Abolishing luxury car tax for EV/Hybrid vehicles

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Luxury car tax was created by Federal Government in July 2001 (source: Wikipedia) in an attempt to save local car manufacturing and jobs. The idea being that a locally produced vehicle would be cheaper to purchase than an import with tax implications. This effort was unsuccessful, however to this day the luxury car tax remains on vehicles that fit the criteria based on price. Although the threshold has increased by $526 AUD in 10 years (source: ATO), it has failed to rationale hybrid and electric technologies, which at present are expensive to manufacture and are not currently produced in Australia for the general population. 

We believe that the luxury car tax (LCT) should be abolished for EV/Hybrid vehicles as a direct incentive to purchase more environmentally friendly vehicles. United States currently still offer a federal tax credit as an insensitive to purchase EV/hybrid vehicles. 

Tesla have just released the Model 3 configurations, and even these stripped out basic versions can have up to $8.5k AUD on road costs (source: Tesla). These aren’t premium import vehicles, they are just expensive to produce. Abolishing the LCT could strongly Incentivise those shopping for a new vehicle, to strongly consider the shift to EV and the future.

Short of any exclusive EV/Hybrid Incentives,  abolishing the LCT would be a great start to shift to a cleaner future.


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