Luxury Car Tax to Increase in Budget

DRU842 · 11-05-2008, 09:07 AM

Sunday May 11, 12:06 AM
Fed govt will impose tax on luxury cars

The federal government will increase the tax on luxury cars priced over $57,000 in the first budget tax increase in more than a decade.

The tax increase, to be introduced in Treasurer Wayne Swan's first budget, will affect the sales of about 105,000 cars per year, News Ltd reports.

The tax will increase from 25 per cent to 33 per cent and is mainly aimed at high-end imported vehicles.

Ninety per cent of luxury cars are imported. The tax rise will also impact on locally produced vehicles such as the Holden Caprice, Holden Statesman, Ford's Falcon G6E and the Territory Ghia.

News Ltd reports that the tax will apply to the GST-exclusive value of cars that cost more than $57,123.

Mr Swan said people on six figure salaries were "doing pretty well in Australia".

"It's abundantly clear that there are some people who are receiving government benefits who are on very, very high incomes, who don't need them," Mr Swan told News Ltd.

"And we ought to have a discussion in Australia about whether we can continue to afford that."

http://au.news.yahoo.com/080510/21/16t23.html

AUIII XR8 MAN · 11-05-2008, 09:19 AM

While that gotta such, he doe's have a point. I wonder if the price of a new car that is close to the cut off point will drop in price to get around that tax as not to effect the sales figures.

**Stav** · 11-05-2008, 09:36 AM

Times are tough!!! With inflation spiralling out of control and the reserve banks going nuts with monetary policy to slow the growth ,interest rates have risen hurting the average family man on the street. This accounts for very large sector of the community.I think the tax is an extra way of slowing the excessive spendings down to get more control over the economy. While no new taxes are good its about time the upper income bracket shared the pain.Its not facing bankruptcy like home owners in any case.Its a case of they are reinning in the big spending which is making this country an unnaffordable place. The net result will be a better economys and a move towards more affordable homes.

ltd · 11-05-2008, 10:04 AM

They didn't mention this in the run up to the election did they? Of course not, it would have cost them votes. As for the inflationary effect, increased taxes is anti growth/productivity and stifles an economy. A chipmunk could increase taxes, and in this case we have a goose.
As for inflation, they have only talked down the economy which has led to a spate of wage claims which in turn puts pressure on inflation as people get paid more. We have already had strikes with the engineers, strikes with the nurses and strikes with the teachers; I really think they have no clue and if Rudds performance in Qld's Goss government is anything to go by, then people should be very worried.

andrewts · 11-05-2008, 10:19 AM

Quote:

Originally Posted by Stav

Times are tough!!! With inflation spiralling out of control and the reserve banks going nuts with monetary policy to slow the growth ,interest rates have risen hurting the average family man on the street. This accounts for very large sector of the community.I think the tax is an extra way of slowing the excessive spendings down to get more control over the economy. While no new taxes are good its about time the upper income bracket shared the pain.Its not facing bankruptcy like home owners in any case.Its a case of they are reinning in the big spending which is making this country an unnaffordable place. The net result will be a better economys and a move towards more affordable homes.

I agree wholeheartedly, quoted for truth!

Turboconvert · 11-05-2008, 10:39 AM

I agree with you stav. LTD, thou you were right in saying that taxs are anti growth and can stifle the economy. They are also a tool that can be used to slow spending in the economy to keep inflation down or even bring it down when it starts to get out of hand. I can not comment really on the rest of rudds policies (not really subject to the original post anyway). But with current inflation, it does need to come down and this tax (as unpopular as it may be) will help with that. But in saying that, the rudd government does need to be carefull with increasing taxs beyond the point were it will help with the economy in its current situation. Every economy needs inflation, but in saying that, if inflation is allowed to continue on the uprise and not kept in check, it WILL (and I stress will) lead to a recession in the economy, atleast in a very big part. Which could be as bad as the one that keating (I believe, to young back then) lead us to or even worst, similar to that in the 1930's. Please LTD dont take this as a personal attack, this post is not intended in the fashion. It is just ment to be one view on current economics.

ltd · 11-05-2008, 10:53 AM

Quote:

Originally Posted by uteaddict

I agree with you stav. LTD, thou you were right in saying that taxs are anti growth and can stifle the economy. They are also a tool that can be used to slow spending in the economy to keep inflation down or even bring it down when it starts to get out of hand. I can not comment really on the rest of rudds policies (not really subject to the original post anyway). But with current inflation, it does need to come down and this tax (as unpopular as it may be) will help with that. But in saying that, the rudd government does need to be carefull with increasing taxs beyond the point were it will help with the economy in its current situation. Every economy needs inflation, but in saying that, if inflation is allowed to continue on the uprise and not kept in check, it WILL (and I stress will) lead to a recession in the economy, atleast in a very big part. Which could be as bad as the one that keating (I believe, to young back then) lead us to or even worst, similar to that in the 1930's. Please LTD dont take this as a personal attack, this post is not intended in the fashion. It is just ment to be one view on current economics.

No mate I don't take it as a personal attack, I just have a problem with taxation being used as a tool to control an economy when we are one of the highest taxed nations in the OECD. I think people should be outraged that we are being taxed again, and again and again when it comes to our cars, and there is no way for anyone to avoid it. Buy the car? Pay GST (before sales tax at 22%) Register the car? Pay road tax and then pay Stamp Duty 3% tax. Buy some petrol? 50% tax with both excise and GST levied on that tax. Drive on a road? Pay taxes in tolls.

The whole class welfare crap spewed out by the ALP is discriminatory in the extreme and ironically is done by a PM who is worth over 130 million.
Finally, as for reigning in an economy taxation is the most worthless tool particularly when the extra money goes to the government. It is also inflationary.

Frankly, if the government wanted to effect inflation they should abolish the GST or excide on fuel, not like they recently increased it on Diesel which flows on to transport costs affecting grocery and other goods prices which has added to inflation. 2.3 billion on climate change? I bet Al Gore will get even fatter over this as he owns the company from which we buy the Carbon Credits. Yes, the economy will go into recession but not from people on more than 100K, more from this governments ineptitude.

AUIII XR8 MAN · 11-05-2008, 10:54 AM

LTD, how eles do you slow the spending of those that have money to buy such items with out it effecting those that don't have the money. It's much better to put the tax up on high end luxury items, then put the intereste rate up again. I know it going to hurt some business that either buy or sell these cars.

XR Martin · 11-05-2008, 11:32 AM

The GST will go up next, 12.5% to try and 'slow' the economy.

FPV 5TH · 11-05-2008, 11:53 AM

Does anyone really think increasing luxury car tax will make a difference to the upper salary earners? The people who it really hurts are the middle income earners who just manage to buy themselves a car that falls into the luxury tax bracket. Just another tax grab at our hard earned dollars. Will the economy suddenly get better now they are increasing luxury car tax? Of course not. Will they drop the tax off when the economy is good again? Definately not. At least they could have left out the Australian made models from this increase.

Brent · 11-05-2008, 12:00 PM

Wel, well.....didn't take too long for the true Labor colours to come out did it? One of the highest taxed OECD countries in existence, and BANG!, we'll just launch into yet another tax. Oh yeah, conveniently directed at the perceived "well off" people too.

A curb on inflation? Rubbish!!! Taxing a few thousand cars will have zero effect. Its simply an ideologically driven initiative that'll collect a few more tax dollars along the way.

See, there always has been a core element in the Labor party, firmly there from the party's left wing origins, that just cannot bend their little minds around the concept that some people have the hide to earn more than others. Some people earn more because they're lucky. Others though working 7 days per week. Others through careful financial planning. Whatever. However, Labor really doesn't care which way you've earned it.....fact is, you're a target. Because you're "well off". You never see it mentioned in the media. You sure as hell never hear Rudd saying it, but its there, deeply embedded in the Labor party psyche. And this is exhibit A.

If you really want to help 1st home buyers then cut back on the $10,000+ in statutory fees and charges that are an embedded cost in every new home building approval. If you want to limit inflation, then cut back fuel excise, or scale back GST.

We should get used to it though. This will no doubt be the first in any number of gems that'll come out from the Federal government over the next few years. The anticipation is killing me......

GTP-814 · 11-05-2008, 12:37 PM

there's one point that no one has touched & that is it will have an effect on employment. Take FPV & HSV vehicles which will be over $57k. If there is a down turn in demand because of the tax, manufacture will reduce placeing middle class workers, who this tax isnt supposed to effect, out of work, plus workers from the parts supply companies.

It was previiusly around $65k & based on inflation should have been raised accordingly.

Then for imported cars,when we all 'voted' for the GST, at 10%, it was supposed to apply to all value add products, but the Govts still kept import duties at much higher levels, so we are paying a tax on a tax. Now they want to increase the tax again. To high income earners in business, the extra tax will be absorbed by the business execs & passed onto the consumer through increase prices & more inflation.

I dont have the answers but adding a tax to the vehicles we aspire to just sucks.

Long live the KRUDD

JG66ME · 11-05-2008, 12:55 PM

Bent and GTP-814 said it for me.

deesun · 11-05-2008, 01:08 PM

$57,000 is too low and although I don't agree with the raising of this sort of tax at all it will hurt the real income earner as opposed to the high income earner. $100,000 would be a better figure but either one won't make diddly squat difference to the economy.

P6LTD351 · 11-05-2008, 02:16 PM

Quote:

Originally Posted by Lightning BF_GT

Does anyone really think increasing luxury car tax will make a difference to the upper salary earners? The people who it really hurts are the middle income earners who just manage to buy themselves a car that falls into the luxury tax bracket. Just another tax grab at our hard earned dollars. Will the economy suddenly get better now they are increasing luxury car tax? Of course not. Will they drop the tax off when the economy is good again? Definately not. At least they could have left out the Australian made models from this increase.

Yes but those middle income earners really can't afford these cars then if they're just scraping in. Luxury cars are exactly that - a luxury. Middle income earners may need to look at something a little more in their league. BTW people who are struggling don't need to buy a 'NEW' car. AFAIK, any car will get you from A to B. People need to choose something in their budget

P6LTD351 · 11-05-2008, 02:22 PM

Quote:

Originally Posted by deesun

$57,000 is too low and although I don't agree with the raising of this sort of tax at all it will hurt the real income earner as opposed to the high income earner. $100,000 would be a better figure but either one won't make diddly squat difference to the economy.

What's the real income earner doing spending $57000 on a car? I would think you would need to be a high income earner to afford a $57000 car. If not, that is why people are getting into trouble. Getting loans for a depreciating asset when they really can't afford it. I'd rather know that I OWN my old bomb, rather than driving around in a luxo model that the bank owns. For those people that should be buying these luxo cars, I don't think this increase in tax will impact them: because they are in the position to afford it!

ltd · 11-05-2008, 02:57 PM

Quote:

Originally Posted by AUIII XR8 MAN

LTD, how eles do you slow the spending of those that have money to buy such items with out it effecting those that don't have the money. It's much better to put the tax up on high end luxury items, then put the intereste rate up again. I know it going to hurt some business that either buy or sell these cars.

OK, firstly taxation should never be used as a tool to slow an overheating economy as once the taxes are put there, they are very rarely ever brought back.
We had in NSW the 3x3 tax on petrol which was supposed to mean 3cpl for 3 years. This was brought in in the early 80's. It is still there today but renamed as a state duty.
Secondly, the class warfare that always erupts when the left is in power serves no one. If you make wealthy people poorer in some idealistic socialist orgy then you will find the poor will suffer. Currently, there are thousands of investors who own properties which they rent to those that cannot afford to buy a house. Make their input costs go up then that will see rents go up and then the poor suffer.
It is seemingly inequitious the divide by those who earn 6 figures and those who don't, but typically those who are on lower incomes lead less productive lives and indulge in vices such as alcohol, tobacco and foods that equate to a lower level of health. They tend to require doctors and medicines from the PBS more often than those that invest in their health through gymnasiums health clubs.
They statistically represent a much lower membership in private health and a much larger usage of public health. If they reproduce they also use public education, a cost borne on the taxpayer. Really, if you add it up, the amount of money in both dollars and percentage wise that those on 100K+ contribute in taxation (remember we pay a higher percentage) as well as tax savings by not drawing as often on public utilities; the amount contributed far outweighs those that are poorer and rely heavily on the public purse. In many cases you will find the wealthier contribute more in taxes a year than those on lower incomes gross per year.

Finally, if they want to fix inflation then increase GDP, and tell the unions with outrageous wage demands to bugger off. Better yet, get rid of the useless state governments who p1ss their money away on nothing but inflationary enquiries and spin doctors.

ltd · 11-05-2008, 03:01 PM

Quote:

Originally Posted by Brent

Wel, well.....didn't take too long for the true Labor colours to come out did it? One of the highest taxed OECD countries in existence, and BANG!, we'll just launch into yet another tax. Oh yeah, conveniently directed at the perceived "well off" people too.

A curb on inflation? Rubbish!!! Taxing a few thousand cars will have zero effect. Its simply an ideologically driven initiative that'll collect a few more tax dollars along the way.

See, there always has been a core element in the Labor party, firmly there from the party's left wing origins, that just cannot bend their little minds around the concept that some people have the hide to earn more than others. Some people earn more because they're lucky. Others though working 7 days per week. Others through careful financial planning. Whatever. However, Labor really doesn't care which way you've earned it.....fact is, you're a target. Because you're "well off". You never see it mentioned in the media. You sure as hell never hear Rudd saying it, but its there, deeply embedded in the Labor party psyche. And this is exhibit A.

If you really want to help 1st home buyers then cut back on the $10,000+ in statutory fees and charges that are an embedded cost in every new home building approval. If you want to limit inflation, then cut back fuel excise, or scale back GST.

We should get used to it though. This will no doubt be the first in any number of gems that'll come out from the Federal government over the next few years. The anticipation is killing me......

Damn straight.
Well said.

Bossxr8 · 11-05-2008, 04:39 PM

I think 57 k is too low for a luxury car tax, I wouldn't consider anything around that price a true luxury car. It should be set higher than at least 75k. Why does it mention the G6E, thats only 46k. Even the G6E Turbo comes in under the threshold at around 55k.

lostdude · 11-05-2008, 04:55 PM

Isn't this only a 8% increase ? and we only get taxed whatever amount that goes above 57k?
If thats correct then if you can afford a 57k car its only a minimal amount of difference.
For a 67k car your only effectively taxed for the last 10k which even at 10% increase is only 1000 dollars.

i'm just speculating as i have no idea if thats how the tax works.

P6LTD351 · 11-05-2008, 06:02 PM

Quote:

Originally Posted by lostdude

Isn't this only a 8% increase ? and we only get taxed whatever amount that goes above 57k?
If thats correct then if you can afford a 57k car its only a minimal amount of difference.
For a 67k car your only effectively taxed for the last 10k which even at 10% increase is only 1000 dollars.

i'm just speculating as i have no idea if thats how the tax works.

That's right, in the paper today (I don't have it in front of me) the cost of a Territory Ghia will go up around $500. I really don't see an issue. Of course, I would rather there not be a luxury car tax from a buyer's point of view, but if you can afford $57000, you can afford $500. Let's face it, any 'NEW' car is a luxury. A second hand car will get you from A to B just the same (albeit maybe not as refined!).

calaway · 11-05-2008, 06:05 PM

I think it will be interesting to see what labour puts out in this years budget. I certainly hope for a number of reasons, that they are responsible, and have the strength to make tough decisions for the better of the country.

But of all the important, future determining issues, this is the one that gets the highlight today before the budget is officially done.

People should be allowed to work as hard as they want, and rightly enjoy the rewards of their hard work.

Increasing the tax on luxury goods is Labour policy of old. I was certainly one who was hoping for a little better from this new government.

P6LTD351 · 11-05-2008, 06:11 PM

Quote:

Originally Posted by calaway

People should be allowed to work as hard as they want, and rightly enjoy the rewards of their hard work.
.

I agree with you there. Too many times people who make something of themselves get punished while other's who have no ambition get all the handouts.

Unfortunately it seems that today's "I want it now!" society that puts everything on credit or loans has given us our high inflation and interest rates. I mean, when people are talking about buying a new car, how many are actually paying cash? I see teenagers with XR6Ts: Yeah they paid for it: right! (before I get flamed, yes there would be a small amount that may have saved and paid)

cob115 · 11-05-2008, 06:14 PM

wayn Swans first buget

: ,is the first buget of pain for all of us
,Labour have no idea ,hang on let me refrase that ,no friggen idea how to run a buget! or how to run a country, but they are experts at apearing to be doing some thing
,apearing to be in it for the little guy
i remember Whitlam idiot

: Hawk

: keeting

: ,intrest rates

: , good will, us againts them all of the spin yeh yeh ,
Oh i allso remember being out of work and a lot worse,
sorry to get all upset i just remember what it was like ,to the people who havnt been there
Get ready history repeats its self when it comes to labour

P6LTD351 · 11-05-2008, 06:17 PM

Quote:

Originally Posted by cob115

wayn Swans first buget

: ,is the first buget of pain
sorry to get all upset i just remember what it was like ,to the people who havnt been there
Get ready history repeats its self when it comes to labour

You don't need to apologise for being upset. That's what these forums are for: to put across your feelings. Let's hope history DOESN'T repeat.

Bud Bud · 11-05-2008, 06:32 PM

Quote:

Originally Posted by Brent

See, there always has been a core element in the Labor party, firmly there from the party's left wing origins, that just cannot bend their little minds around the concept that some people have the hide to earn more than others. Some people earn more because they're lucky. Others though working 7 days per week. Others through careful financial planning. Whatever. However, Labor really doesn't care which way you've earned it.....fact is, you're a target. Because you're "well off".

Spot On!

Oh and this is not good news for FPV or HSV for that matter either.

MITCHAY · 11-05-2008, 06:35 PM

Quote:

Originally Posted by eb2monty

I agree with you there. Too many times people who make something of themselves get punished while other's who have no ambition get all the handouts.

100% agree. I think it's a load of crap that higher income earners should have to pay massive amounts of tax just because they can afford to do so. Yeah that's equality right there!

:

You want to earn as much as possible only to get taxed harder. Where's the incentive in that?

Hell I get taxed harder because I technically have two jobs but earn not a lot.

I can tell you now through personal experience that a lot of people whinge about things being so expensive, yet take every day they can off work and spend what they can't afford.

I know there are genuine strugglers out there but the vast majority simply can't be responsible with money.

cob115 · 11-05-2008, 06:37 PM

Cheers eb2monty
iv become very concerned when it comes to labours spin of looking after people
When i was a young wipper snapper(not to long ago) well may be 20 or so years ago

: , i was all 4what they said ,but after seeing a few labour prime minsters and living through it
Eeegad !!ugly very ugly

history will repet its self

Smoke Pursuit · 11-05-2008, 06:41 PM

Quote:

Originally Posted by Stav

Times are tough!!! With inflation spiralling out of control and the reserve banks going nuts with monetary policy to slow the growth ,interest rates have risen hurting the average family man on the street. This accounts for very large sector of the community.I think the tax is an extra way of slowing the excessive spendings down to get more control over the economy. While no new taxes are good its about time the upper income bracket shared the pain.Its not facing bankruptcy like home owners in any case.Its a case of they are reinning in the big spending which is making this country an unnaffordable place. The net result will be a better economys and a move towards more affordable homes.

What about the average family man who wants to buy a decent car( maybe he doesnt drink or smoke, just wants a nice car)? Where does this leave him? As far as im concerned the Luxury limit should be higher, like 75 - 80 kay, i dont think some of the cars that fall into the 57 kay bracket are really that luxury...

If the governments really that concerned why not up the taxes on cigarettes and alcohol to slow up the lower end of the economy wasting their hard earned cash on this crap that costs us thousands in sickness etc.

The other point id like to raise is luxury car tax on aussie built cars?? If we wanna support the economy and the hands that feed us why not abolish luxury tax on these cars??

Neways i can see bad times ahead for alot of us..

Au2falcons · 11-05-2008, 06:53 PM

What next........I run my own business & speaking to my clients we had no work last time labor was in the chair, i'm only 25 so back then I didn't really take much notice.

Now i'm looking to move out of home.......can't rent a place because there is not enough available & as a first time renter you've got no chance over someone with a rental history. So i'm looking to buy my own which fortunately I can afford to just manage as a single bloke.

But if there is a recession & no work in my industry...................damn my head is really messed up at the moment.