The Rudd Government has been forced to accept a compromise from the Greens to get its luxury car tax increase through the Senate.
The Rudd Government has been forced to accept a compromise from the Greens to get its luxury car tax increase through the Senate.
The Government had planned to increase the luxury car tax on vehicles worth more than $57,000, from 25% to 33% on 1 July, lifting the price of a $100,000 vehicle by about $2600.
But the Greens had been concerned that the tax would be applied to some of the more fuel efficient cars on the road and appear to have won a deal from the Government that means the luxury tax increase would be waived on cars priced between $57,000 and $75,000 that have fuel efficiency of seven litres per 100 kilometres or better.
That means popular prestige vehicles such as the Audi A4, BMW 3 Series and Saab 9-3 would be exempt from the tax increase.
The deal may still be scuttled by Senator Steven Fielding from the Family First party, who wants concessions for rural drivers (a large number of four-wheel drives attract the luxury car tax) and family vans.
The Government may also be forced to make concessions on changes to the Medicare levy and an increase on excise on alcoholic softdrinks.
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