Senate must save Tourism from Luxury Car Tax: ATEC

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May 15, 2008

An additional hidden tax on the Australian tourism industry will badly hurt many small businesses in a sector already reeling from huge Federal Budget tax increases, according to the Australian Tourism Export Council (ATEC).

ATEC Managing Director Matt Hingerty has called upon the Australian Senate to exempt commercial passenger vehicles from the proposed raising of the Luxury Car Tax, no matter how many seats each vehicle possesses.

Mr Hingerty said that the Rudd Government’s decision to raise the Luxury Car Tax from 25 per cent to 33 percent on vehicles costing more than $57,000 would be disastrous for many tourism small businesses which are already facing $670 million in new taxes.

“This luxury car tax will have a massive impact on small tourism businesses, especially those in regional areas,” Mr Hingerty said.

“The Australian tourism industry runs on the Toyota Landcruiser. Four-wheel-drives are the workhorses of tourism, and many of the guys using these vehicles are only small businesses. These small guys are going to get hammered by this tax rise,” Mr Hingerty said.

Mr Hingerty said it was inequitable for tourism businesses to pay a luxury tax on a working vehicle which was earning export income for Australia.

“These vehicles are vital for our industry,” Mr Hingerty said.

“The luxury tours segment is one of the few tourism sectors which is growing right now, especially in regional areas, and we can’t afford to offer rusty old bangers to discerning tourists who want to travel in small, personalised groups.”

“These guys are already struggling, what with the strong Australian dollar, rising business costs in fuel, food and labour, the collapse in EMDGS funding and now the rise in the departure tax, the visa processing fees, and the luxury car tax” Mr Hingerty said.

Mr Hingerty said the tourism hire-car industry would also be hit heavily by the tax rise. Despite this sector operating luxury vehicles from manufacturers such as BMW, Mercedes-Benz, SAAB and Holden, Mr Hingerty said using these cars was an essential element in servicing the business- and self-drive tourism sectors.

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Contact: Nick Buchan              
National Media and Communications Manager
Ph: 02 8262 5501
Email: nick.buchan@atec.net.au