Lux­ury Car Trav­esty

The FBT’s his­tory. Now for the ar­bi­trary and un­fair LCT

Herald Sun - Motoring - - News - CRAIG DUFF craig.duff@carsguide.com.au

THE trav­esty that is the lux­ury car tax has been driven home yet again.

BMW an­nounced an In­no­va­tions pack for its 3 Se­ries range and then had to de­fend what at first glance was an ob­vi­ous pric­ing er­ror.

The 328i Tour­ing (wagon) pack was quoted at $3510. On face value, it should have been far less: as with the 320i wagon, the base price was $2700.

The prob­lem BMW faces is twofold.

First, the $72,900 cost of the car meant adding the pack tipped it be­yond the $75,325 LCT thresh­old— by all of $275 dol­lars.

In the­ory, only that $275 should at­tract the 33 per cent LCT, adding about $70 to the cost. In re­al­ity, BMW knows about 80 per cent of 328i cus­tomers opt for more than just one pack.

Ac­cord­ingly, it erred on the side of cau­tion and added LCT to the full $2700 fig­ure, bring­ing the to­tal price to $3510.

“It’s bet­ter for a cus­tomer to be pleas­antly sur­prised by a lower to­tal price in the event they are the ex­cep­tion and only or­der that one pack, rather than get a shock at ahigher cost than they pre­dicted,” BMW spokesman Toni An­dreevski says.

“We’re bound by the LCT and the prices quoted are in­dica­tive. In this case (the In­no­va­tions pack) they re­flect the fact that about 80 per cent of our cus­tomers choose to op­tion a sun­roof and me­tal­lic paint, at which point the en­tire cost of the In­no­va­tions pack will be sub­ject to LCT.

“The of­fi­cial price list is­sued to deal­ers makes it clear LCT is only payable if the ve­hi­cle price ex­ceeds the lux­ury car tax thresh­old.”

It’s a sim­i­lar story for non-Euro­pean mak­ers.

The LCT ap­plies at a lower thresh­old, $60,316, for cars that use more than 7.0L/100km. That nets ( just) the likes of a top-spec Holden Calais V8.

So it is also with a mid-spec Toy­ota Prado, Nis­san Pa­jero and Nis­san 370Z, all of which make se­ri­ous do­na­tions to the gov­ern­ment cof­fers.

For­many of the Euro brands, the tax dis­crim­i­nates on a safety front. BMW’s In­no­va­tions pack, for ex­am­ple, adds blind spot and lane change warn­ing, for­ward col­li­sion warn­ing and a bird’seye cam­era view, all of which rep­re­sent valid safety ad­di­tions to the car.

In ef­fect, the gov­ern­ment is charg­ing adopters of that safety tech­nol­ogy a 33 per cent pre­mium.

No mat­ter which way you look at it, with the drive to lower the road toll, that’s not good busi­ness.

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