New LCT changes not fit for purpose: MTAA

14 DECEMBER 2023

The Motor Trades Association of Australia (MTAA) is disappointed with the Australian Government’s Mid-Year Economic and Fiscal Outlook announcement regarding proposed changes to the fuel-efficient vehicle definition and an increase in the indexation rate for the Luxury Car Tax threshold for all other ‘non-fuel efficient’ luxury vehicles from 1 July 2025.

“It would be more beneficial for Australian motorists, Australian industry and Australia’s environment if the government removed LCT from the sale of all new low emissions vehicles,” MTAA CEO Geoff Gwilym’s said.  

“Would it not be a better all-round outcome if the government just removed the impost of LCT on all low emissions vehicles and encouraged Australian motorists to get on board the electric vehicle program? Why not make this technology accessible and available for all Australians?”

Mr Gwilym said the latest LCT change announced by Treasurer Jim Chalmers will cause more new cars to sit around unsold in Australian dealerships. 

“The latest change is a $155 million tax grab when Australians are trying to do the right thing by purchasing a low-emission vehicle in trying times,” Mr Gwilym said.

“They need better policy outcomes than this and Australia’s franchise dealer network needs support by serious policy reform. Remove the LCT. It is no longer fit for purpose.”