Luxury ute tax loophole costs Australians $250m a year, researchers say

[Franco Cozzo]

Uh oh, they're onto the loophole:

Luxury ute tax loophole costs Australians $250m a year, researchers say

The Australia Institute says tax exemption on ‘commercial vehicles’ with no testing requirement is incentivising people to buy utes instead of EVs

A loophole in Australia’s tax law is in effect subsidising the price of luxury utes such as Ram and Chevrolet SUVs, costing taxpayers more than $250m a year in forgone revenue, an analysis has found.

However, the LCT does not apply if a car is “a commercial vehicle designed mainly for carrying goods and not passengers”. This is defined as a car that can carry twice the weight in payload than it can carry in people – a requirement which almost every dual-cab ute on the market in 2024 can meet, according to the Australia Institute.

The Australia Institute concluded the LCT exemption loophole for utes should be ended because it acts as an incentive to buy vehicles that are worse for the environment. They also raised its cost to national tax revenues; the LCT was estimated to raise $1.3b in 2023-24, slightly more than the commonwealth spends each year on the ABC.

The Institute analysed tax and sales data and found that most of the cost of the exemption was related to the largest, most expensive utes, including those from US brands Ram and Chevrolet.

https://www.theguardian.com/australi...-evs-taxpayers

They're hitting all the 'key words' - loophole, revenue, incentive, environment

[kevino]

Got to be balanced against the car 'assembly' rebuild plants that convert these to rhd in Vic.
Be quite a lot of employees work there.

[Franco Cozzo]

Originally Posted by kevino

Got to be balanced against the car 'assembly' rebuild plants that convert these to rhd in Vic.
Be quite a lot of employees work there.

Lot of people worked in the automotive manufacturing industry in Adelaide, Melbourne and Brisbane but they're long gone too so don't be too sure the government won't turn around and make changes

[naddis01]

Originally Posted by Franco Cozzo

https://www.theguardian.com/australi...-evs-taxpayers

Here comes the next money grab.

How about instead more BS taxs, they abolish the stupid luxury car tax in the first place.

[Franco Cozzo]

Originally Posted by naddis01

Here comes the next money grab.

How about instead more BS taxs, they abolish the stupid luxury car tax in the first place.

I'll remove LCT, in exchange for a 15c/L increase on fuel excise, applicable only to diesel, but exemption for vehicles over 4495kg GVM.

Watch how quick Ecoboost Ranger would be introduced into the market

[kevino]

That’s inflation causing

What about the thousands of commercial vehicles under 4495 kg gvm doing last mile delivery?

Hmmm?

[Franco Cozzo]

Originally Posted by kevino

That’s inflation causing

What about the thousands of commercial vehicles under 4495 kg gvm doing last mile delivery?

Hmmm?

Thats easy - problem for the RBA which is independent from the government, inflation is their scope, they can raise interest rates to combat it.

Alternatively, I'll get rid of LCT, but you're giving me an extra 10% in GST, bringing it up to 20%.

[kevino]

Those pesky Russians in Lancefield are giving you some wackadoo suggestions

[smoo]

This is defined as a car that can carry twice the weight in payload than it can carry in people

Considering the obesity pandemic, and the increasing amount of house bound junk food eating over weight single mothers, I’d have thought this rule will have been amended by now.
5 obese Aussies is well and truely more than half payload of everything short of a super duty pick up.

[Dr Smith]

$250Mill a year is absolutely nothing to our government and I mean not even small change compared to the gas fields and what they produce around Australia in profits to their overseas owners. Owners that minimise their local profits to nothing through inter-company loans and we as Australians don't get the benefits of our resources. Look at how Norway has a sovereign fund and how it's raised.

One gas field above QLD if treated as though a Qatari owned field would earn it $30Billion in royalties over the life of the field and in our case the Australian government will be lucky to get $3 Billion on a projected $130Bill revenue stream for the gas field owners.

We dud ourselves and it's been proven that mining companies may threaten to not spend here and extract the oil/gas/minerals but it's a hollow threat and we don't call their bluff. There is just too so much potential income not to.

Look at how Norway treats it's resources and the miners allowed to extract them.

https://australiainstitute.org.au/po...m-oil-and-gas/

Chasing ute buyers is the low hanging fruit, easy to gather but in the end financially in the scheme of things won't dent Australia's GDP and only wreck sales of those vehicles.

[kevino]

Originally Posted by Dr Smith

$250Mill a year is absolutely nothing to our government and I mean not even small change compared to the gas fields and what they produce around Australia in profits to their overseas owners. Owners that minimise their local profits to nothing through inter-company loans and we as Australians don't get the benefits of our resources. Look at how Norway has a sovereign fund and how it's raised.

One gas field above QLD if treated as though a Qatari owned field would earn it $30Billion in royalties over the life of the field and in our case the Australian government will be lucky to get $3 Billion on a projected $130Bill revenue stream for the gas field owners.

We dud ourselves and it's been proven that mining companies may threaten to not spend here and extract the oil/gas/minerals but it's a hollow threat and we don't call their bluff. There is just too so much potential income not to.

Look at how Norway treats it's resources and the miners allowed to extract them.

https://australiainstitute.org.au/po...m-oil-and-gas/

Chasing ute buyers is the low hanging fruit, easy to gather but in the end financially in the scheme of things won't dent Australia's GDP and only wreck sales of those vehicles.

The gas producers get away with murder - ridiculous

The Greens should be screaming from the rooftops

[Dr Terry]

Quote:- "The Australia Institute concluded the LCT exemption loophole for utes should be ended because it acts as an incentive to buy vehicles that are worse for the environment."

Which vehicles "are worse for the environment." EVs aren't that good for the environment over their whole life.

Dr Terry

[simon varley]

$250m. so, roughly ten bucks for every person in the country. 20c each per week.

for context - ATO reports estimated unpaid company taxes of over $8b, and a further $8b of unpaid GST !!! nobody is talking about that, are they

https://www.abc.net.au/news/2024-04-...ions/103662450

[b0son]

Originally Posted by simon varley

for context - ATO reports estimated unpaid company taxes of over $8b, and a further $8b of unpaid GST !!! nobody is talking about that, are they

not nearly as often as they're on facebook sharing 'cash is king' posts.

[FTE217]

and 3 people Thanked Franco on his thread start.
Too funny, huge $$$'s costing tax payers ffs.

[Franco Cozzo]

The part I love is how you're all focusing on the money and the tiny amount, rather than the fact it keeps hitting the media and you're about to get railed when the government does a knee-jerk reaction to the media attention.

The only reason they mention the money aspect is to get support from people who don't play the game, there's an agenda being pushed here and it's not about the $250M/year revenue.

NVES was just the start, you can bet they'll be looking at the tax incentives on utes, look at the key words that keep coming up.

[Dr Smith]

Originally Posted by Franco Cozzo

The part I love is how you're all focusing on the money and the tiny amount, rather than the fact it keeps hitting the media and you're about to get railed when the government does a knee-jerk reaction to the media attention.

The only reason they mention the money aspect is to get support from people who don't play the game, there's an agenda being pushed here and it's not about the $250M/year revenue.

NVES was just the start, you can bet they'll be looking at the tax incentives on utes, look at the key words that keep coming up.

You don't think people not buying EV's might be a bigger brake on the governments "desires" ...look at Ford Europe reversing it 's decision to go all-electric in EU by 2030...
From Syndromes post in Ford EV thread:
https://www.fordforums.com.au/showpo...0&postcount=64

“I think customers have voted, and they told us that was too ambitious, is what I would say – and I think everyone in the industry has found that out the hard way,” said Gjaja

. ...even pollies know "customers" are voters....

[Franco Cozzo]

Originally Posted by Dr Smith

You don't think people not buying EV's might be a bigger brake on the governments "desires" ...look at Ford Europe reversing it 's decision to go all-electric in EU by 2030...
From Syndromes post in Ford EV thread:
https://www.fordforums.com.au/showpo...0&postcount=64

. ...even pollies know "customers" are voters....

People not buying EVs is only a recent downturn in sales - last year the Tesla Model Y was Australia's top selling car amongst private buyers - funny that when you exclude ABN purchases.

The only reason why (some) governments are starting to back track on lofty goals like banning unleaded/diesel by 2030 is it's too short of a timeframe from current technology.

The reason Ford Europe is reversing it's decision is Ford is the Daewoo of EVs, everyone sat back and laughed at Tesla then left the market wide open for them to dominate the technology.

The reason the 'Mustang' Mach E is a failure is it's priced $15,000 above the market leader which has the best technology and infrastructure network.

You'd be an absolute clown to buy an EV other than Tesla, don't confuse Ford's incompetence and their musical chairs C-suite rotations with what happens in parliament.

[prydey]

Originally Posted by Franco Cozzo

People not buying EVs is only a recent downturn in sales - last year the Tesla Model Y was Australia's top selling car amongst private buyers - funny that when you exclude ABN purchases.

.

Even if you ignore the recent downturn, if you look at sales by fuel type, more non EV vehicles are sold than EV.

[Dr Smith]

Originally Posted by Franco Cozzo

People not buying EVs is only a recent downturn in sales - last year the Tesla Model Y was Australia's top selling car amongst private buyers - funny that when you exclude ABN purchases.

The only reason why (some) governments are starting to back track on lofty goals like banning unleaded/diesel by 2030 is it's too short of a timeframe from current technology.

The reason Ford Europe is reversing it's decision is Ford is the Daewoo of EVs, everyone sat back and laughed at Tesla then left the market wide open for them to dominate the technology.

The reason the 'Mustang' Mach E is a failure is it's priced $15,000 above the market leader which has the best technology and infrastructure network.

You'd be an absolute clown to buy an EV other than Tesla, don't confuse Ford's incompetence and their musical chairs C-suite rotations with what happens in parliament.

And I would add don't always believe political ideology is always set in stone... as Jack Lang and later Paul Keating repeated a few times....'In the race of life, always back self-interest - at least you know it’s trying'

Edit: one only for the hypothetical room...I wonder, if Mach E was priced line ball with Model Y would it sell as well.....sure it would sell much better than it has but where would it go if $ & spec equivalent?

[prydey]

Originally Posted by Dr Smith

Edit: one only for the hypothetical room...I wonder, if Mach E was priced line ball with Model Y would it sell as well.....sure it would sell much better than it has but where would it go if $ & spec equivalent?

Tesla isn't just about the car itself. The infrastructure and the way the car communicates is just as big a selling point.

If I was to buy an EV, at the moment I'd buy Tesla.

[jpd80]

Originally Posted by Dr Smith

And I would add don't always believe political ideology is always set in stone... as Jack Lang and later Paul Keating repeated a few times....'In the race of life, always back self-interest - at least you know it’s trying'

Edit: one only for the hypothetical room...I wonder, if Mach E was priced line ball with Model Y would it sell as well.....sure it would sell much better than it has but where would it go if $ & spec equivalent?

Look at Europe and USA where prices are competitive and Tesla Y is way out in front, it’s not even close.

The biggest problem with Mach E ownership is all the Ford BS that comes trailing after it,(negative whingers)
better off going to a dingy warehouse to pick up you new Tesla, just be sure to wear that
long raincoat, hat and glasses so no one recognises you….(I’m joking fellas)

Personally, I long for the day Ford releases its 2.3 EB PHEV option on T6 if only to shut up all the green whingers.
There are better way to execute electrification in this country and our pollies need to wake up from their dreams.
I don’t dislike BEVs, the battery tech is not ready for mass adoption and neither is our grid.

[b0son]

Originally Posted by Franco Cozzo

The only reason they mention the money aspect is to get support from people who don't play the game

Nothing wrong with that. Utes are largely lifestyle vehicles these days, not workhorses, so why should they be exempt from LCT if non-utes are not? And we sure as sh1t don't need more RAMs and Ftrucks on the roads, but those that insist on buying them, can bloody well pay the LCT if its levied on other cars. Alternatively, scrap the LCT altogether and level the playing field.

[FTE217]

Our sales comparo is FA in the big picture as we know and we’ve been at the end of the curve compared to most countries.
Porsche has reset their EV ambitions now and Reno, Reno no big picture here but long time sales abroad.
USA is slowing plenty as known.
It’s going to be a slow burn now for sometime but for the Chinese invasion due to price.
Anyway Govs have finally woken up don’t talk crap and targets that can’t be achieved - it’ll be years and years yet before the market flips higher % EV compared to ice.


Sent from my iPhone using Tapatalk

[whynot]

Originally Posted by Franco Cozzo

Uh oh, they're onto the loophole:



https://www.theguardian.com/australi...-evs-taxpayers

They're hitting all the 'key words' - loophole, revenue, incentive, environment

Gotta love the weird logic in this type of research. If there is $250M in lost LCT revenue, and removing the exemption on the LCT has the desired effect of killing off large 4WD, then there is no tax to collect.

A real estate sales droid rocking up to a construction site in a 2024 Mercedes E350 EQ Hybrid is one thing. Certainly is hard for the average sparkie, plumber, or chippie to put ladders, lengths of conduit, and timber on the roof of a Merc E350.

Forcing tradies into, say, an Isuzu N Series, just makes the problem worse when it comes to matters like pedestrian impact protection, etc.

Like all left wing newspapers, The Guardian is good at spending other people's money. I wonder what their views will be of the 2025 BYD Shark? 4wd, body on frame, 5.5 m long, weighing 2665 kg, 320 kW of power (all of that energy must come from somewhere) ... But its a hybrid. Does that mean all of the Australia Institute's arguments are a mute point?

[Sprintey]

Originally Posted by Franco Cozzo

Uh oh, they're onto the loophole:



https://www.theguardian.com/australi...-evs-taxpayers

They're hitting all the 'key words' - loophole, revenue, incentive, environment

I believe the other key words are 'First-year apprentices are going to get Raptors. God bless the CFMEU.'

[kevino]

I heard that comment at the cfmeu meet on sixty minutes.

[MITCHAY]

The government killed local production so they adapt to a new market and are very successful, and now trying to kill that too. Can't make this shit up!

[Sprintey]

It's like watching the same episode of a sad soap opera, again and again.

[Top_Ghia]

You can call it a loophole if we can stop calling government funded education and health care “free”.
Nothing is free. It’s tax payer funded.

It’s also time to end the LCT. We already pay stamp duty and GST.