The Australian government has announced changes to the luxury car tax that will add thousands of dollars to the cost of hybrid vehicles priced over $76,950.The new tax will apply to vehicles that consume more than 3.5 litres of fuel per 100 kilometres. This means that many hybrid vehicles, which typically consume around 5 litres of fuel per 100 kilometres, will be subject to the tax.
The federal Chamber of Automotive Industries (FCAI) has criticized the changes, saying that they will slug motorists who want to buy more fuel-efficient vehicles.”What the government is saying in MYEFO, as part of that step to zero emissions, is that we need other technologies to cut emissions,” FCAI chief executive Tony Weber said.
“So the government puts on a tax which means $155 million more is spent by consumers in just two years on cars where they’ve made a conscious decision to go low emissions.”However, the Electric Vehicle Council (EVC) has welcomed the changes, saying that they will encourage uptake of zero-emissions vehicles.”Vehicle technology has advanced rapidly in the 10 years since this policy was last changed,” EVC chief executive Behyad Jafari said.
“What this change demonstrates is that smart governments can adjust policy settings to cover for near-term revenue impacts without reaching prematurely for blunt instruments like an EV tax.”Smart reform means looking at the whole board and taking steps to encourage, rather than hinder, EV take-up.”
The changes to the luxury car tax are part of the government’s commitment to reduce greenhouse gas emissions by 43 per cent by 2030, and to reach net zero by 2050.
The MYEFO said that the changes will encourage greater take-up of fuel-efficient vehicles, consistent with the Australian government’s National Electric Vehicle Strategy.