The Australian Automotive Association (AAA) recently stepped up its campaign against Australia’s Luxury Car Tax, arguing it means Australians are paying more than their Japanese or UK counterparts for the same cars.
The AAA, which represents Australia’s motoring clubs, has blamed the 33% tax for higher car pricing payable on “every vehicle worth over $61,884”.
There is no denying that the luxury car tax must be removed or reformed as Australia cannot pursue a free trade agreement with Japan or Europe with such a tax in place. In effect, the LCT is a non-tariff to free trade – originally called a “thinly veiled protectionist measure” for the local car industry. But the AAA’s current analysis is misleading, and in some cases incorrect.
Removal of the LCT would cause a reduction in federal government revenue of around A$500 million per year, but the AAA is lobbying the government to remove it.
Part of AAA research is provided below. It compares car prices paid in Australia to the UK for select vehicles with rate of taxes payable further analysed.
The AAA shows the BMW 3 series 328i costs A$69,400 (including GST) in Australia, but is $14,013 cheaper in the UK (price of A$55,386.82). A similar report prepared by the FCAI shows the above UK car prices (for September and October 2014) as being higher than the prices provided by AAA for no apparent reason.
Fuel efficiency matters
The AAA asserts that the additional A$14,013 paid in Australia for the BMW is because the LCT of “33% will be added to the price tag of every vehicle worth over $61,884 sold this year”. However this is not the case for the BMW 3 series 328i or the Mercedes Benz A45 AMG, shown in the above table, because both vehicles qualify as fuel-efficient vehicles and are exempt from LCT. Vehicles over the above threshold, such as the Mercedes ML350 Blue Tec Diesel, will pay total taxes of A$18,324, which includes GST of A$8,391 and LCT of A$9,933, compared to the UK VAT of A$16,735.
The AAA fails to explain why Australian prices are competitive to UK car prices in the A$25,000+ price range, such as the Ford Focus shown in the table. This is because of Australia’s lower GST rate of 10% (A$2,027), compared to the UK’s higher VAT rate of 20% (A$5,007). Lower GST revenue is collected in Australia for lower priced vehicles. Higher priced vehicles attract LCT if the vehicle is not fuel efficient and if the price of the new vehicle is above the fuel efficient car limit of A$75,375. This provides some encouragement for the acquisition of fuel-efficient vehicles.
LCT is not totally responsible for the differences in the car prices between countries, where the differences in the new vehicles “List Price” (excluding all taxes) between the countries is attributable to prices set by vehicle manufacturers and not as a result of taxes. Moreover, the impact of the LCT on vehicle prices is marginal, given the higher UK VAT rates.
If the AAA or FCAI had extended their research to include the US and most member states in the EU, they would have found new car prices in Australia are considerably lower due to additional taxes such as the US Gas Guzzler Tax, or the reformed vehicle purchase taxes. These are differentiated on the basis of CO2 emissions, and have been introduced for the purpose of influencing car purchasing trends to fuel efficient vehicles. They support the international Global Fuel Economy Initiative that requires countries to improve fuel efficiency by at least 50% by 2050 relative to 2005 levels.
Tax reform to the LCT should also include GST and state government Stamp Duty. The AAA, FCAI and the Productivity Commission have not considered the international trends of reforming such taxes and charges on the basis of CO2 emissions, and increasing the country’s fleet of fuel-efficient vehicles.
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Ah, the Skyline. Against a skyline. Nice.
The Skyline, in our opinion, is the car that made Nissan.
Never mind that it was actually invented by Prince – no, not the ‘Purple Rain’ one, the Japanese car manufacturer, which merged with Nissan in the 1960s. Nissan kept the excellent ‘Skyline’ name – and the somewhat suspect ‘Gloria’, but we digress.
The Skyline nameplate dates all the way back to the late 1950s, but it’s the 1989 R32 Skyline GTR that really put Nissan on the map. Even though there had been quite a few highlights in the range over the years – the original 1969 GTR, for instance, and the R31 GTS-R – the R32 left an indelible mark, both on the road and in motorsport.
Families have moved on from the family sedan.
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As SUVs have grown more comfortable and more efficient over the years, families and car shoppers in general have demonstrated an increasing preference for the elevated driving position, superior cargo versatility and higher profile of SUVs. Whether it’s the sliding doors and cavernous interior of a minivan or the high-riding nature and available all-wheel drive of an SUV, each of these vehicles is simply more functional as a family car than a traditional sedan.
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The all-new 2018 Range Rover Velar has been revealed, filling the space between the smaller Evoque and larger Sport in the British marque’s line-up, and will land in Australia later this year, in the Summer. Pitched as the “avant garde Range Rover“, the Velar is claimed to offer new levels of refinement and technology for the brand, and is set to go on sale in Europe later this year.
When the Velar goes on sale in Australia, pricing will range from $70,300 to $135,400 before on-road costs. A special ‘First Edition’ variant will also be offered at launch, priced from $167,600 – again before on-road costs are applied.
Although full Australian details are still to be revealed, headline features in the Velar include the debut of the new Touch Pro Duo infotainment system with two high-definition 10-inch touchscreens, along with Matrix Laser-LED headlights, Jaguar and Aston Martin-esque flush deployable door handles, and a minimalistic design approach.
Do you know what it’s like to be the most popular person in the room? What about the most attractive? No, I don’t either, I was just wondering if anyone had felt the way Mazda must feel in Australia at the moment. Everything the Japanese brand has touched of late has turned to gold and one blinding example of that is the 2016 Mazda 3 Maxx.
Positioned as the second most affordable 3 in the range, the Maxx actually pushes our pick of the 3 range – the SP25, based on our launch review – all the way when you sit down and weigh up driving engagement, pricing and specification. In fact, if you’re shopping on a tight budget, and you don’t absolutely need the 2.5-litre engine, the Maxx is without doubt the model we’d recommend. Yes, it is that good.
Standard safety kit was part of the recent revision to standard specification across the range, and as such, blind spot monitoring, rear cross traffic alert and smart city brake support are included. The amount of standard kit you get at this price point is genuinely impressive. Luxury Euro vehicles with stratospheric price points don’t get some of the gear that the 3 Maxx gets standard.
The Maxx is powered by a 2.0-litre, four cylinder petrol engine, which generates 114kW at 6000rpm and 200Nm at 4000rpm and, as tested, features the aforementioned six-speed automatic gearbox. The engine is pretty high tech too, with stop/start and direct injection, all part of Mazda’s SkyActiv-G technology under the bonnet. All petrol Mazda 3 models will drink regular unleaded, although we tend to run 95RON as a matter of course. The ADR fuel consumption claim is 5.8L/100km with the automatic transmission.
External styling is a Mazda 3 strong point and the Maxx is an attractive small hatch. It is part of the reason the 3 is so popular in Australia – we definitely buy vehicles on style in this country. Mazda’s Kodo design language delivers a fluidity in the proportions from front to rear. The signature swooping design cues might eat into second row headroom a little compared to the outgoing model, but there is still room for two adults in the second row. One exterior highlight is the stylish 16-inch alloy wheels, with sensible sidewall tires that add to the driving comfort around town – more on that in a minute.
Controlling the system is beautifully simple via the rotary dial that is mounted within easy reach and is incredibly easy to understand even for first timers. Cleverly, the touchscreen function is deactivated when the Maxx is in motion. The satellite navigation software is quick to load and accurate when directing you to a destination. The audio system works well too, with Bluetooth phone connectivity always crystal clear and never dropping out. You also get DAB+ radio and internet radio integration. The screen displays all you need to work through in an easy to understand fashion.
The driving position, visibility and comfort are all perfect. There’s plenty of seat adjustment for tall occupants even in the passenger seat, but keep in mind, tall adults up front will eat into leg space for passengers in the second row. If the Maxx is a family runaround though, there’s more than enough space to truck the brood around.
The second row seats are actually nicely sculpted and comfortable for adults even on longer trips. You tend to sit down into them rather than up on top of them, and the material is both hardy but comfortable. Your passengers will appreciate the second row accommodation, that’s for sure.
The small console bin and small glove box don’t offer up much space for workers using the Mazda 3 as a mobile office, but there’s safe storage for a wallet and phone ahead of the shifter and the cup holders/bottle holders are well positioned too. The hatch section is low enough to make loading and unloading gear easy and again, there’s enough usable space to haul the kind of gear that most Mazda 3 owners will need to carry.
On the move, the 2.0-litre engine presents – at city speeds at least – as a quiet and refined power plant. It’s only when you lean on the throttle a little heavily, or coax the Maxx willingly up to highway speeds (or roll on overtake from say 60km/h), that it starts to feel like you’d be better off with the 2.5-litre engine. Under all other conditions, the 2.0-litre is more than up to the task. The real world fuel usage reflects the fact that the engine has to work harder than its bigger sibling, returning an indicated 10.3L/100km.
The gearbox is crisp regardless of how hard you’re working the engine, and paired with sharp steering, it makes the Mazda 3 Maxx feel like a nimble little hatch. You find yourself darting around town, like you’re piloting a go-kart, such is the all-round balance and feedback. We loved the way the Maxx rode over poor surfaces, thanks in part to sensible 16-inch wheels and tall tires, but also to an inherently capable suspension tune. While it can turn in sharply and stay balanced through corners, it can also ride comfortably when the going gets nasty – it’s a solid compromise.
As we stated at the outset, the Mazda 3 Maxx really does give the SP25 a red hot run for its money as the overall pick of the 3 range. It’s only piped by the more effective engine and extra inclusions for those buyers not on a tight budget. In Maxx specification though, we reckon the Mazda 3 earns a solid eight overall, such is its all-round ability. It’s not hard to work out why the Mazda 3 is so damn popular with Australian buyers.