The peak body for car manufacturers has come out and taken a swipe the the New South Wales Opposition's plan to crank up stamp duty to 7.0 per cent.

The Federal Chamber of Automotive Industries (FCAI) has slammed a proposal from the NSW state opposition to raise stamp duty on vehicles over $100k, describing it as a "tax on a tax".

The NSW Labor party last week announced plans to make the state's stamp duty rate the nation's highest, to 7.0 per cent on vehicles prices above $100,000.

Michael Daley, NSW Labor leader, said he wants the "wealthiest in society" and the "big end of town" to fund more nurses as part of a $240 million plan to legislate better nurse-to-patient ratios.

The FCAI, which has previously railed against the Luxury Car Tax (LCT) and other levies making it harder for people to get into more sophisticated vehicles, said the proposal is a "tax on technology and safety, putting Australian consumers at a disadvantage when they are unable to access... important innovations".

"The Luxury Car Tax, which is levied on vehicles over $66,331, was originally implemented to protect the local manufacturing industry, which closed in 2017," said Tony Weber, FCAI chief executive.

"It has become redundant in the Australian automotive market and the time has come to cease the charade that this is a justifiable, sensible or even a necessary tax," he continued.

“Current discussions in industry centre around a considered withdrawal from the Luxury Car Tax. The suggestion that it should be extended is completely counter-productive and frankly, beyond belief."

Weber's comments were echoed by David Blackhall, Australian Automotive Dealer Association (AADA) CEO, who said Daley's idea is "a poor policy choice and completely inappropriate given the worrying signs emerging in the NSW economy".

At the moment, a $150k car attracts $6600 in stamp duty, a figure which would just to $7600 under the new proposal. A $200k vehicle currently draws $9100 in stamp duty, jumping to $11,100.