Senator calls for tariff and Luxury Car Tax abolition

Senator Cory Bernardi has told the upper house of Parliament that new vehicle import tariffs continue adding financial impost to the cost of some ordinary new cars.

Bernardi is calling for both import tariffs and Luxury Car Tax to be abolished as the automotive industry continues to advise government of its hindrance to safety, telling the Senate the former adds additional cost to the price of cars like the Toyota Corolla and Ford Focus.

Bernardi’s office acknowledges he misspoke on Thursday when referring to LCT in his speech, instead of the 5% taxed on new vehicle imports, both of which he says need to be stopped.

Senator Bernardi, despite the faux pas, has told the parliament he is a strong supporter of abolishing the impost on consumers and the wider automotive industry including dealers and manufacturers.

During his speech, Bernardi referenced the Australian Automobile Association’s “zombie tariffs” description, which it originally used to describe how the LCT protected the now defunct passenger vehicle manufacturing of Ford, Holden and Toyota.

Luxury Car Tax, currently charged for the 2018-19 financial year adds 33% to the retail, GST-inclusive price threshold of $66,331 or $75,526 for “fuel efficient” vehicles such as electric cars.

Bernardi noted that “former South Australian Labor Treasurer, Mr Koutsantonis, called for the axing of the luxury car tax, citing that it would improve access to electric, hybrid and hydrogen vehicles”.

Former SA treasurer Tom Koutsantonis said on Twitter back in February, “Time for Turnbull Malcolm to scrap the Luxury Car Tax on all Electric & Hydrogen Fuel Cell vehicles,” he said specifically of LCT.

“Because the Liberals chased our car manufacturers out of Australia this tax should now go,” Koutsantonis said.

Bernardi has also drawn on former deputy Prime Minster Barnaby Joyce’s comments in January this year, when he voiced his “support for axing the tax”.

The Australian Automotive Dealer Association says Canberra is hearing the industry’s points on removing both import tariffs and Luxury Car Tax, and that the peak body “supports the basic points made by Senator Bernardi”.

“These legacy taxes force up new car prices making it more expensive for Australians to drive cheaper, safer and more environmentally friendly new vehicles,” AADA chief executive David Blackhall told AutoTalk.