Shift in LCT level brings small saving

Car companies should be quick to react to the Australian government's slight concession on the Luxury Car Tax (LCT) threshold, implemented this week in time for the new financial year. The LCT will now be exacted from $59,133, compared to $57,466.

Toyota and Audi announced early they would pass on savings to customers; at best amounting to $500. That's a small reduction in pricing for car buyers, and far from preferences of manufacturers and motoring bodies with interests in a war against the LCT.

For Toyota the transaction affects buyers across a range of 20 (between LandCruiser and derivatives including Prado; Kluger and Tarago) models. The mass-market automaker suggests "the arbitrary threshold is not set at a level that most people would consider a luxury car."

Toyota's 'official' luxury arm, Lexus says the move is most welcome for customers of the brand; "putting money back in their pocket(s)".

Local spokespersons for luxury car brands including BMW have been vocal on its negative impact to the automarket since the LCT was increased from 25 to 33 per cent in 2008.

"We consider it essential to pass on every cent from the luxury car tax, which we've done immediately upon being notified to the change in the threshold," BMW Australia spokesperson Piers Scott told motoring.com.au.

"We've made no secret of our opposition to the luxury car tax; it's a misguided tax and a tax upon green technology and safer cars entering the Australian car market.

"We'd never seek to make profit on what we see as a good move in at least minimising the threshold, albeit by this minimal amount."

Without going into the long list of BMW models and potential buyers affected, Mr Scott says his company is "passing-on every single dollar associated with the move in the threshold... We're not talking large sums of money but there's no justification to hold on to it".

"There's maybe a couple of cars which will yield a fraction less, on the basis that they were very close to the threshold anyway, so the amount that will be applied might be under $500."

Among other luxury brands already offering LCT-beating models, Audi was also quick to announce it would pass on the difference.

"We believe it's important that our customers receive the full benefit of the LCT threshold change," said Audi Australia MD Uwe Hagen.

The change to the threshold does not go far enough, according to Victorian motoring body, VACC. "To say we are disappointed is an understatement," VACC Executive Director, David Purchase, said.

"This tax should be repealed, and yet, the decision proves the government has every intention of continuing to tax motor vehicles as luxuries.

"Many vehicles in the $59,133 and over price range are family vehicles featuring important safety technologies and are considered a necessity by the purchaser rather than an indulgence.

"When you think of luxuries, most people think of the excesses of the rich and famous, for example, a private jet or helicopter, yachts, jewellery or works of art, and yet, these extravagant purchases are not subjected to additional taxes.

"We repeat our call to the Federal Government to review the LCT with a view to scrapping it," Mr Purchase said.

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