Motorists and business the big losers after Andrews Government duty hike

1 May, 2017

Victorian consumers and businesses will be negatively impacted by an increase in motor vehicle stamp duty, says the Victorian Automobile Chamber of Commerce (VACC).

VACC and members of the Victorian Automobile Dealers Association, have told the Andrews Government to back away from a plan to increase new passenger vehicle stamp duty by one percent.

The duty hike is to be announced in the 2017/18 Victorian State Budget and will take effect from 1 July this year. From that time, new passenger vehicle duty will increase from $6.40 per $200 of a vehicle’s market value to $8.40 per $200.

“The facts are there for everyone to see: the cost of new cars will go up,” said VACC Executive Director, Geoff Gwilym.

The stamp duty on a $25,000 medium-sized car will increase by $250 to $1,050, while duty on a $45,000 large car will increase by $450 to $1,890, making new cars less affordable for Victorian motorists.

This will result in lost business for Victorians and leave local new-car dealers at a competitive disadvantage with dealers in NSW, where vehicle stamp duty rates are lower.

“There are grave concerns for dealerships based along the border regions of Victoria who suffer in comparison to their interstate counterparts who either pay less duty or have the option to negotiate stamp duty payments with customers,” said Mr Gwilym.

VACC sees the duty increase as a negative for both motorists and business owners.

“In some cases, consumers will bear the increased cost, while in others it will be absorbed by the dealership network,” said Mr Gwilym.

If the stamp duty rates are to be raised, VACC calls on the State Government to report how the new funds will be used to create better resources and services from VicRoads.

“New-car dealers have been dealt blow after blow from State and Federal Governments. Governments must find other ways to raise revenue instead of gouging new-car dealers by constantly increasing fees.

“New-car dealerships are significant employers, and they already pay more than their fair share in taxes. It’s time for the Victorian State Government to acknowledge the massive financial contribution new-car dealers make to the economy.

“It appears to the automotive industry that if the government wants a new road, or to fund a tunnel, then the answer is to squeeze new-car dealers. It has to stop,” said Mr Gwilym.