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LCT hangs in balance

Taxing times: Luxury Car Tax debating is continuing, while car makers and importers continue to hold their collective breath.

The fate of the federal government’s luxury car tax looms

16 Sep 2008

THE fate of the federal government’s controversial luxury car tax (LCT) bill remained in the balance as GoAuto closed for publication last night, with the treasurer’s office continuing to negotiate with senator Steve Fielding prior to the proposed legislation’s return to the Upper House this week. The Federal Chamber of Automotive Industries (FCAI) was continuing to push for the bill – which will see the LCT increase from 25 per cent to 33 per cent – to be voted down after senator Fielding’s office issued a statement confirming that negotiations were continuing following initial talks.

The Family First senator, who has become the crucial link on whether or not the bill is defeated, held talks with treasurer Wayne Swan late last week and again this week, and is understood to have drafted amendments to the legislation which the government is considering. The bill is scheduled to return to the Senate for further debate today (Wednesday), although other matters before the Upper House could mean that a vote is not taken until later in the week.

80 center imageFCAI chief executive Andrew McKellar (left)told GoAuto that the situation remained “fluid”. “It remains in the balance, but the position of the (car) industry is clear,” he said. “We urge the Senate to once again reject the tax increase. It is clear that it is already causing damage to the industry. If it is passed it will cause further harm – and that will be to local manufacturers and to importing brands alike.

“So for that reason, we believe that the most responsible course of action is for the Senate to again reject it. “Our concern is that it is fundamentally flawed legislation. It is an unnecessary tax hike at a time when the economy is slowing. There is no way that you can make it fundamentally better through amendments – however well intentioned those amendments (from senator Fielding) might be.” Mr McKellar said it remained “impossible to judge” whether the latest moves from senator Fielding – who has already rejected the government’s proposed LCT hike on the basis that it penalised “tool of trade vehicles for farmers and tourism operators” – would see an amended bill approved. “It is really quite impossible to make this proposed tax increase any better through amendments – at the end of the day, the industry would be a net loser,” Mr McKellar said.

“I have absolutely no criticism of senator Fielding, or any of the other senators who are looking at these issues. Senator Fielding determined his position in the original debate, and I believe he was very correct in what he did. And I have no qualms that he is pursuing discussions as he is entitled to do.

“The industry encourages him to continue to pursue those concerns that he has articulated. But also, we have sought to highlight with him – and with the other balance-of-power senators – the adverse impact that this tax increase would have on the car industry.”

Read more:

LCT uncertainty to linger on

LCT compromise on the cards as sales plummet

Senate hears final LCT pleas

FCAI warns Senate on LCT

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