The coalition has confirmed it will oppose the federal government's plan to increase the tax on luxury cars, labelling it punitive and inflationary.
The announcement follows today's release of a report from the Senate economics committee's inquiry into the proposed tax hike.
The government wants to increase the tax from 25 to 33 per cent on all new vehicles costing more than $57,123.
The tax hike is expected to raise $555 million during the next four years.
"The coalition will oppose the Rudd Labor government's punitive 30 per cent increase in the so-called luxury car tax," opposition industry spokesman Eric Abetz said in a statement.
A member of the Senate committee, Senator Abetz says the evidence presented to the inquiry proved the tax hike was bad policy.
"It is the politics of envy which will increase inflation," he said.
"It will damage the Australian automotive industry."
Increasing the luxury car tax would restrict innovation in environmental and safety features of vehicles, Senator Abetz said.
The opposition has previously pledged to oppose government bills to increase the tax on ready-to-drink alcoholic beverages, a new excise on condensate, and changes to the Medicare levy surcharge threshold and commonwealth seniors' health card.
