With the coalition committed to opposing the luxury car tax, it would seem that if the Government is to have any chance of passing the proposed tax increase, it will have to negotiate.
The Australian Greens says it will likely back the opposition by demanding the legislation to be withdrawn and redrafted.
The Greens want to block the planned tax hike on luxury cars unless it is changed to increase tax only on fuel-guzzling vehicles.
Incoming independent senator Nick Xenophon also says he wants amendments to protect hybrid vehicles.
Greens Leader Bob Brown has questioned the tax increase, from 25 to 33 percent which was introduced in Labor’s first Budget applying to cars above $57,180 from July 1.
The tax is expected to affect the sales of about 105,000 cars a year.
Senator Brown told ABC radio recently that feedback from the streets indicated people were amazed the government would want to tax some of the most fuel efficient cars in an age of climate change.
“If you’re going to tax people, tax the gas guzzlers, that’s what it comes down to.”
“Barring any talks in the meantime, (Greens Senator) Christine Milne will be moving in the Senate to have the government withdraw the bill and redraft it to make it climate friendly,” Senator Brown told ABC Radio.
“Surely a bit of commonsense there will be levied by the Senate if the Government doesn’t improve its intention there to tax some of the more expensive or luxury cars available on the market.”
Xenophon is also concerned about the impact of the tax hike. “If it’s a hybrid vehicle, an ultra low emissions vehicle, it doesn’t make sense to me, without cutting edge technology, getting slugged in the same way as a gas-guzzling Maserati,” he told ABC Radio.
The Government needs the support of the seven balance of powers senators, including the five Greens, to push its legislation through the upper house against Coalition opposition.