Car buyers are about to be hit again. NSW opposition wants to increase stamp duty to 7 per cent on every dollar above $100,000 to help pay for more nurses in hospitals.
NSW Labor leader Michael Daley plans to increase stamp duty to the highest rate in the nation – to 7 per cent on vehicles priced above $100,000.
This would be in addition to the 33 per cent Luxury Car Tax and 10 per cent GST already levied on cars in this price range.
Mr Daley says he wants the “wealthiest in society” and “the big end of town” to pay for more nurses as part of his $240 million plan to legislate minimum nurse-to-patient ratios.
The proposal – which would be implemented if Mr Daley wins the upcoming NSW election – also includes an increase in stamp duty on yachts worth more than $200,000.
Mr Daley told Fairfax media: “These modest increases will pay for the ratios, these modest increases will transform our hospitals, this modest contribution from some of the wealthiest in our society will help everyone. This is fair. I am being completely upfront on how Labor will pay for our promises.”
However, there is no guarantee the proposal would raise enough revenue to deliver extra nurses because the new-car market is already suffering a downturn and luxury car sales have been in free-fall for 12 months.
Some industry analysts believe the policy could lead to job losses at dealerships if the sales slowdown continues.
Australian Automotive Dealer Association CEO David Blackhall said: “It’s a tax on a tax on a tax. It’s a triple tax, since stamp duty compounds on both GST and the Federal luxury car tax. It’s a bad tax, a poor policy choice and completely inappropriate given the worrying signs emerging in the NSW economy.”
Mr Blackhall said the car market was already weak and higher taxes would only hurt it more.
“New car sales declined by six percent in NSW in 2018, over three times more than any other state in Australia. The industry is struggling due to drought and a tightening credit market and does not need another tax hit. It’s very disappointing that the NSW Labor Party is targeting an industry that employs more than 22,500 people throughout the state, including many in rural and regional electorates, and contributes more than $700 million to the state’s coffers,” said Mr Blackhall.
He added that motorists already make "a strong contribution towards a healthy state surplus by paying rego and duties, while also shelling out GST, tolls and fuel taxes. At some stage you have to say enough is enough”.
A statement from the National Roads and Motorists’ Association said: “The NRMA would love to see more nurses, as would everyone. However, our members currently pay the fuel excise, then GST on the fuel excise, vehicle registration, CTP, the parking levy and tolls. Amongst all of that, we would have hoped the policy could have been able to find extra money for nurses without (extra) taxes.”
The proposed increase would give NSW the highest rate of stamp duty nationally, ahead of West Australia and Queensland, currently the two highest in the country.
The peak rate of stamp duty in Queensland is 6 per cent above $100,000 on certain models and West Australia applies 6.5 per cent stamp duty on every dollar above $50,000.
In NSW the stamp duty on the sale of cars is currently 3 per cent on vehicles priced less than $45,000 and 5 per cent on every dollar above that.
The opposition’s proposal would increase stamp duty to 7 per cent on every dollar above $100,000.
In NSW currently a $150,000 car attracts $6600 in stamp duty. Under the opposition’s proposal, a $150,000 car would attract $7600 in stamp duty versus up to $7000 in Queensland and $8125 in West Australia.
In NSW currently a $200,000 car attracts $9100 in stamp duty. Under the opposition’s proposal, a $200,000 car would attract $11,100 in stamp duty versus up to $10,000 in Queensland and $11,375 in West Australia.
In July 2018 Queensland overhauled its stamp duty and distinguished engine types and price points.
In Queensland, four-cylinder cars attract 3 per cent stamp duty priced up to $100,000 and 5 per cent for every dollar above $100,000. Six-cylinder cars attract 3.5 per cent stamp duty up to $100,000 and 5.5 per cent for every dollar above $100,000. And V8s, V10s and V12s attract 4 per cent stamp duty up to $100,000 and 6 per cent for every dollar above $100,000.
In West Australia cars attract 2.75 per cent stamp duty up to $25,000, 3.75 per cent from $25,000 to $50,000, and 6.5 per cent on every dollar above $50,000.
This reporter is on Twitter: @JoshuaDowling