ON THE THRESHOLD OF LUXURY
LUXURY car buyers won a small victory last week as the government lifted the luxury car tax threshold to $63,184 and a number of brands decided to pass on the savings immediately.
The savings were modest — “up to $390” according to the car makers, barely enough to cover the cost of a pair of floor mats. And that’s on a car costing about $400,000.
Unfortunately the government’s generosity didn’t extend to more fuelefficient luxury cars.
Some years after the LCT was introduced in 2000, the Labor government introduced a higher threshold of $75,000 for cars that used less than 7 litres per 100km. If your chosen car limboed under that figure on the official fuel cycle, it could mean savings of more than $3000 on a $75,000 car.
But the incentive to buy green has been shrinking since then.
For the fourth year in a row, there has been no increase in the green car threshold. In fact, since it was introduced it has increased by just $375, or 0.005 per cent.
At the same time, the threshold for gas guzzlers has increased by more than $6000 (or more than 10 per cent).
That’s the kind of logic that brought you a 33 per cent “luxury tax” that applied to cars, but not yachts, diamonds and private jets.