Private vehicle tax deduction, a hypothetical

[flappist]

With all this doom and gloom over the local car industry I have thought of an idea to help improve sales and maybe get us back on track.

Every vehicle sold here in Australia has some local component.

For some it is very minor with just the handling, delivery and warehousing.
For others; Falcon, Territory, Commodore, Camry etc. it is quite significant.
Another forgotten group are the LHD conversion specialists who are almost always much more than 50% Australian and the custom vehicle builders e.g. Herrod with the DJR or KPM with the Streetfighter etc.

Commercial entities have always been able to claim vehicles against taxable income which of course has never been used to buy FPV/HSV/whatever as a "commercial vehicle".

So, in order to promote "Australian Made" to private PAYG people here is my cunning plan.

Each vehicle, to be elligible, declares the "Australian made percentage" of the selling price.

After the purchase that amount is available to be claimed as a tax deduction against PAYG income up to a percentage of total income over 3 years.

e.g. in a simplistic example:
The Flapmobile sells for $50k.
It has a 40% Australian component which provides a $20k claim.
You earn $50k gross a year and pay $10k tax.
For 3 years you can claim $6666 off your taxable income so you only pay tax on $43,333 which is this simple case is $8666 so you get a free $1333.
So effectively you get a $5k or 10% discount ON TOP of what ever you can negotiate.
If the Flapmobile was 80% you would get double that.
N.B. before the accountants and tax experts go bezerk these are very simple numbers to get the concept across only.

This applies to new cars that are privately registered for private use only and is limited to one car per tax payer.

If you want to buy a non Australian or second hand car you are not really any better or worse off than you are now but should you choose to buy Aussie you are effectively deciding where your tax dollars are going in the same way that some currently donate to charities or churches.