At the second attempt, the Federal Government had its controversial Luxury Car Tax (LCT) bill rubber stamped by the Senate late last night. For vehicles costing more than $57,180 the LCT will now increase from 25% to 33%. After failing at the first attempt to have the bill passed at the start of the month, and without an outright majority in the upper house, the Government agreed to some compromises as set out by the Greens and Family First, exempting some fuel efficient cars and offering a refund system for eligible farmers and tourist operators. A last gasp attempt by the opposition to have the 33% threshold raised to $90,000 did not get through. Under the coalition plan cars between $57,180-90,000 would remain taxed at the current 25%.
Under the Greens amendments cars costing less than $75,000 with a fuel consumption figure under 7l/100km will be exempt from the new LCT. Greens Senator Christine Milne says she is pleased the Government is willing to compromise, “This is the first time I have known of where a Government has actually been prepared to look at a tax as anything other than revenue raising and actually drive a behavioural outcome, particularly in relation to the environment.”
Chris Evans, leader of the Government in the Senate, was circumspect when commenting on the changes, “We didn’t get everything we wanted but we got the majority of the bill intact. I think the point to make here is this was the first bill which people had to come to terms with in this way and we were all learning, and I think it will be easier to make progress in the future.”