Comments on: Newspoll: 57-43

By: William Bowe

William Bowe — Mon, 12 May 2008 08:46:52 +0000

By: Dyno

Dyno — Mon, 12 May 2008 08:35:05 +0000

Agree with 166 and 167 – it’s utterly trivial. Turnbull should have just said so, if he had been smarter.

By: onimod

onimod — Mon, 12 May 2008 08:33:15 +0000

166
bingo – big kerfuffle over a small issue
From the ALP perspective any discussion can be written off by its insignificance. Allbull fell for it hook line and sinker.
Maybe he had the fluffly slippers on and knew stuffing another foot in his mouth wasn’t going to hurt that badly?

By: ruawake

ruawake — Mon, 12 May 2008 08:24:37 +0000

The “Luxury” car tax change will make little difference, it kicks in at about $60 grand after on road costs. So cars that cost around $63 Grand may be cheaper as the price will drop to avoid the tax.

As my mum said on mums day “If you want a Jag and it is going to cost $3 grand more, you are still going to buy it”. Or who cares if your company lease payment goes up $20 a week?

Good politics though – tax those rich folks.

By: onimod

onimod — Mon, 12 May 2008 08:00:36 +0000

Car prices
car prices are bizarre things. If you delve a little deeper in to it you can find plenty of models being sold in Oz that are loss makers for the major manufacturers, for the sort of reasons that Fites is suggesting.
Here’s a specific example i know about: a manufacturer has designed and constructed a vehicle and tooled up for years of production for what is a very mass market semi-luxury vehicle that is sold world wide. This vehicle has been identified with this brand for decades. Unfortunately the construction cost of this vehicle is higher than the sale price for the vehicle in almost all markets across the globe. Given the design cycle of the vehicle there’s stuff all they can do about it except keep pumping them out to maintain market volume; each one is sold at a substantial loss.
To correct the problem they have to wait for the next design cycle and design the new car to be cheaper to construct. In the mean time they have to keep adding features and rebates to the car they’re already selling at a loss to keep the current production run competitive.
The dealers are still making their profit, as are the shipping companies and various country wholesalers while the parent country cops it hard.
International economics at work.

By: supercededman

supercededman — Mon, 12 May 2008 07:42:57 +0000

(89) Just me,

Cosgrove should be reminded that our ‘great leader’, JWH, was so in touch with the troops he adored that he ‘forgot’ to invite the widow of SGT Andrew Russell, to the wreath-laying ceremony (for her husband) at the AWM in 2003.

Scumbags.

By: Dyno

Dyno — Mon, 12 May 2008 06:28:13 +0000

GB @ 162,
Agree with that, I don’t think Fites was saying all car prices would go down as a result of this tax increase. They might go down for other reasons, though.

By: Gary Bruce

Gary Bruce — Mon, 12 May 2008 06:23:49 +0000

Thanks Dyno – I don’t think he is suggesting all prices will go down. (”I wouldn’t be surprised if we see in fact some tuning down of some prices just to make sure that some do come in under that limit.”)
He is right to suggest it is a very competitive market out there particularly if people shy away because of the tax increase and then we may see “bargains” being offerred. I’ve seen that happen plenty of times with many items. If they are not selling then something has to be done.

By: Socrates

Socrates — Mon, 12 May 2008 06:19:26 +0000

Dyno

If you are familiar with the economic literature about price stickyness and price substitution, there are many examples where exactly that can happen, irrespective of exchange rate movements. The opposite can also happen. Basically, producers sell for the price that the market will bear, sometimes absorbing cost increases, other times increasing prices when there is no cost increase. So I certainly don’t suggest tax increases reduce prices generally. That isn’t what I (or Fites) said either. It depends on the market. In this case, it might well mean a price fall for SOME cars.

The point is not that either an overall car price rise or fall will necessarily be the outcome in this instance. The point is that Turnbull, for all his business reputation, has made a statement that is obviously false – that ALL car prices will rise from a tax increase on one sector of the car market. He really demonstrated a sound bite level of knowledge of economics when it comes to public policy. Swan must be laughing.

By: Dyno

Dyno — Mon, 12 May 2008 06:05:41 +0000

Well, putting taxes up rarely reduces the price of stuff, does it?
What is more likely is that exhcnage rates are making imported vehicles cheaper, so the govt can put the tax up without it really being felt in anyone’s pocket. A neat, if somewhat phony, piece of politics, that doesn’t hurt anyone much, if at all.
But a tax increase making the price go down? Sorry but I don’t think too many people are going to believe that!