Steane Klose | Jun 25, 2008

The VACC has labelled the Rudd Labor Government’s proposed Luxury Car Tax (LCT) a ridiculous shambles and we cannot help but agree.

The Rudd Government has announced that the LCT is to increase from its current 25 percent rate to 33 percent from July 1, irrespective of whether the increase passes Parliament or not. Given that the Senate has referred the Bill to a Committee that is not due to report until at least August 26 this year, this is a curious decision.

According to the VACC, new car dealers are feeling like the proverbial “meat in the sandwich”, with their customers on one side and the Government and the Australian Tax Office on the other.

“The LCT is to increase without the approval of the Parliament and, as a result, new car dealers are placed in an intolerable situation in having to apply a tax that is not yet law, and may not pass the Parliament when the Bill is returned”.

The VACC and its new car division (AADA-Victoria) are calling for the Government to reconsider the July 1 implementation date.

“Car dealers are faced with the ridiculous situation of having to say to customers –‘You can pay this tax now, but if the legislation is defeated we’ll give you a refund on the amount later’. Or, ‘if you don’t pay this tax, and the legislation is passed, we’ll get the tax off you later on’.

“How absurd. How could a sales contract possibly reflect such a ridiculous situation? Buyers will have every right to say, ‘it is not law and I don’t want to pay’,” VACC Executive Director, David Purchase, said.

Car dealers are questioning their right to collect a tax that is not yet law, while the VACC is suggesting that the LCT is an old, out-dated and unjust tax. Furthermore, applying it retrospectively will be a nightmare for car dealers and their customers.

This writer can smell that old familiar new government knee-jerk reaction aroma. Wanting to be seen to help the ‘common’ man, the Rudd Government is making some poorly informed and rather amateurish decisions that are affecting industry and livelihoods. An increased LCT and the equally ridiculous proposed Fuel Watch (known to actually increase prices) are dubious measures at best.

“The whole thing has become a farce. Regrettably, the only segment of the local vehicle manufacturing industry which is growing or maintaining sales, is caught up in the middle of this nonsense. The Government has failed to consult with the industry before introducing this Bill and as a result created an unworkable mess,” Mr Purchase said.

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