Petrol engine penalty? Hang on a minute, says car industry

Riley Riley

Federal Chamber of Automotive Industries (FCAI) has called for a “balanced approach” in response to the Greens’ call for a 17 per cent “luxury” car tax on internal combustion engine (ICE) vehicles.

Chief Executive, Tony Weber, said the Chamber welcomed the focus on environmental gains and scheduled tax and tariff relief for low emission vehicles, but warned that a pragmatic approach was critical.

“Make no mistake, we certainly need a focus on encouraging low emission vehicles here, but it’s madness to consider a mass ‘luxury’ car tax on ICE vehicles,” he said.

“Are you going to place a luxury car tax on a $14,000 vehicle just because it has a (low output) petrol engine? Where’s the sense in that?”

The Greens policy has five main elements:

  • Set emissions standards for new petrol and diesel cars in line with American and European regulations
  • Set mandatory targets for electric vehicles sales, via a cap-and-trade system with car manufacturers
  • Eliminate tariffs, stamp duty and GST on new electric car sales to make them more affordable, plus three years of free car registration
  • Increase the luxury car tax from 33 per cent to 50 per cent (levied on the value of a car above $65,000).
  • Establish a $150m fund to help expand the network of charging stations for electric cars

Weber pointed to the strong emissions reductions already achieved by the automotive industry, without government support – over the past 10 years.

“While it’s great to see the environmental focus of the Greens, and the fact that they are ticking some strong low-emission friendly boxes, the FCAI supports a considered approach encompassing the following:

  • A strong and meaningful environmental policy from the Government, including pragmatic and achievable emissions and carbon reduction targets
  • Support of low emission technologies in both a policy and a regulatory context
  • Adoption of innovative technologies in Government fleets and Government agencies
  • A structured approach to planning and construction of infrastructure, including extensive recharging and refuelling networks
  • Clear targets for the uptake of low emission vehicles
  • Consideration of incentives to encourage the uptake of new low emission technologies which could include:
    • Tax and duty relief
    • Lower registration costs
    • Across the board removal of the Luxury Car Tax (LCT), including on low emission vehicles
    • Priority transit lanes, parking, and
  • Clear and regular communication to all stakeholders, including consumers, regarding the Government’s intent in terms of endorsement and adoption policies,” Weber said.
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