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A SECOND luxury car tax, now being proposed by the NSW Labor Party, would hit the state’s vulnerable car retailing industry at a time when sales are falling up to three times faster than other states.

The ALP says that if elected to government in NSW it will more than double the stamp duty to seven per cent in $100 on cars costing more than $100,000 and nine per cent in $100 on cars costing $150,000.

The Australian Automotive Dealer Association (AADA) said it could not come at a worse time and termed it a “tax on a tax on a tax”.

AADA CEO David Blackhall said the triple tax was stamp duty which applies on both GST and the Federal luxury car tax.

Toyota LandCruiser

“It’s a bad tax, a poor policy choice and completely inappropriate given the worrying signs emerging in the NSW economy,” he said.

The Federal Chamber of Automotive Industries (FCAI) called it “appalling”.

FCAI chief executive Tony Weber said the luxury car tax (LCT) was reported by taxation expert Dr Ken Henry as having no economic benefit.

“It comes from a bygone era when the government tried to protect the local car-manufacturing industry,” Mr Weber told GoAutoNews Premium.

“It’s a tax on technology and interferes with advances in safety and emissions. The only good it does is increase revenue for government and it should be removed and the tax spread across other sectors of the economy.”

Mr Blackhall said NSW car dealers were “currently doing it tough” with new-car sales down six per cent in 2018 – more than three times any other state.

Maserati Levante Gransport

“The industry is struggling due to drought and a tightening credit market and does not need another tax hit,” he said.

“It’s very disappointing that the NSW Labor Party is targeting an industry that employs more than 22,500 people throughout the state, including many in rural and regional electorates, and contributes more than $700 million to the state’s coffers.

“NSW motorists have made a strong contribution towards a healthy state surplus by paying rego and duties, while also shelling out GST, tolls and fuel taxes. At some stage you have to say enough is enough.”

Mr Blackhall said the proposal is claimed to target buyers of luxury cars such as those driving Maseratis.

“Let’s be very clear, at that price point this tax will fall on a top-selling vehicle such as the Toyota LandCruiser,” he said.

“This is a car which motorists in regional and rural areas would describe as a necessity rather than a luxury.

“It will also make most of the electric vehicles available in Australia significantly more expensive, which makes a mockery of any attempts to promote the uptake of electric vehicles.

“There is already a luxury car tax which is levied by the Federal Government and this duplicate tax will only add to the cost of vehicles with advanced safety and fuel efficiency features.”

By Neil Dowling

Maserati Ghibli GranLusso

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