch of clowns have forced me to vote Liberal at the next federal election for the first time ever. I’ve had a gut full of carbon trading and Kevin Dumb’s constant need to go overseas and show the world he can speak Mandarin while our economy is going down the toilet.

    Any sensible and genuine government would raise the threshold to $100K cars if they only wanted to charge the rich for the privilege of driving luxury cars.

  • Captain Mainwaring

    Haven’t you dopes worked out yet that the whole idea of LCT was always, and will always be, to give additional protection (over and above the tariff on imports) to locally-produced cars? It’s been a complete failure, as despite the impediments, imports continue to grow in market share. Time for a dose of free-market reality. The Australian car-making industry is on its last legs, guys.

  • Chucky

    Captain Mainwaring Says:
    September 23rd, 2008 at 7:39 pm
    Haven’t you dopes worked out yet that the whole idea of LCT was always, and will always be, to give additional protection (over and above the tariff on imports) to locally-produced cars? It’s been a complete failure, as despite the impediments, imports continue to grow in market share. Time for a dose of free-market reality. The Australian car-making industry is on its last legs, guys.

    ———————————————————————————————————————-

    The LCT affects both Australian made and imported cars. The whole purpose of increasing the tax is just as a quick way to grab some more cash; it has no logical purpose otherwise.

    The Greens have amended the bill though, so if these a-holes do manage to lock in the increase in LCT, get ready for cheaper diesel models which will pay no LCT (as long as they are under $75,000).

  • Chucky

    So if you’re thinking of buying a premium Euro between $60k and $75k, the Merc C220 CDI, Audi A4 2.0/2.7 TDI, and BMW 320D will become a lot more enticing since you will be saving thousands, possibly upto $4,000 by my calculations. So better not waste any time after they implement this increase, otherwise when they realise how much money they are losing due to people dodging the LCT, will tax the diesels too.

  • Kyle

    Captain Mainwaring Says:
    September 23rd, 2008 at 7:39 pm

    Haven’t you dopes worked out yet that the whole idea of LCT was always, and will always be, to give additional protection (over and above the tariff on imports) to locally-produced cars? It’s been a complete failure, as despite the impediments, imports continue to grow in market share. Time for a dose of free-market reality. The Australian car-making industry is on its last legs, guys.

    —————————————————

    You crack me up. You’re the DOPE buddy. The LCT affects and is paid on locally built cars too fool!

  • Austin

    After the confusion and misunderstanding about short-selling and market stabilisation…I don’t expect anything good to come from the even less knowledgeable people tasked with managing a car tax, in fact I doubt they even understand the concept of inflation for starters given the static “Luxury car cut off” price point that has been used for the last however many years…

  • RoFlmaTiC

    To be a devils advocate – raising the tax threshold to 90k is still a tax break to porsche drivers, they will be paying a few thousand less for their cars as less of the gross price is taxed.

    So the statement is technically correct.

    But don’t get me wrong I agree wholeheartedly with the sentiment of the article.

  • You voted for it!

    Nope i refuse to enguage in this debate. At the last election whenever i viewed my opinions that i thought the liberals should be re-elected i was howled down by kevin rudd fans screaming about work choices and “working families”. Infact they tended to be overly aggressive about the whole thing, claiming that i was “un-australian” for not wanting to support the “battlers” by voting for labor.. please. Everyone got so caught up in the whole anti-work choices hoopla, you know that you where all played like fools by the unions right? work choices wasn’t nearly as bad as the unions made out, now they are even attacking rudd because he hasn’t taken us far enough back into the 1980′s regarding workplace legislation! All the unions where worried about is loosing membership because workchoices reduced their relevance, so they fought it hard, and now rudd hasn’t quite re-instated their relevance enough, so they are again fighting! But you all bought it! so too bad ey?

    Behind it all i could see how bad it was going to be with rudd, but seemingly the majority of australians couldn’t. So i guess i will just sit here in smug satisfaction and remind anyone who will listen that hey, you voted for the fool! It’s not like you wheren’t warned….

  • Chucky

    RoFlmaTiC Says:
    September 24th, 2008 at 12:20 am
    To be a devils advocate – raising the tax threshold to 90k is still a tax break to porsche drivers, they will be paying a few thousand less for their cars as less of the gross price is taxed.
    ———————————————————————————————————————-

    I know you are just playing DA, but it is not a tax break unless you reduce the amount of tax they pay. Bringing the level to $90k would just mean that the increase in tax that they pay won’t be as much.

    Looks like the bill has passed anyway, so C220 next year here I come.

  • http://faster DanMan

    Yes well i deal with LCT every day in my job. Poor old Australia only has 20 million people and we want to play with the big boys like N. America, India and China. We also want a medical system that will cope with all our mums and dads getting old in the next ten years..
    LCT is a flawed concept in it’s current form and costs me so many lost deals as a dealer… When you calculate LCT rego, CTP and stamps (3%) The GOVT gets a massive cut of a Porsche (probably 17000 of a boxster sale).
    So yes i hate it but where is the tax going to come from to pay for 16% of Australia being out of the workforce (baby boomers)? two sides to every argument..

  • http://caradvice.com.au Fourwheelbikie

    So the ignorant socialist ratbags of the ALP don’t know how much a Porsche is. I doubt that any of them have any idea about prices generally. They certainly have no idea abut managing the economy. However none of this is news. As “You voted for it” points out, there was a clear choice in Nov 2007 and the electorate chose higher interest rates, higher unemployment, a slowing of the economy and a bunch of the most incompetent MPs to be in government. Even the ALP campaign showed KRudd’s use by date-Kev 07. The only ideas were for 2007, once in government no actio just inquiries. KRudd, please stay overseas and take the rest of that useless group called the government and stay overseas. Australia would be better off.

  • Kris Skeggs

    All these comments make it obvious the type of people that read this website. I come from a working class background with parents that would never even have the option of purchasing a car over $50k. I’m now a qualified doctor that will soon easily be in the market for $100k cars and to be honest I couldn’t give a s*** about what level they tax luxary cars at. If your family/household can afford to buy a $50, $60 or even a $100k car then you have nothing to complain about ESPECIALLY THE “TERRIBLE ECONOMY”…what poor struggling australians you all are trying to save $5000 on your $100k cars!!! Don’t bother bringing your children to the Emergency Department I work in… god forbid it’s funded by such taxes. I love my evolution III but I love free healthcare and education too; how about you all care about some truly important things as well as what’s in your garage?

  • turbin

    Anti-spam: barina (the anti-LCT car)

    The LCT exemption for sub 7l/100km cars applies almost wholly to diesels. Did the Green idiots who pushed that through bother to check the government’s own Green Vehicle Guide? My cursory check shows that diesels are generally equal or worse rated compared to the equivalent petrol models due to particulate emmisions. Anybody got a more complete picture of the ‘green-ness’ of the sub 7.0l/100km luxury offerings??

  • STG

    Well said Mr Skeggs.

    I too work in the industry and can tell you that too many people complain about silly things and the whole concept of the pleasure of driving a car has been lost on people. Why buy a vehicle you hate and get no pleasure out of to try and save some tax or 1L/100km in fuel consumption?
    Those who still have a passion for cars are buying the vehicles they want and just shutting their mouths and working harder to achieve their dreams.
    People need to remember cars are a priveledge to own not a right and to some people even a $5,000 bomb would be a luxury in their lives.

  • CB

    Well what did people think when they voted for Labor?

    And I wouldn’t be surprised if most of the whingers here are Labor die hards.

    Liberals = reward for the hard workers and aspirationals. Labor = reward for the lowest common denominators of society, including union thugs. Overly simplistic, but it’s actually true.

  • Nathan

    CB Says:

    “Liberals = reward for the hard workers and aspirationals. Labor = reward for the lowest common denominators of society, including union thugs. Overly simplistic, but it’s actually true.”

    That’s probably right. And that’s exactly the problem. Liberals tend to go for or attract the “higher” earning levels of our society, Labor the “lower”. But what about the middle? The only hope is the third option, which depending in what electorate you are in, that’s either Greens, Family First, Independent or nothing at all..

  • Marcos

    Well all i can say is this, SERVE YOU PEOPLE RIGHT WHO Voted in that mother farking weasel arrogant cannntttt Kevid DUDD and his mates……it has gotten worse an worse and worse under this pys ant……if they think that $57,000 is a luxury to have every possible safety feature added to the car to safe guard your family, then sheet i have been looking at the wrong type of luxury cars since i was i kid.
    and no im not a luxury car buyer at all, i cant even afford my own home….
    we told ya so…
    :)

  • Chucky

    STG Says:
    September 24th, 2008 at 10:29 am

    People need to remember cars are a priveledge to own not a right and to some people even a $5,000 bomb would be a luxury in their lives.
    ———————————————————————————————————————-

    So then why not stick a 33% luxury car tax on anything over $5,000 then? This is not some crappy 3rd world country where you would be happy just to have food on your plate everyday. A car is not a luxury, and in this country a $57,000 car is not a luxury car.

    The only people falling for this lie about taxing “luxury cars” are socialists who hate for others to spend their hard earned money on nice things.

    And Skegg, don’t start with this crap about the money being needed for healthcare or some other bs excuse. The extra revenue gained is hardly a drop in the surplus bucket, and it will be wasted on some more stupid talkfests where nothing gets done. This tax was totally unecessary and will affect middle income earners the most.

  • Flying High

    amazing how this type of story brings out the Liberal and Labor supporters to vent their frustration. You would do well to keep in mind it was the Liberals who introduced the tax so no point in wasting your breath on how criminal Rudd and co are.

    If any of you lot fail to see that neither of these two parties are interested in anything other than that which would keep then in power you are a fool. Why would you do anything that kills off your own income?

    The biggest problem is that we, as Australians, will sit back and take just about anything dished out to us by those in power at a given point in time.

    Probably best to take a leaf out of Frances book, where in response to an unpopular decision taken by politicians hundreds of thousands of people take to the streets to remind their pollies why they are there.

    hmmm… Not likely to ever happen here….

  • Laurie

    Raising the price of so-called luxury cars will inevitably lead to an increase in prices for more modest cars.
    The trickle down effect will see to that.
    KRudd must realise that eventually “his battlers” will realise that inescapable fact.

  • JF

    Flying High, check your facts before you make accusations, it was Keating who brought this tax in while he was Treasurer. The Libs bumped the threshold up to 57k and had hoped to scrap the tax when the GST was introduced but changed their mind when they were reminded that it would kill the used car market (for “luxury cars”).

  • http://Citroen Boggy

    Im with you marcos,Ozzies have short memories.

  • Flying High

    JF – you are quite right – it was introduced by Keating. But it has no place in the current GST environment which was introduced by the Libs – and it rightly should have been removed. As for their excuse that it was instead kept to prevent it killing off the used car market, that is, as we all know, a crock.

  • realcars

    Money has to come from somewhere.

    Either this or increased income tax or GST.

    Labor and Liberal well in a perfect world the Liberals would never gain power because they tend to screw most of their constituents. Think about it next time Joe average tells u he votes Liberal.Theoretically 80% of the population should be voting Labor.

  • Laurie

    QUOTE : Realcars 25th Sept.
    “Money has to come from somewhere.
    Either this or increased income tax or GST.”

    Why – when they are already sitting on a $20B surplus ?

  • http://falcon David

    To the ‘average’ Aussie a $50k plus car is a luxury. If you have millions its peanuts.I dont give a toss about it as I will never own a ” luxury”car.Maybe the Govt.would be better off taxing cars based on fuel effeciency. More fuel efficent less tax. But I forget that would send GMH/Ford down the drain.Pollies always fiddle around the edges and never make the hard decisions.You know “core and non core promises”etc etc.

  • Kris Skeggs

    Chucky you’re a retard…

    If you can’t afford a $60k car because of tax then either buy a $50k car or save more money then buy the car you want.

    And when you’re done bitching about your $50k car, I’m sure some one can point you in the direction of the nearest ladies’ room so you can finish your crying there…

    And when you’re done fixing your make-up you can shove your new $50k car up your arse where your fat head is…

    What a tool!

  • http://. Naughtyius Maxiumus

    An endless sea of Dudd luvers slowing changing there tune on him…..can see you lot will take ages to register that the Milky Bar Kid is a mirage and smokes and mirrors. But hey you are warped in recall with Little John! Me thinks you wont walk from Dudd as you dont swing vote as fed too much UNION blurb and spin and have rights! FOOLS!

  • http://. Naughtyius Maxiumus

    You voted for it! Says:
    September 24th, 2008 at 7:04 am

    AGREE. CMFEU are deserting Dudd as he has caused angst with his stance on workers rights. I heard that on news some time back when they picketted him at Mackay on one of the rare occassions that he actually has been Downunder. I still snigger at this man and his ineptness and crasse super nerdy spin doctoring undereducated BS! Yes at last election was massive blah blah blah with workers rights and what not……fact is it has not changed and actually worse! Plenty of simpletons heard his blurb and liked… trouble is ALP is famous at it and things have not changed! The cost of living is worse and the simpletons who go back and blame last lot are too basic to reason with (i.e. it was not reflected with economic indicators at time by interest rate rises willy nilly).

    When one of you Dudd luvers have the balls to stand toe to toe with me…..come to electorate here or where you want to stand and will run against you and will quote reality and quoted words spoken by the ALP Circus chronies!

  • Chucky

    Kris Skeggs Says:
    September 26th, 2008 at 12:13 am
    Chucky you’re a retard…

    If you can’t afford a $60k car because of tax then either buy a $50k car or save more money then buy the car you want.
    ———————————————————————————————————————-

    Here we go again. This has nothing to do with affordability. I doubt that there are many if any people out there who suddenly can’t afford a car that they could previously because of the tax increase. This is just Robin Hood style tactics by Rudd to show his union mates he’s sticking it to the wealthier end of town.

    The fact that you support it just shows what sort of person you are. Lower car prices should be supported because it means that more people have access to cars that generally have more safety features and are more fuel efficient. These cars will end up being driven by P platers many years down the track, and I prefer that it be sooner rather than later instead of them having to buy some old bomb that just gets them from A to B.

  • Laurie

    It appears that this site is becoming a battle ground for views on politics.
    It is obvious that “Common Sense Loses in LCT Debate”.
    Which political party has done what and who voted for them is largely irrelevant.
    We are all stuck with the executive decision regardless of who makes it.
    That is an undeniable fact whether we like it or not.
    Criticise it (the executive decision) by all means if you wish however blaming individuals on this site is not only demeaning for the perpetrators but is a totally useless
    endeavour.
    It will get nobody anywhere so I suggest you get a trifle more effective and vent your frustrations onto politicians who you consider have outraged you.