The FCAI today waded into the call after the South Australian treasurer, Tom Koutsantonis, said he will take the issue on the abolition of tariffs to today’s COAG meeting of state treasurers.

Mr Koutsantonis said getting rid of the tariffs and the LCT would allow governments to buy low-emission electric, hybrid and – in the future – hydrogen cars.

In a statement today from his office, he said: “By next year there will be no industry, and no jobs left to protect”.

“It is hard to justify continuing to raise revenue from Australians through these taxes beyond that point.”

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The FCAI’s chief executive Tony Weber said that it was time this issue came back on the federal government agenda as both taxes artificially suppress the affordability of new vehicles.

“The LCT, in particular, acts as a device to artificially inflate the price of vehicles offering the latest in safety and emission technologies,” Mr Weber said.

“The LCT is imposed at what can only be described as an arbitrary price level and doesn’t even pass the fairness test.

“Why is this tax imposed on the car industry when a raft of other luxury goods don’t get taxed the same way?”

Mr Weber agreed with Mr Koutsantonis’ view that with the cessation of volume local vehicle manufacturing 12 months from now, an import tax on vehicles would be no longer necessary.

“The Australian new vehicle market is one of the most competitive in the world,” he said.

Tesla 75D

“Reducing tariffs and taxes provides manufacturers with further opportunity to bring their new technologies to market at even more affordable prices.

“Artificial market mechanisms like the LCT have a stifling effect on the flow-through of important technologies like automated and electric vehicles.

“What we’re seeing now is a growing public awareness of the huge benefits that these technologies can offer us, and it’s refreshing to see calls for a review of inequitable taxes and charges like the LCT.”

Mr Koutsantonis said making it cheaper to import low carbon-emitting cars would help Australia meet the carbon reduction targets it recently committed to through the Paris Agreement.

He said the South Australian government would be in line to import the cars for its own 7000 vehicle fleet.

“We shouldn’t punish Australians who want to import these types of vehicles in order to limit their impact on the environment,” he said.

“Lifting these tariffs will also make these vehicles affordable for Australian families and businesses who want to do their bit to limit their impact on climate change.”

By Neil Dowling

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