The Victorian Automobile Chamber of Commerce has sounded a warning that Melbourne’s automotive industry is starting to echo in all the wrong ways.
The chamber has found a fifth of Melbourne’s metropolitan automotive small-medium businesses have closed since 2014 as land tax skyrockets by 130%.
The Sydney Morning Herald reported in April land tax is one of Victoria’s largest treasury troves, shovelling $3.1 billion into the state vault, but the impost is killing Melbourne’s automotive trade.
As the results from a VACC survey finds “overwhelmingly” the increase in land tax is dramatically affecting automotive businesses, chief executive Geoff Gwilym says the Andrews Labor government has this information.
“We call this a hollowing out effect and we’ve alerted the government to this,” he says, having sent the personal accounts and data of automotive businesses on the verge of insolvency, closure, bankruptcy or relocation directly to treasurer Tim Pallas.
“Particularly over the last four years more and more automotive businesses are selling out of metropolitan areas, and moving out further, or shutting down completely,”
Gwilym says there are several member businesses telling the VACC they’re about to close because they cannot afford to pay increasing land tax.
“We’ve done a study of local government areas around metropolitan and in some cases the removal rate of businesses in automotive is up to 25%,” he warns.
“Metropolitan Melbourne has 22% less automotive businesses than it did four years ago,” Gwilym highlights.
Pallas has been criticised by the automotive industry for rapidly introducing the Victorian “super luxury tax” on new vehicle sales over $100,000 this year, which came into effect from June 30.
The VACC communicated directly with Pallas saying the super tax would only tighten the economic grip around the automotive retail sector’s neck.
“We’re urging the state government to think about land tax which in some areas of Melbourne has gone up 130% in two years,”
“We’re telling them you’re going to tax the automotive industry out and the services will go with them,”
“When you’re trying to attract consumers into metro areas around Melbourne, they won’t come if there are no services,”
The new VACC data is the chamber’s further attempt to prevent the collapse of even more automotive industry.
“You could say building apartments and growth is pushing businesses out, but the problem we can see is at some point you’ll be in metro Melbourne having to drive 10-15-20km out to get your car fixed,” Gwilym spells out.
“That’s not good for car use, it’s not good for road use,” he adds.
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