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Opposition trying to put the brakes on luxury car tax plan: report

Opposition trying to put the brakes on luxury car tax plan: report

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Date Published : Wednesday, August 27, 2008

The coalition has indicated it will oppose the government's plans to increase luxury car tax.

In the federal budget the government announced it would increase the luxury car tax from 25 to 33 per cent from July 1st but the opposition has claimed the move will cost jobs and increase inflation, the Age has reported.

It is understood that the tax increase will affect around 105,000 cars a year but the legislation to make that law has not been passed and in June the senate referred the relevant bills to a committee.

According to documentation for the treasury, the new measure is expected to generate $555 million over four years and will "contribute to the necessary task of ensuring that the budget relieves pressure on inflation".

The tax will apply to both domestically produced and imported vehicles and will result in a car with a current price of $100,000 being subject to an additional $2,541 in tax.

This could further add to the expense of operating such a vehicle after factoring in fuel prices and luxury car insurance.

Kevin Rudd and his government's first budget have received continued criticism from the shadow party, who are also attempting to block its abolition of the tax exemption on condensate.

The scrapping of the tax exemption on the product, a form of light crude oil, is worth around $2.5 billion and treasurer Wayne Swan has accused the opposition of not standing up for working families.

"They are out there defending the alcohol industry, they are out there defending the luxury car industry and they are out there defending windfall profits for oil companies," Mr Swan protested in the Australian.

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