FCAI wants end to import tariff
And long-standing thorn in the side, the Luxury Car Tax, is also in the automotive industry's sightsThe Federal Chamber of Automotive Industries (FCAI) has backed calls from the South Australian treasurer for the repeal of the Luxury Car Tax (LCT) and vehicle import tariff.
Earlier this month, Tom Koutsantonis stated that he would recommend to the COAG (Commonwealth of Australia Governments) meeting of Treasurers that the federal government remove vehicle import duties and the LCT. The SA Treasurer's logic was founded on the local manufacturing industry ceasing to exist by the end of 2017. Ford has already closed its doors, and Holden and Toyota will follow suit within 12 months.
The long-held view has been that both import tariffs and the LCT were in place to shelter locally-manufactured vehicles from competitive vehicles built overseas.
"The Luxury Car Tax, in particular, acts as a device to artificially inflate the price of vehicles offering the latest in safety and emission technologies," said FCAI Chief Executive Tony Weber.
"The LCT is imposed at what can only be described as an arbitrary price level and doesn't even pass the fairness test. Why is this tax imposed on the car industry when a raft of other luxury goods don't get taxed the same way?
"The Australian new vehicle market is one of the most competitive in the world. Reducing tariffs and taxes provides manufacturers with further opportunity to bring their new technologies to market at even more affordable prices.
"Artificial market mechanisms like the LCT have a stifling effect on the flow-through of important technologies like automated and electric vehicles.
"What we're seeing now is a growing public awareness of the huge benefits that these technologies can offer us, and it's refreshing to see calls for a review of inequitable taxes and charges like the LCT."
Whether the federal government will see it that way remains to be seen, when it is dealing with what has been called a 'budget emergency' in the past, and presumably Treasury would prefer to have more revenue poured into the public coffers rather than less.
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