Proposed luxury tax worries Australian industry officials

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The Australian Labor Party in New South Wales plans to levy a luxury tax on boats and high-end vehicles if it wins next month’s elections in that state. Party officials told the Northern Daily Leader that proceeds would be used to add more than 5,500 nurses and midwives in the state’s hospitals.

Under the proposal, boats that sell for more than A$200,000 would attract a duty of A$7,600 and A$9 for every A$100 above A$200,000. Boating industry officials in the state are pushing back against the idea. Currently, there are no stamped duties on new-boat sales.

A boat that sells for A$500,000 would attract a duty of A$40,000; a boat that sells for a A$1 million would have a A$100,000 duty. The Labor Party said the duty would apply to the top 3 percent of boats sold in the state.

The Boating Industry Association issued a statement saying it was “surprised” by the proposal. It said that the number of boats sold each year in the state is not as high as Labor says and that it would push potential buyers to other states. The BIA statement said the tax will mostly hurt “working families” who enjoy boating and many small businesses and their employees who sell and service the boats.

“The tax will drive sales and jobs away from NSW to other states, and sadly, the perception that boats over the value of $200,000 are a tax on the wealthy is fundamentally wrong,” said BIA president Alan Blake in the statement. “The knock-on effect of this proposal has not been taken into consideration by the Labor Party. The businesses that service, store or supply provisions for these vessels are small family businesses who will feel a direct impact of such a tax.”

The Labor Party said the tax on boats and another on luxury vehicles would raise about A$240 million to pay for additional nurses and midwives.

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