EU MUST be joking – European Union DEMANDS Australia dumps luxurious automotive tax if it needs a commerce deal
- Luxury automotive tax is price $880m to Australia, however the EU needs it abolished
- EU additionally needs unique use of regional product names comparable to feta cheese
- Australia’s automotive market price $20bn-a-year and the EU needs an even bigger slice
The abolition of Australia’s $880m-a-year luxurious automotive tax (LCT) has develop into a key block to a possible commerce take care of the European Union (EU), whereas the fitting for Australian producers to name cheese ‘feta’ and ‘parmesan’ can also be up for negotiation.
The LCT was launched 22 years in the past by then prime minister John Howard to guard native producers when Australia nonetheless produced vehicles in giant numbers.
But with the native automotive business gone, the LCT stays on the books solely as a revenue-raising measure.
Now, the 27-country EU is dangling the carrot of extra entry to Europe for Australian farmers in return for giving it extra entry to Australia’s $20billion-a-year automotive market.
Luxury vehicles such because the Lamborghini pictured are topic to very excessive tariffs when imported into Australia
The EU’s outgoing ambassador to Australia Michael Pulch mentioned the LCT is up for negotiation as a result of it is largely solely European merchandise which might be affected by it.
The LCT is charged at 33 per cent on the portion of a automotive value over $66,331, or $75,526 for extra vitality environment friendly automobiles.
On prime of that, European vehicles are additionally hit with a 5 per cent tariff, which raises $330m a 12 months.
‘It makes it too costly for a lot of Australians who wish to have safer vehicles and extra energy-efficient vehicles, however they now discover them too expensive,’ Dr Pulch informed The Australian.
Negotiations for an Australia-EU commerce deal will resume in October after a rocky interval following the ousted Coalition authorities’s cancellation of the $90bn French submarines deal in addition to its local weather change insurance policies.
With Australia hoping to signal an settlement by May, it is going to nearly definitely must make main concessions to the EU’s big automotive business, which is usually headquartered in Germany, Italy and France, however with crops throughout the continent.
The EU would, in return, permit extra entry to its markets for Australian farmers, although any enhancements are more likely to be gradual.
But protections for round 400 European merchandise named for particular locations – comparable to parmesan cheese from Parma and Prosecco glowing wine, named after an Italian village – are additionally on the desk.
The outgoing EU ambassador to Australia Michael Pulch (pictured centre) mentioned the upcoming negotiations on a commerce settlement will embody Australia’s luxurious automotive tax
The EU needs solely cheese from Parma to be referred to as parmesan, the feta identify to be reserved for cheese from Greece, and plenty of different regional European names which might be frequent on Australian-made foods and drinks, to be restricted,
Australian Dairy Farmers president Rick Gladigau mentioned Australia should defend its merchandise with European names.
‘People migrated right here from Europe (and) introduced their experience in making feta and different cheese varieties,’ he informed the Weekly Times.
‘They ought to have the ability to put these names on the label to replicate the talent that goes into making the product.’
Porsche vehicles (pictured) are topic to a luxurious automotive tax of 33 per cent when imported into Australia
New Zealand’s latest take care of the EU permits simply $600million of tariff-free beef exports and 10,000 tonnes of dairy merchandise into the EU, and solely after seven years.
But Australia has extra bargaining chips than its trans-Tasman neighbour, being a vastly larger financial system and having the LCT to dangle in entrance of European negotiators.
The Coalition’s final Treasurer Josh Frydenberg beforehand informed Daily Mail Australia that ‘the federal government has no plans to section out the posh automotive tax’.
It stays to be seen if his successor, Labor’s Jim Chalmers, takes a extra conciliatory tone within the upcoming negotiations with the European Union.
A cheesemonger is pictured placing items of feta cheese in a bag for a buyer in Athens, Greece. The EU is in search of to cease Australian producers from utilizing the identify feta on their cheeses