ACT budget targets motorists with higher vehicle duty

The Australian Automotive Dealer Association (AADA) has criticised the ACT Government’s decision to increase motor vehicle duty rates for higher-emission vehicles, describing the 2026-27 Budget measures as another example of motorists being unfairly targeted to address the Territory’s budget challenges.

Under the new measures, higher rates of motor vehicle duty will apply to vehicles with increased emissions, adding costs for families, tradespeople and small businesses purchasing new vehicles in Canberra.

AADA chief executive James Voortman says the changes represent a concerning pattern of the ACT Government repeatedly turning to motorists for revenue generation.

“For the second year in a row, the ACT Government has chosen to increase taxes and charges on people purchasing vehicles,” Voortman says.

“Motorists are increasingly being treated as a convenient source of revenue to help address the Territory’s budget challenges. At a time when cost-of-living pressures remain significant, this is a disappointing outcome for consumers and businesses alike.”

The industry association expressed particular concern about the lack of consultation before the announcement, despite the significant impact on vehicle buyers and automotive retailers.

“The ACT Government and Treasurer have not meaningfully engaged with the retail automotive industry before introducing these measures, despite dealers being responsible for administering the Territory’s motor vehicle duty system and helping consumers navigate these costs every day,” Voortman says.

Policy should encourage fleet renewal

The AADA argues that government policy should focus on encouraging fleet renewal rather than creating additional barriers to vehicle purchases.

“New vehicles are safer, cleaner and more fuel-efficient than the vehicles they replace. Public policy should be encouraging consumers to upgrade to newer vehicles, not creating additional barriers to doing so,” Voortman says.

“The ACT Government should work collaboratively with industry to achieve its environmental objectives while ensuring motorists and small businesses are not unfairly burdened by additional taxes and charges.”

While the AADA acknowledges the Government has delayed previously announced registration indexation, the Budget indicates registration charges will increase significantly over the forward estimates period.