{"id":14078,"date":"2022-07-26T03:45:16","date_gmt":"2022-07-25T17:45:16","guid":{"rendered":"https:\/\/www.privatefleet.com.au\/blog\/?p=14078"},"modified":"2022-07-26T03:46:04","modified_gmt":"2022-07-25T17:46:04","slug":"is-it-time-we-scrap-the-luxury-car-tax","status":"publish","type":"post","link":"https:\/\/www.privatefleet.com.au\/blog\/buy-new-car\/is-it-time-we-scrap-the-luxury-car-tax\/","title":{"rendered":"Is it Time we Scrap the Luxury Car Tax?"},"content":{"rendered":"

Following changes to the\u00a0thresholds for the luxury car tax, the future of the impost is once again in the spotlight, especially now that\u00a0Australia’s days of local auto manufacturing are well and truly in the rear-view mirror. The\u00a0measure was first introduced with the intention to help protect local manufacturers amid the slew of high-spec vehicles that one can only assume were deemed to be an \u2018impediment\u2019 to jobs and the economy.<\/p>\n

On the back of the changes in 2022,\u00a0the 33% tax applying to imported vehicles less than two years of age\u00a0now covers a\u00a0value in excess of $71,849 including GST, or a threshold of $84,916 for fuel-efficient vehicles where that car consumes no more than 7L of fuel per 100km.<\/p>\n

Given the tax contributes hundreds of millions of dollars to the Federal Budget, it\u2019s not like the government doesn\u2019t have an incentive to prop up another tax as long as Joe Public foots the bill. That\u2019s despite the fact that the tax has long been considered a thorn in the side of the European Union and negotiations of a free trade agreement. But while the amount of tax proceeds may seem\u00a0vital to the country, the costs to administer the tax are arguably as much as what it reaps.<\/p>\n

 <\/p>\n

\"\"<\/p>\n

 <\/p>\n

What circumstances have changed?<\/span><\/h3>\n

One of the key differences now, as opposed to when the tax was first introduced, is that the new car industry is in\u00a0a dire position thanks to the global supply chain crisis, as well as issus securing stock. Interest rates are\u00a0now on the rise, but even\u00a0at historic lows,\u00a0the industry has been seeing sales slide for some months now after a brief respite.\u00a0All the while, more\u00a0buyers are transitioning to SUVs and other more-affordable and reliable brands.<\/p>\n

In addition, the impact of the tax on some of those hardest-hit by natural disasters has started to unfold. More specifically, many farmers have bought vehicles that are slapped with a luxury car tax \u2013 and no, they\u2019re not driving around in Mercedes AMGs or Ferraris for that matter, but workmanlike vehicles such as the Toyota LandCrusier or Prado \u2013 yet all the while, the effects of\u00a0natural disasters\u00a0continue to weigh on their livelihood. Motorists are ultimately the ones who foot the bill for the LCT, even though it was designed to be absorbed by dealerships.<\/p>\n

 <\/p>\n

\"\"<\/p>\n

 <\/p>\n

The reality of the situation<\/span><\/h3>\n

Frankly, at the end of the day, Australians shouldn\u2019t be slugged to protect an industry that no longer exists. The local manufacturing industry, while beneficial from a jobs perspective, was artificially supported for longer than was ever realistic or sustainable. In fact, it\u2019s easy to argue that the plug should have been pulled on the LCT earlier, back in 2017 when Holden ceased manufacturing operations.<\/p>\n

Even if the government has a vested interest in maintaining an otherwise unnecessary tax, the mechanics of it just don\u2019t make sense when not only has it not been tied to inflation – that would mean higher thresholds that are more ‘friendly’ to new car buyers to day – but we are supposed to be trying to encourage people to adopt fuel efficient cars. Yet, here we are, punishing motorists who purchase \u2018eco-friendly\u2019 vehicles. That the luxury car tax has lasted this long, is a true surprise, particularly if we\u2019re keen\u00a0to stave off\u00a0a potential recession. Let\u2019s not even get started on those unnecessary import tariffs either\u2026for now at least.<\/p>\n","protected":false},"excerpt":{"rendered":"

Following changes to the\u00a0thresholds for the luxury car tax, the future of the impost is once again in the spotlight, especially now that\u00a0Australia’s days of local auto manufacturing are well and truly in the rear-view mirror. The\u00a0measure was first introduced with the intention to help protect local manufacturers amid the slew of high-spec vehicles that […]<\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[227,52,58],"tags":[6229,4240],"class_list":["post-14078","post","type-post","status-publish","format-standard","hentry","category-australia","category-buy-new-car","category-driving","tag-lct","tag-luxury-car-tax"],"_links":{"self":[{"href":"https:\/\/www.privatefleet.com.au\/blog\/wp-json\/wp\/v2\/posts\/14078","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.privatefleet.com.au\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.privatefleet.com.au\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.privatefleet.com.au\/blog\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/www.privatefleet.com.au\/blog\/wp-json\/wp\/v2\/comments?post=14078"}],"version-history":[{"count":2,"href":"https:\/\/www.privatefleet.com.au\/blog\/wp-json\/wp\/v2\/posts\/14078\/revisions"}],"predecessor-version":[{"id":14080,"href":"https:\/\/www.privatefleet.com.au\/blog\/wp-json\/wp\/v2\/posts\/14078\/revisions\/14080"}],"wp:attachment":[{"href":"https:\/\/www.privatefleet.com.au\/blog\/wp-json\/wp\/v2\/media?parent=14078"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.privatefleet.com.au\/blog\/wp-json\/wp\/v2\/categories?post=14078"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.privatefleet.com.au\/blog\/wp-json\/wp\/v2\/tags?post=14078"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}