FED: GST likely to cost car jobs NTAA

AAP General News (Australia)
12-27-1999
FED: GST likely to cost car jobs NTAA

CANBERRA, Dec 27 AAP - Australia's car industry could shed many jobs in the New Year
if the government did not act against a GST-caused crisis, the National Tax and Accountants
Association (NTAA) said today.

Following Mitsubishi Motors Australia's confirmation of further job cuts, NTAA president
Ray Regan said the government must break the buyers strike leading to the July 2000 introduction
of the 10 per cent GST.

The government could achieve this by immediately winding the 22 per cent wholesales
sales tax (WST) on cars back to 15 per cent, he said.

"It is simply inevitable with that buyers strike permeating the market that we should
be very concerned that there could be much, much more significant job losses around the
corner," he told AAP.

"The tragedy is how close to the border we could be to national layoffs in the early
New Year unless the government does the right thing and reduces the existing WST to assist
one of the largest employers in this country."

Sales figures remained strong since the GST deal was struck mid-year only because dealers
were buying cut price vehicles, Mr Regan said.

Volvo had set the trend by reducing its profit margin by 10 per cent and Saab had followed.

"The government is being recalcitrant and negligent not to concede that the market
is more informed than it ever has been and it correctly believes it will get a minimum
six per cent reduction in the cost of a car," Mr Regan said.

"This is a national crisis which the government has been manipulating because sales
are still appearing okay.

"The dealerships are really in a financial crisis and it will be to the detriment of
the government if they don't listen and analyse this."

He said the cost to the government of inaction would be higher than that of foregone WST revenue.

"It's going to cost the government a lot more money in social security debt, bankruptcy
or liquidation problems if the car industry and, just as importantly related industries
that feed the car markers, go down."

AAP rmg/bm

KEYWORD: MITSUBISHI TAX

1999 AAP Information Services Pty Limited (AAP) or its Licensors.