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AUSTRALIA: Senators urged to reject tax hike, again

By just-auto.com editorial team | 18 September 2008

The Federal Chamber of Automotive Industries (FCAI) in Australia has urged the Senate to again reject the proposed increase in the luxury car tax, that was rejected in a vote earlier this month.

The government wants to increase the luxury car tax from 25 per cent to 33 per cent as part of a wide-ranging tax review and is currently negotiating with different political groups to see what amendments may see the measure carried in a subsequent vote.

The Senate has agreed to debate the tax increase applying to cars costing more than $AU57,000.

But the Greens and Family First parties both want amendments made.

FCAI Chief Executive Andrew McKellar says what is proposed is potentially damaging to an industry already under pressure.

"The proposed tax hike is bad policy and will cause significant harm to the Australian automotive industry," he said.

"It is deeply flawed legislation and it cannot be improved through amendments, no matter how well-intentioned," he said.

"There is already clear evidence of the damage that this tax hike is having on the industry and it will cause further harm if it goes ahead," Mr McKellar said.

"The car industry should not be used as a political football in this debate," he said.

"There are real people with real jobs whose livelihoods are being affected by this tax hike," Mr McKellar said.

"The car industry calls on the Federal Government to withdraw the legislation and to undertake a comprehensive review of the taxation of motor vehicles as part of the review of Australia's future tax system being conducted by Treasury Secretary, Ken Henry," he added.

The government wants to increase the luxury car tax from 25 per cent to 33 per cent and is currently negotiating with different groups to see what amendments may be carried in a subsequent vote.

See also: AUSTRALIA: New vehicle sales tumble