JV911 Posted 31March, 2015 Report Share Posted 31March, 2015 http://www.afr.com/it-pro/think-luxury-car-prices-are-ridiculous-heres-why-20150331-1mbj80 Porsche dealer Sean Lygo says its "totally ridiculous" that Australians pay so much for luxury cars, while the body which represents 7.5 million motorists says the 33 per cent luxury car tax should be scrapped now that the car manufacturing industry is about to close. Mr Lygo, who hails from the United Kingdom, is the general manager of the Porsche centre in Willoughby on Sydney's lower north shore and says the tax penalises those who may have worked hard to achieve success and want to reward themselves. "It's unfair. It's totally unfair to charge people 33 per cent for buying a car because they've done well," Mr Lygo says. It's not just the upper end of the market which is angry at the tax, which the federal government's tax discussion paper, released Monday, says is complex and full of anomalies. While the Rudd government increased the tax to 33 per cent in 2008, former Treasury secretary Ken Henry called the tax "absurd", a means of penalising "people on average means with a preference for relatively expensive cars". Joe Hockey's tax paper points out that a seven-seater family vehicle and a small sports car may end up classifed as "luxury cars" under the tax, which raised $476 million in 2013-14, or just 0.1 per cent of total tax revenue. The paper says changes have made it much more complicated, and it is a barrier to trade because 94 per cent of vehicles subject to the tax are imported according to industry estimates in 2014. The luxury car tax is applied at a rate of 33 per cent to the GST-exclusive value of the car including accessories, when it exceeds a threshold, now $61,884 for regular cars and $75,375 for fuel efficient vehicles. A new vehicle costing close to $70,000 in Australia would be around $14,000 cheaper in the UK. Mr Lygo says it is ridiculous, but sales are still brisk, with market demand for new models in the Porsche line-up strong. "We are so busy," Mr Lygo says. Australian Automobile Association acting chief executive James Goodwin says the tax should be dumped given Ford, Toyota and Holden are all preparing to shut their car making operations by 2017 at the latest. "If we don't have a local manufacturing industry then why do we need a luxury car tax," he says. The AAA is the over-arching body representing 7.5 million motorists who are part of the various State motoring organisations including the NRMA, RACV, RACQ and RAA. Mr Goodwin says many of the higher-end luxury car brands from offshore have been pioneers in bringing in new safety features to the Australian market and the tax is a punitive one. "They're actually punishing the early adopters," he says. Kayne Theodossi, general manager of Nick Theodossi Prestige Cars in the inner Melbourne suburb of North Melbourne, says he doesn't agree with the tax but thinks it will be difficult for the government to remove it completely because it will likely be replaced with something else to make up for lost revenue. The dealership sells a range of brands including Lamborghini, Maserati, Aston Martin and Ferrari and Mr Theodossi says business is strong, with many customers business people who have built up their operations over years of hard work, rather than those spending windfalls from a rising sharemarket or soaring property prices. "The top end is strong. It's more people who've got businesses," he says. Link to comment Share on other sites More sharing options...
JV911 Posted 31March, 2015 Author Report Share Posted 31March, 2015 Ditching it altogether aside, I reckon the $61k threshold is a joke - a specced up Commodore Golf or would excede that. I don't know what the right number is but it should be north of double that. Link to comment Share on other sites More sharing options...
tazzieman Posted 31March, 2015 Report Share Posted 31March, 2015 "The top end is strong. It's more people who've got businesses," he says. Yeah, good luck if your a wage earner or salaried! Even if you work hard. Link to comment Share on other sites More sharing options...
turboT Posted 31March, 2015 Report Share Posted 31March, 2015 The reality is that it is politically easy for all parties to agree on taxing those with more money. Link to comment Share on other sites More sharing options...
Coastr Posted 1April, 2015 Report Share Posted 1April, 2015 Yeah the tax is stupid, but I have zero hopes of it being removed. The article talks about the tax income lost, but forgets to factor in increased gst take from increased car sales around the threshold. Without a step-jump in prices around the threshold price, more people would buy new cars and the government would get more gst. So it wouldn't be a total loss. This was pinted out at the time that Keating brought in the tax, when cars paid sales tax (I think it was higher than the gst). But it's done for ideological reasons rather than actually raising revenue efficiently.Kayne Theodossi, general manager of Nick Theodossi Prestige Cars in the inner Melbourne suburb of North Melbourne, says he doesn't agree with the tax but thinks it will be difficult for the government to remove it completely because it will likely be replaced with something else to make up for lost revenue. Or we could sell the ABC, save ourselves a billion dollars a year, and build a new hospital or two with the leftovers - every year. Or find some department full of penpushers and seat warmers and give them the dcm. We have a federal department of health that has no doctors, and a federal dept of education that has no teachers. Nobody has ever explained to me why we need those particular edifices. Sorry if you're in Canberra and rely on said make work schemes. It's not personal. Link to comment Share on other sites More sharing options...
tazzieman Posted 1April, 2015 Report Share Posted 1April, 2015 The best thing is to allow the business owners to buy & get the "work vehicle" deductions , incur the marked depreciation and pick up the crumbs from the king's table a few years down the track. That makes the price-value equation more realistic. Hopefully the vehicle has been properly maintained and not too badly flogged "after hours". Unless it's an Italian car, in which case a damn good flogging is probably better than buzzing around the city. Link to comment Share on other sites More sharing options...
Coastr Posted 1April, 2015 Report Share Posted 1April, 2015 Tazzieman your just making more complexity. I'm suspicious you're a paid shill for 'big accounting' I'm a firm believer in flat, broad taxes and little wiggle room. 10% GST, 25% corporate and 25% income. You can add some 'sin taxes' on top of that at the point of wholesale if you must. Whatever government spending can't be paid for with that take should be dumped permanently. We live in an era where government contribution to GDP creeps up every year - we know that 100% government economy is bad! and 50% isn't good either, so why keep going in that direction. Immediate dismissal for any politician who votes for a budget that exceeds 25% of GDP. Oh, and one welfare payment per person regardless of reason for needing it. Create an "I'm a lazy bastard" category if need be but deliver the entire thing over the internet so it costs little to dole out the payments. It's all the little rules and regulations and carve outs and exceptions that make the entire thing so stupid, yet employs armies of people throwing rule books at each other. Link to comment Share on other sites More sharing options...
ByronBayChris Posted 1April, 2015 Report Share Posted 1April, 2015 I know of some very wealthy people who claim their five free chiropractic treatments each year through Medicare, as they don't want to miss out and they feel they deserve it. Neither good nor bad, just sayin. Link to comment Share on other sites More sharing options...
Coastr Posted 1April, 2015 Report Share Posted 1April, 2015 I know of some very wealthy people who claim their five free chiropractic treatments each year through Medicare, as they don't want to miss out and they feel they deserve it. Neither good nor bad, just sayin. This is precisely my point. So many little quirks. People who pay tons of a tax feel as though they deserve it, so hugely find a way. So then more exception and rules and people paid to check. Just cut it all completely and replace with a basic payment if you are on welfare. Otherwise pay it yourself or find an insurer who will include it. People on higher incomes would have more money so wouldn't care. People who have no money still get looked after. Getting back to luxury car tax it's ridiculous that 'luxury' cars costing 60k get taxes, while boats and planes are not. Link to comment Share on other sites More sharing options...
tazzieman Posted 1April, 2015 Report Share Posted 1April, 2015 I disagree to the point where I avoid buying new goods where possible. The Sheriff is everywhere, and is now double dipping into my super. Meanwhile , the cigar chomping Canberra fat cants... Link to comment Share on other sites More sharing options...
Peter M Posted 1April, 2015 Report Share Posted 1April, 2015 Tazzieman..... I'm suspicious you're a paid shill for 'big accounting' Tazzie, Surely that has to be a first time you've been called that! All this money talk over the last few weeks is making me depressed. Has the "F" in "PFA" changed from Forum to Finance? I'm off to make another post on engine oils to cheer myself up..... Link to comment Share on other sites More sharing options...
turboT Posted 1April, 2015 Report Share Posted 1April, 2015 Tazzie, Surely that has to be a first time you've been called that! All this money talk over the last few weeks is making me depressed. Has the "F" in "PFA" changed from Forum to Finance? I'm off to make another post on engine oils to cheer myself up..... What the post where you gave us all of the costs of the oils? Money makes the world go round Pete Link to comment Share on other sites More sharing options...
Coastr Posted 1April, 2015 Report Share Posted 1April, 2015 Hey, to be fair, the topic is about tax! Link to comment Share on other sites More sharing options...
tazzieman Posted 1April, 2015 Report Share Posted 1April, 2015 Tax. I've paid my share in 30 years ; no concessions thusfar , and unlikely to get any concessions in the future, ever. And no , I've never been called a shill. As well , I avoid money talk like the plague. Root of all evil & doesn't buy happiness etc. Even Harold left us... Link to comment Share on other sites More sharing options...
ByronBayChris Posted 1April, 2015 Report Share Posted 1April, 2015 Even Harold left us... I do miss his first world problems put so eloquently on the Web for all to see Link to comment Share on other sites More sharing options...
tazzieman Posted 1April, 2015 Report Share Posted 1April, 2015 How many 1000s of litres of diesel to fill up his pleasureship? Link to comment Share on other sites More sharing options...
ANF Posted 1April, 2015 Report Share Posted 1April, 2015 Taking out the luxury tax or even the GST does not make our prices comparable to overseas markets. We are still getting fleeced here in aus! Link to comment Share on other sites More sharing options...
GC9911 Posted 2April, 2015 Report Share Posted 2April, 2015 Tax. I've paid my share in 30 years ; no concessions thusfar , and unlikely to get any concessions in the future, ever. And no , I've never been called a shill. As well , I avoid money talk like the plague. Root of all evil & doesn't buy happiness etc. Even Harold left us... Has Harold left us?????? Link to comment Share on other sites More sharing options...
tazzieman Posted 2April, 2015 Report Share Posted 2April, 2015 Has Harold left us?????? Well , unless you are actually Harold ... Link to comment Share on other sites More sharing options...
GC9911 Posted 2April, 2015 Report Share Posted 2April, 2015 Well , unless you are actually Harold ... Not last time I looked Tazzie. Geez, I didn't notice his passing, something you said? Link to comment Share on other sites More sharing options...
tazzieman Posted 2April, 2015 Report Share Posted 2April, 2015 Not last time I looked Tazzie. Geez, I didn't notice his passing, something you said? Me? How dare you! It appeared he felt his PFA account was compromised. Lots of pensioners suffer this ill founded paranoia. The world needs more yoga and scented candles. Link to comment Share on other sites More sharing options...
tazzieman Posted 2April, 2015 Report Share Posted 2April, 2015 Back on topic http://www.news.com.au/technology/innovation/harper-review-calls-for-removal-of-parallel-import-restrictions-on-motor-vehicles/story-fnjwucvh-1227289613575 A Porsche 911 Carrera S sells for roughly $180,000 in Australia while costing $A105,000 in the US. Link to comment Share on other sites More sharing options...
D-banger Posted 2April, 2015 Report Share Posted 2April, 2015 Like many taxes with thresholds, bracket creep has made the thresh hold look ridiculous. Also a straight out removal would make many recent car buyers very unhappy. Link to comment Share on other sites More sharing options...
tazzieman Posted 2April, 2015 Report Share Posted 2April, 2015 Like many taxes with thresholds, bracket creep has made the thresh hold look ridiculous. Also a straight out removal would make many recent car buyers very unhappy. So dealers keep prices up - so disenchanted people won't switch brands. I think demand outstrips supply at present , so why change a "winning formula"? Link to comment Share on other sites More sharing options...
firstone Posted 2April, 2015 Report Share Posted 2April, 2015 The demand for new cars is still high enough to warrant the prices it seems. Is it too simplistic to think that if that were to change, wouldn't the dealers have to cut prices and pressure government to rethink their position? 33% of nothing is nothing..... Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.