MTA NSW Group welcomes EU trade progress but says Luxury Car Tax reform opportunity missed

MTA NSW Group has welcomed progress under the newly announced Australia–European Union Free Trade Agreement (FTA), but says the deal falls short of delivering meaningful reform to the outdated Luxury Car Tax (LCT).

MTA NSW Group is Australia's largest state-based automotive industry association, representing NSW and ACT markets. The association said the reduction of trade barriers, including changes to automotive tariffs, represents a positive step for consumers and the broader economy. However, it has expressed disappointment that the agreement did not go further to abolish the LCT.

MTA NSW Group CEO Stavros Yallouridis said the agreement was a step forward, but a key opportunity for reform had been missed.

“We welcome the progress made through the Australia–EU Free Trade Agreement - free trade agreements are a positive step for the economy and for consumers. However, this represents a missed opportunity for the automotive industry to remove a redundant tax.”

“MTA NSW Group has been advocating for the abolition of the Luxury Car Tax for many years. This was the clearest opportunity to deliver that reform, and it has been missed.”

The LCT was introduced more than two decades ago to protect Australia’s domestic vehicle manufacturing industry, which no longer exists. MTA NSW Group said the tax is now outdated and continues to distort the market, placing unnecessary costs on consumers and businesses.

The Association also noted that while recent changes to LCT thresholds for certain vehicles may provide limited benefit, they do not address the fundamental shortcomings of the tax.

“Eliminating the Luxury Car Tax would reduce the cost of vehicles for Australian households, improve access to newer and safer cars, and better support the transition to lower-emission technologies,” Yallouridis said.

“MTA NSW Group will continue to work with industry and government to advocate for a fairer, more modern tax system that reflects today’s automotive market and delivers real benefits for consumers and small businesses.”