The AADA has has questioned the wisdom of a national government which applies tax penalties to the sale of safe, clean and reliable new cars.

It says the closure of car assembly in Australia “provides the Government with the opportunity to modernise the taxation of new cars and encourage renewal of Australia’s vehicle fleet”.

“The passenger vehicle tariff and the luxury-car tax are both relics of the past, which were designed for a time when Australia had a vehicle manufacturing capability.

“Local manufacturing no longer exists and these taxes merely make new vehicles more expensive,” AADA CEO David Blackhall said in a statement.

“New cars are already more safe, clean and efficient; abolishing these taxes will also make them more affordable,” Mr Blackhall said.

He said that new cars have all the attributes and benefits to society that mirror government priorities. Because new cars are safer, more environmentally friendly and more fuel efficient, they meet government goals of improving road safety, reducing vehicle emissions and bringing down energy costs for consumers.

“Making new vehicles more affordable will assist in achieving these goals,” he said.

Mr Blackhall also attacked moves by a number of state governments to soak motorists by announcing significant increases to duty on the sale of a car, including a proposal by the Queensland government to impose the country’s first state-based luxury-car tax.

“Increased taxes on the sale of new cars by various levels of government simply hurt the consumer and also hurt many of the people working in the automotive industry, such as sales staff, finance providers and workshop technicians,” Mr Blackhall said.

He called on the federal government, through the upcoming budget, to show leadership and remove inefficient taxes which make cars more expensive and undermine efforts to renew the vehicle fleet.

By John Mellor

Toyota Corolla