Upgrade of tax scheme urged as sales of new cars plummet

PUBLISHED : Monday, 25 January, 1999, 12:00am
UPDATED : Monday, 25 January, 1999, 12:00am

The motor industry is calling for more tax concessions after seeing new car sales plummet by 25 per cent last year.

The Motor Traders Association said a two-year government scheme encouraging the surrender of old vehicles through registration discounts on new ones had proved successful and should be upgraded.

New car sales dropped from 39,102 in 1997 to 29,338 last year.

Association vice-chairman Michael Rushworth said that despite the drop, the surrender scheme had proved a success and should be improved not just for new car sales, but for safety and health.

'The rebate percentage should be increased to give more incentive to motorists to get their old vehicles off the streets,' Mr Rushworth said.

'The programme needs to be promoted to its full potential. The Budget comes up in March so now is the best time for the Government to consider this.' Most 10-year-old vehicles run on leaded petrol and lack modern safety devices such as airbags.

'Modern engines are unleaded and run a lot cleaner and new cars have much better safety features, so the scheme cuts pollution and accidents,' Mr Rushworth said.

The scheme's success is believed to be behind a huge upsurge in the number of old vehicles surrendered to the Transport Department for scrap last year.

Motorists with vehicles 10 years old or older can be allotted discounts on their First Registration Tax of a new car of up to 25 per cent, or $30,000, depending on the new vehicle's value.

The upsurge has prompted the department to apply for land on the West Kowloon reclamation to relocate its To Kwa Wan surrender yard. It has a second yard in Fo Tan.

A total of 773 cars were dumped by their owners at the yards between January and November last year. Only 355 were dumped in 1997 and 304 in 1996.

Automobile Association spokesman Jackson Ho Yee-tak supported the call for concessions, saying the economic situation had put motorists 'under a lot of pressure'.

He said rising costs were prompting drivers to neglect regular servicing.

'It affects the safety and efficiency of vehicles and engines, so this clearly justifies the call for more concessions,' Mr Ho said.

'Fuel prices alone here are now three times what they are in Australia, Canada and the US. We hope this will be considered in the coming Budget.'