Green groups attack luxury car tax

The Rudd Government’s luxury car tax is under fire from a surprising source – Green Party senators, who could hold the key to whether the law actually passes through Parliament.

The Rudd Government’s luxury car tax is under fire from a surprising source – Green Party senators, who could hold the key to whether the law actually passes through Parliament.

Greens senator Christine Milne has expressed concern that the tax will hit some of the most advanced and fuel efficient cars on the road.

“You’ve got a situation where some of the high-end vehicles, which will be subject to a luxury vehicle tax, will be some of the most efficient on Australian roads. That’s the technology, not necessarily the brands, that we need to encourage,” Milne told The Australian Financial Review.

The Greens want to talk with the Government about a broader car tax proposal that could see vehicles taxed on a sliding scale depending on their fuel efficiency.

While the Greens are yet to officially decide whether or not to support the luxury car tax, Milne’s comments will add weight to car companies angry with the proposal.

The luxury vehicle tax, which is applied to vehicles worth more than $57,000, increased from 25% to 33% on 1 July, lifting the price of a $100,000 vehicle by about $2600.

In early August, the managing director of Audi Australia, Joerg Hoffman, told a Senate inquiry that the increase led to a 25% fall in prestige car sales in July alone.

Opposition leader Brendan Nelson has said that the Coalition would wait until the Senate inquiry reports on the economic impact of the tax before deciding whether or not to support it.

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• Car dealers reeling from luxury car tax increase