26th May, 2019 · Media Release

Victoria’s Car Tax Will Hurt

The Australian Automotive Dealer Association is concerned over news reports that the Victorian Government is considering adopting a state Luxury Car Tax.

“Reports that the Victorian budget will increase duty for vehicles over $100,000 are incredibly concerning for an industry which is currently doing it tough,” said AADA CEO David Blackhall.

“The new car retail industry in Victoria has contracted by more than 10 percent year to date, the most of any state in the country. Now is not the time for a tax grab, with people’s businesses and jobs at stake,” said Mr Blackhall.

“Victorian new car Dealers employ almost 14,000 people, provide millions in community donations and make a significant contribution to the state’s tax base,” he said.

“Victorian motorists have experienced significant hikes in duties under this Government and have made a strong contribution to the state’s coffers by paying rego and duties, while also shelling out GST, tolls and fuel taxes. At some stage you have to say enough is enough,” he said.

“This will be framed as a tax on luxury vehicles which will fall on wealthy individuals, but it is well known that these vehicles are often purchased by businesses. This will simply constrain economic activity,” he said.

“Furthermore, this tax will discourage people from buying some of the safest vehicles available in Australia. This is not a good outcome for a jurisdiction which according to the Australian Automobile Association is struggling to meet targets under the National Road Safety Strategy,” he said.

“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,” he said.

“This is of course, a tax on a tax on a tax – triple taxation, since stamp duty compounds on both GST and the Federal Luxury Car Tax. It’s a bad tax, a poor policy choice and will hurt the new car retail industry.”

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