Industry group warns against luxury car tax
Posted
The peak body representing the automotive industry has warned that a proposed tax increase on cars worth more than $57,000 would have a damaging effect on the economy.
A Labor majority committee report has supported an increase in the luxury car tax from 25 per cent to 33 per cent, but the Government will need the support of the Greens, Family First and the independent senators for the bill to pass.
A dissenting report from Opposition senators says the tax hike would be inflationary and would have a negative impact on people buying four-wheel drives, especially in rural areas.
Federal Chamber of Automotive Industries chief executive Andrew McKellar says the tax hike would hurt the car industry.
"It is actually economically irresponsible to impose this sort of tax increase at a time when we are seeing clear signs that demand in the economy is slowing," he said.
"That's been reflected in the new vehicle market and this particular measure, this tax hike, which is retrospective, only causes more damage as a result."
