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Coalition to oppose Luxury Car Tax surcharge.

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- MEDIA RELEASE - SENATOR THE HON. ERIC ABETZ Deputy Leader of the Opposition in the Senate Shadow Minister for Innovation, Industry, Science and Research

Media enquiries: Brad Stansfield 0419 884 666 1

A0874 28th August 2008

Coalition to oppose Luxury Car Tax surcharge

The Coalition will oppose the Rudd Labor Government's punitive 30 percent increase in the so-called Luxury Car Tax at the second reading in the Senate, Deputy Leader in the Senate, and Economics Committee member, Senator Eric Abetz, said today.

The announcement follows today's release of the Senate Economics Committee report into the proposed Luxury Car Tax surcharge.

"In evidence, the Committee heard that the proposed Luxury Car Tax surcharge was bad policy, for a number of significant reasons:

- it is the politics of envy which will increase inflation; - it will damage the Australian automotive industry; - no other so-called luxury goods are taxed, and motor vehicles and their uses are already very heavily taxed;

- Almost 70 percent of vehicles sold annually which are subjected to the LCT are sold for less than $75,000 - not the cars of "millionaires"; - the Luxury Car Tax threshold has not been appropriately indexed and now captures vehicles which are not "luxury" cars; - the best-selling so-called "luxury" car is the Toyota Landcruiser, highlighting its impact

on rural Australia and those needing "people movers"; - Increasing the Luxury Car Tax would impose a further tax on innovation in both vehicle environmental and safety features. - And the list goes on.

"Contrary to Labor spin, the Luxury Car Tax was not introduced by the Coalition, but by the Hawke Keating Labor Government in 1986.

"It was increased in 1990 again by Labor and opposed by the Coalition at the time.

"Labor's only rationale for this tax increase is to increase revenue and supposedly fight inflation - yet even Labor Senators concede it will be inflationary in their majority report!

"Labor says they want to look after Australia's car industry, yet they are proposing a tax increase which will damage it.

"Labor says they want safer, "greener" cars, yet they are proposing a tax which will discourage innovation in these areas.

"Labor says this is a tax on the "rich", yet the highest selling so-called Luxury Car is the Toyota Landcruiser, which retails for around $70,000, and are driven primarily by those in rural and regional Australia and those with the need for a "people mover."

"Labor's Luxury Car Tax surcharge is a tax grab based on the politics of envy. It is bad policy and it will be opposed by the Coalition."