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Tariffs on Imported Cars are a Tax on Motorists

22.12.2006

The Australian Automobile Association –Australia’s peak motoring organisation – has welcomed Government claims it will not freeze tariffs on motor vehicles, saying it will ensure the public does not have to pay artificially inflated prices for their vehicles.

 

AAA, which represents more than 6 million members and their families, supported comments by the Treasurer, Peter Costello, that the Government is not likely to consider a plea fromAustralia’s car industry for additional Government aid.

 

In responding to the local industry’s call to freeze tariffs at 10 per cent and pump an extra $1 billion into the industry, AAA Director Research and Policy, John Metcalfe, said both government and industry need to remember that tariffs on imported cars are a tax on motorists.

 

“Motorists have been reeling from the high cost of petrol throughout 2006 - the last thing they need now is to have a tax on imported cars which make new cars more expensive than they otherwise would be,” Mr Metcalfe said.

 

“Tariffs on the growing market of SUVs are currently 5 per cent, so it makes sense to bring the tariff on other passenger cars down to this level in 2010.  Motorists should not have to foot the bill through these high tariffs to prop up the motoring industry.”

 

Mr Metcalfe pointed to the detailed submission made by AAA to the Productivity Commission in 2002 when post-2005 assistance arrangements for the Automotive Manufacturing Sector were being considered.

 

“We noted at the time that there are advantages of lower tariffs and recommended that the Productivity Commission consider reducing tariffs to 5 per cent and subsequently to zero as part of the APEC’s commitments for 2010,” Mr Metcalfe said.

 

“We also recommended that the Productivity Commission report on the preferential treatment for hybrid vehicles and/or a new policy framework, which would encourage sales of such vehicles.”

 

Mr Metcalfe noted AAA’s, ongoing support for the Government’s post-2005 assistance package of $4.2 billion over 10 years through the Automotive Competitiveness Investment Scheme, alongside comments by the Industry Minister, Ian McFarlane, that this would give the industry a decade of certainty.

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