Government won’t rush to axe $1 billion in tariffs on imported vehicles

THERE may be a silver lining to the shutdown of the vehicle industry — a fall in the price of imported cars. But the Government’s going to take its time making a decision.

The AAA’s Andrew McKellar says there is no justification for keeping the tariffs on impo...

THE chances of a silver lining to the dramatic shutdown of the vehicle industry — a fall in prices for imported cars — has been put off by the Government.

Possibly forever.

Tariffs which can add more than $1000 to the price of an imported car would not be needed if there was no local industry to protect.

But the Government will be tempted to keep the $1 billion a year raised by these levies on vehicles made overseas, which account for nine out of 10 cars sold here each year. It won’t be rushing in to axe the tariffs.

Treasurer Joe Hockey said the issue would be put to a review of all taxes before a decision was made.

Joe Hockey says the Government will review the issue of import taxes.

The Australian Automobile Association (AAA), representing motorists generally, today called for the tariffs to disappear immediately now that Toyota, Holden and Ford have announced they will shut down by 2017.

"If axing is good enough for the carbon tax, good enough for the mining tax, it should be good enough for these tariffs,’’ said the chief executive of the Australian Automobile Association Andrew McKellar.

"If tariffs were designed to help protect the local industry then there is no longer any justification to maintain them.

"The removal of tariffs could save the average new car buyer between $1000-$2000 on the cost of a vehicle. The Government must use the upcoming Federal Budget to announce the end of vehicle import tariffs in order to improve motoring affordability.’’

The AAA’s Andrew McKellar says there is no justification for keeping the tariffs on imported cars.

However, the Government is searching for ready cash. The tariffs are expected to bring in $920 million this financial year and just over $1 billion in 2015-16.

The AAA said tariff savings would immediately be passed on to buyers as car yards would be keen to boost sales through lower prices. The tariffs can add $900 to the prices of a car valued at Customs at $25,000, which would increase to $1200 when the vehicle was offered for $30,000 in the sales yard.