The abolition of Australia’s $880m-a-year luxurious automobile tax (LCT) has develop into a key block to a possible commerce cope with 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 massive numbers.
However with the native automobile trade 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 automobile market.
Luxurious 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 automobile worth 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 want to have safer vehicles and extra energy-efficient vehicles, however they now discover them too expensive,’ Dr Pulch advised 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 Might, it’s going to virtually definitely need to make main concessions to the EU’s large automobile trade, 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.
However protections for round 400 European merchandise named for particular locations – reminiscent of 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 automobile tax
The EU desires solely cheese from Parma to be known as parmesan, the feta title to be reserved for cheese from Greece, and lots 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 shield its merchandise with European names.
‘Folks migrated right here from Europe (and) introduced their experience in making feta and different cheese varieties,’ he advised the Weekly Instances.
‘They need to be capable of put these names on the label to replicate the talent that goes into making the product.’
Porsche vehicles (pictured) are topic to a luxurious automobile tax of 33 per cent when imported into Australia
New Zealand’s latest cope with 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.
However Australia has extra bargaining chips than its trans-Tasman neighbour, being a vastly greater financial system and having the LCT to dangle in entrance of European negotiators.
The Coalition’s final Treasurer Josh Frydenberg beforehand advised Day by day Mail Australia that ‘the federal government has no plans to part out the posh automobile 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 looking for to cease Australian producers from utilizing the title feta on their cheeses