News

Pluses and Minuses for Motorists from Election Policies

25.9.1998

The Coalition's tax proposals would provide some savings for new car buyers and those purchasing used cars from private sellers, while four-wheel-drives bought for private use would be more expensive under Labor.

 

The introduction of a GST was likely to widen the disparity between city and country petrol prices, but higher fuel prices for ordinary motorists were inevitable whoever won the election because both Parties would continue to adjust fuel excise in line with inflation every six months.

 

The condition and safety of the roads would improve marginally as a result of additional funding promised by the two Parties.

 

These are main findings of an analysis by the Australian Automobile Association of the impact of the Federal Government's and Opposition's election policies on motorists.

 

The prospect of cheaper new cars under the Coalition's proposal to replace the 22 per cent wholesale sales tax with a 10 per cent GST has been welcomed by the national motoring body, although its research showed the majority of motorists would still not be able to afford a new car and would have preferred a cut in petrol tax instead.

 

Executive Director, Lauchlan McIntosh, said lower new car prices would flow on to the used car market, but the savings would be offset to some extent by the application of the GST to dealer profit margins on second-hand vehicles. However, the GST would not apply to vehicles sold privately.

 

Car insurance premiums plus the labour component of vehicle servicing and repair costs would be subject to the GST and would therefore increase as they were not taxed at present. On the other hand, spare parts prices would fall as a result of the Coalition's tax changes.

 

Mr McIntosh said the only measure which would directly affect motorists under Labor's tax proposals was an increase in the import tariff on four-wheel-drives from five to 20 per cent, in line with the rate applying to other passenger cars.

 

Additional funding for roads of $195 million by the Coalition and $150 million by Labor would be useful, but fell well short of what was needed to provide a safe, efficient road network.

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