Under the Rudd Labor Government, the LCT is set to increase from 25 to 33 percent commencing July 1 - irrespective of whether it has passed Parliament or not.
The Federal Opposition has used its majority in the Senate to refer the Bill to a Committee that is not due to report until at least August 26 2008; however the new LCT increase will come into effect regardless.
As a result, the VACC has urged that the Government reconsider its July 1 implementation date.
“The LCT is to increase without the approval of the Parliament and, as a result, new car dealers are placed in an intolerable situation in having to apply a tax that is not yet law, and may not pass the Parliament when the Bill is returned."“Car dealers are faced with the ridiculous situation of having to say to customers –‘You can pay this tax now, but if the legislation is defeated we’ll give you a refund on the amount later’. Or, ‘if you don’t pay this tax, and the legislation is passed, we’ll get the tax off you later on’."
VACC Executive Director David Purchase has also advised that potential buyers in this situation have every right to say ‘it is not law and I don’t want to pay’.
“Car dealers are asking why they should collect the tax, when it is not yet law. They are furious the Government is prepared to risk their livelihoods in business by bulldozing a tax increase through and pre-empting the outcomes of the Parliamentary process."
Mr Purchase also regrettably acknowledges that that only segment of the local vehicle manufacturing industry which is growing or maintaining sales is caught up in the middle of this nonsense.
"The Government has failed to consult with the industry before introducing this Bill and as a result created an unworkable mess,” Mr Purchase said.