FCAI slams NSW Labor's proposed vehicle stamp duty increase

The Federal Chamber for Automotive Industries (FCAI) has condemned the New South Wales Labor Party’s proposal to increase stamp duty for vehicles over $100,000, labelling the promise as a “tax on a tax.”

If elected at the NSW election on March 23, NSW Labor plans to increase stamp duty on vehicles priced over $100,000 to 7.0 per cent of the purchase price - a significant hike to the cost of some vehicles. If Labor is elected, NSW would have the highest stamp duty in the country, above Queensland’s 6.0 per cent (above $100,000) and Western Australia’s 6.5 per cent (vehicles over $50,000).

Cars priced above $150,000 would have their stamp duty increased further to 9.0 per cent in the move, and a similar 9.0 per cent levy would be placed on yachts worth more than $200,000, a duty of $7600 and then a rate of 12 per cent over a $300,000 purchase price.

Currently, car buyers in NSW are subject to a 3.0 per cent stamp duty if the value of a car is below $45,000, and then another 2.0 per cent up to $100,000. 

All new car buyers in Australia are also subject to a federal Luxury Car Tax (LCT) of 33 per cent above $66,331, or $75,526 for what the government calls ‘green cars’, which are claimed to use less than 7.0L/100km. 

The stamp duty increase is projected to raise $240 million, with the funds claimed to assist in hiring 5500 extra nurses and midwives, though there’s no confirmation that the increase in stamp duty would pay for this as new car sales are currently in a downturn.

Some industry analysts believe the new policy could lead to job losses thanks to the slowdown - and it could be worse if the proposed new stamp duty levy is applied. 

According to Tony Weber, the Chief Executive of the FCAI, the proposed stamp duty increase is ”a tax on a tax”.

"And worse - it's a tax on technology and safety, putting Australian consumers at a disadvantage when they are unable to access these important innovations,” said Mr Weber.

Mr Weber also took the time to comment on the LCT, which still exists despite the fact it was developed as a protectionist measure for Australian automotive manufacturing - something that doesn't happen anymore.

"It has become redundant in the Australian automotive market and the time has come to cease the charade that this is a justifiable, sensible or even a necessary tax," Mr Weber said.

Do you agree with the comments from the FCAI? Let us know in the comments below.