MY article published in NOTA 17/1/24 titled “Going Global” covered the so-called “luxury tax” on new vehicles.
This issue was again raised when discussing tax prior to the federal election.
As a long-time motoring buff, I’m strongly against that tax and have for many years tried to raise this issue with politicians.
However I’m also reminded of the truism which states “if at first you don’t succeed, then skydiving isn’t for you”. Governments get hooked on the income provided by unrealistic taxes and therefore will not do anything positive to correct an illogical position.
In July of 2000 the Howard Government introduced the so-called “luxury car tax”.
It was introduced for the stated reason of protecting Australian built vehicles, mainly by General Motors and Ford, with the rider that it also protected the jobs of workers in the vehicle manufacturing industry, from price competition by imported vehicles of similar shape and design.
That tax is still in vogue today.
Even in 2025 this tax adds 33 percent to each dollar paid above the threshold of $80,567 for normally aspirated vehicles and $91,387 for so-called “fuel efficient vehicles” meaning hybrid or electric models.
So, the popular Toyota Landcruiser 300 series is taxed an additional $5778.
In my view it is a huge stretch of credibility to call this vehicle a luxury model, to be taxed.
So why is this tax still necessary?
From observation, neither GM nor Ford are still building vehicles in Australia and Chrysler, Mitsubishi and Toyota have long gone from our shores too.
So how many auto workers’ jobs are now being protected by the luxury car tax?
I would have thought that no manufacturing would mean no jobs either.
The purpose of requiring this tax no longer exists, so why does it?
Just because the “tradie’s taxi” (4WD utes they use daily) might be fitted with leather seats, air conditioning and some electrical enhancements to make their time on the road safer and more comfortable, surely that doesn’t mean they and similar vehicles are luxury models.
Scrap the tax, I say.
By John BLACKBOURN
