[AshSimmonds]

http://www.smh.com.au/news/national/one-vote-costs-555m/2008/09/04/1220121382925.html 

 

One man blows $555m hole in budget over luxury car tax

The Senate this morning blew a $555 million hole in the federal budget when it defeated an increase in the luxury car tax.

Senator Steve Fielding voted with the Opposition to defeat the bill at the second reading stage. He made no attempt to amend it.

The bill was defeated by 34 votes to 33.

It followed last night's embarrassment when Liberal Senator Sue Boyce failed to show for the planned vote to kill the tax measure.

The Opposition moved first thing this morning to have the vote recommitted.

The Government wanted to increase the luxury car tax from 25 per cent to 33 per cent on vehicles worth more than $57,180.

The defeat of the bill will cost the Government an estimated $555 million in lost revenue over four years.

Tax already collected by car dealers since July 1 will have to be refunded to buyers.

Senator Fielding had wanted to exempt farmers and those in the tourism industry who use cars worth more than the tax threshold of $57,180 as tools of trade.

But it was explained to him by Treasurer Wayne Swan that this was non-constitutional and would be a compliance nightmare.

Farmers and tourist operators could claim their vehicle costs as a tax deduction anyway.

The two men are understood to have had a heated meeting yesterday morning.

Senator Fielding has now sided with the Opposition to defeat three budget bills in the past week and he has the Government worried.

"I just tend to think that maybe the Rudd Government thinks they can get away with slugging farmers and tourism operators," Senator Fielding said of the luxury car tax.

Mr Swan said before today's vote that Senator Fielding's requests had been unreasonable.

"His request simply couldn't be implemented. It would have been a compliance nightmare," he said.

"But it's not too late for the Liberal Party to actually demonstrate some economic responsibility in the Senate today.

"Essentially, what the Liberal Party is doing is supporting a tax cut for owners of luxury cars."

The Australian Greens and independent Nick Xenophon sided with Labor to allow the bill to proceed to its final stage.

Greens leader Bob Brown criticised Senator Fielding for opposing the bill, saying opposition would prevent any further debate on the issue.

"The Government ... simply doesn't know what Senator Fielding's doing, nor does anyone else in the Senate,'' he told ABC Radio.

"I don't even know if Senator Fielding knows what he's doing."

Car industry happy

The car industry has welcomed the Senate decision.

 "We very much welcome the vote by the Senate today to reject the tax increase in the luxury car tax," Federal Chamber of Automotive Industries chief executive Andrew McKellar told reporters.

"This was always bad policy and the Senate was right to reject it."

The tax would have hit farmers and tourism operators, Mr McKellar said.

"For that reason it is a correct move by the Senate."

http://news.smh.com.au/national/car-tax-increase-defeated-in-senate-20080904-4918.html

Car tax increase defeated in Senate
September 4, 2008 - 11:47AM

The federal government's luxury car tax increase has been defeated in the Senate.

Family First senator Steve Fielding sided with the coalition to vote down the legislation at the second reading, 34 votes to 33.

The bill was set to be defeated Wednesday night, but coalition Senator Sue Boyce failed to show up to cast her vote.

The opposition moved first thing Thursday morning to have the vote recommitted.

The government wanted to increase the luxury car tax from 25 per cent to 33 per cent on vehicles worth more than $57,180. The defeat of the bill will cost the government an estimated $555 million in lost revenue.

Senator Fielding had wanted to exempt farmers and those in the tourism industry who use cars, worth more than the tax threshold of $57,180, as tools of trade.

"I just tend to think that maybe the Rudd government thinks they can get away with slugging farmers and tourism operators," he told ABC Radio on Thursday.

"There's no way we can vote for this if they're not looked after."

Treasurer Wayne Swan said on Thursday Senator Fielding's requests had been unreasonable.

"His request simply couldn't be implemented, it would have been a compliance nightmare," Mr Swan told ABC Radio before the vote.

"But it's not too late for the Liberal Party to actually demonstrate some economic responsibility in the Senate on Thursday.

"Essentially, what the Liberal Party is doing is supporting a tax cut for owners of luxury cars."

The Australian Greens and independent Nick Xenophon sided with Labor to allow the bill to proceed to its final stage.

Greens leader Bob Brown criticised Senator Fielding for opposing the bill, saying opposition would prevent any further debate on the issue.

"The government ... simply doesn't know what Senator Fielding's doing, nor does anyone else in the Senate," he told ABC Radio.

"I don't even know if Senator Fielding knows what he's doing."

Earlier, Opposition Leader Brendan Nelson sought to downplay Wednesday night's embarrassing vote, saying everyone made mistakes from time to time.

"Most senators and members (of the lower house) over the period of their parliamentary life unavoidably will miss a division, but the will of the Senate was obvious and I understand the matter will be dealt with again today," he told ABC Radio.

"All I can say is she will be there today."

Meanwhile, the automotive industry has welcomed the Senate decision to knock down a government plan to raise the tax on luxury cars.

"We very much welcome the vote by the Senate today to reject the tax increase in the luxury car tax," Federal Chamber of Automotive Industries chief executive Andrew McKellar told reporters.

"This was always bad policy and the Senate was right to reject it."

The tax would have hit farmers and tourism operators, Mr McKellar said.

"For that reason it is a correct move by the Senate."

[Aircon]

wow...i'm amazed.

[GTBqv.au]

Tax already collected by car dealers since July 1 will have to be refunded to buyers.

Yahoo!!  What can I spend that on? 

[jim501]

Love how they say that he has given a tax cut to drivers of luxury cars, no he didn't he stop a tax increase, didn't save anyone anything

[mondi]

Love how they say that he has given a tax cut to drivers of luxury cars, no he didn't he stop a tax increase, didn't save anyone anything

Yeah, but it sounds good to those who don't think like this.   

[Aircon]

Yeah, but it sounds good to those who don't think like this.   

actually, with the increase in car prices, they've been making more and more and more anyway...and it now applies to cars that it was never intended for.

[AshSimmonds]

actually, with the increase in car prices, they've been making more and more and more anyway...and it now applies to cars that it was never intended for.

When is the last time the "luxury" level was changed?  I've only really closely followed the markets for 5 or 6 years, and as far as I recall it's always been about $57k. 

Back then a base commode-door was $31k new, now it's over $40k.  A Ferrari 360 was $370k, now an F430 is $435k.  A BMW 325i came in at $68k which is enough to tip the scales a little, now a 325i is $75-80k.  I'm not comparing the models, just the cheapest entry price into the common models of the marques.

[mondi]

actually, with the increase in car prices, they've been making more and more and more anyway...and it now applies to cars that it was never intended for.

When is the last time the "luxury" level was changed? 

That is the whole point. The $57k level is a joke.

As Ash said, most of your mid range Mommy Mobiles and Crapydoors are in sight of this figure now and some over this.

I know from importing cars in the past, the $57k did not mean that if the car was purchased at this price, cos' GST and Duty's are counted in this figure.
That is if the vehicle was purchased for $48k Aussie then it would be hit with Luxury Car tax because of the other Taxes.
$48k purchase price, $4800 GST, $6336 Duty and Hey it's now over $57k so the Luxury car tax kicks in as well.


    

[AshSimmonds]

WTF

http://www.news.com.au/adelaidenow/story/0,22606,24297038-5006301,00.html

No cash back for luxury car drivers

RECENT buyers of prestige cars will have to wait for an expected tax refund after the Rudd Government's controversial luxury car tax was voted down in the Senate.

People who have bought expensive cars since July 1 have been charged at the new rate of 33 per cent on cars priced at more than $57,180 in anticipation of the luxury car tax becoming law.

However, the Opposition and Family First senator Steve Fielding yesterday combined to defeat the Bill, meaning the extra money paid by buyers should be refunded.

This would amount to $8000 on a car with a sale price of $100,000.

But the Australian Tax Office late yesterday re-issued advice to car dealers to keep charging the tax after the Rudd Government said it would make another attempt to get it through the Senate.

"Tax Commissioner Michael D'Ascenzo today received advice from the Government that it intends to reintroduce the proposed luxury car tax bill," the advisory read.

"As a result the Tax Office is re-issuing previous advice, reiterating how the proposed luxury car tax will apply to vehicles delivered after 1 July, 2008."

That is bad news for sellers of high-end vehicles, who had hoped approval to lower prices would follow immediately if the bill was defeated.

It was the first major defeat for the Rudd Government in the new-look Senate, and Treasurer Wayne Swan said it would cost the Government $555 million in lost revenue.

Mr Swan said the Opposition had voted for lower taxes for Rolls-Royce drivers, rather than lower interest rates for working families doing it tough.

"It just shows how badly the Liberals have lost their way on the economy that they are willing to vandalise the responsible budget surplus we built to fight inflation and provide a buffer against global economic turmoil," Mr Swan said.

The Government needs the support of all five Greens and independent Nick Xenophon as well as Senator Fielding to get its legislation through the Senate.

The Government plans to re-commit the bill within the fortnight, but there are serious doubts it will negotiate a solution with Senator Fielding.

He said he voted against the tax after the Government made it clear it would not accommodate his call for farmers and tourism operators to be made exempt.

But he said he was willing to return to the negotiating table ahead of the legislation's return.

The $555 million hole in Labor's surplus now threatens to become a multi-billion dollar hole when three other measures: the alcopops tax hike; changes to the Medicare Levy Surcharge; and a new condensate tax, are also defeated as appears likely.

[AshSimmonds]

Wasn't the original point of LCT aimed at protecting local vehicle industries?  If that's so, then why not have a ceiling threshhold of say $80k?  I mean how many locally produced cars are beyond this point - why gouge consumers who aren't the least bit interested in the sub-par products available domestically?

Otherwise - I don't see why they don't just put a "luxury tax" on *anything* which is more than you need as a regular citizen.  You don't need a 90 inch plasma, and why buy a $30 bottle of wine when you can get a 5lt box of it for $8 bucks?  Surely a $45 steak is un-necessary when you can have a meat pie for $4.

So - bring in a lux tax on *everything* which is a luxury or fuck it off all together cos it's so bloody hypocritical.

Sorry - just felt in the mood for a rant.