CHANGES TO VAT paid by dealers on used car prices was the only good news in yesterday’s supplementary Budget for a struggling industry that saw diesel prices rise and no sign of the hoped-for scrappage scheme.
New car sales are down 65 per cent this year, with full year sales estimated at around 60,000. Government revenue from new car sales is set to fall by 80 per cent. It was hoped a scrappage scheme could have pushed the figure up to 70,000.
“We are hugely disappointed with the decision not to introduce a scheme that would have helped secure jobs,” said Alan Nolan, chairman of the Society for the Irish Motor Industry (SIMI).
The increase in diesel prices is estimated to affect some 17 per cent of motorists, according to the AA, but “the cost of motoring does not just affect motorists”, said Conor Faughnan, the AA’s director of policy. “It affects the cost of living for almost every household. Fuel cost rises also add to the cost of business, affecting virtually every product and service produced in the Irish economy.”
Faughnan also expressed concern at the increase in the levy on motor insurance to 3 per cent. “The timing could hardly have been worse – the cost of motor insurance is rising rapidly,” he said. “Motorists all over the country are noticing significant price increases already and the Government’s actions have made that worse.”
There was serious disappointment at the lack of a scrappage scheme.
John McCabe of McCabe’s Toyota dealership in Duleek, Co Louth, said the Budget offered nothing to kick-start the motor trade and that failure was foolish, given the billions it generates in tax revenue.
Eddie Murphy, chairman of Ford Ireland, said: “The scrappage scheme is a proven stimulant. . . We are witnessing its positive impact on state revenues in other countries. That our Government should fly in the face of this evidence is disappointing. . . Aside from the increased Exchequer revenues, each 1,000 cars sold through the scheme could have saved 780 tonnes of CO2.”
The one bit of good news was the introduction of new VAT rules on used cars. “We welcome the changes here. . . but the lack of a scrappage scheme has left us incredulous,” said Nolan.
