Craig Thomson (Dobell, Australian Labor Party) Share this | Hansard source

It is a pity the shadow Treasurer was not able to make it here, because we were actually interested to see what the opposition’s position was on these bills. Like on so many of the reforms that we are putting through to make sure that this country is on a sound economic platform, we are still waiting to see what the opposition’s position is on these bills. Are they going to support them? Are they going to oppose them? Or are they going to neither oppose nor support them, consistent with their position on the business that we have brought before this place?

The 2008 budget delivered by Treasurer Wayne Swan put the mandate that the Australian people trusted with the Australian Labor Party to work. It sets out the government’s agenda very clearly, but it is careful in dealing with our present economic climate. We all must remember that we are dealing with the Howard government’s inflationary legacy, fuelled by reckless spending and characterised by largesse and short-termism. No-one can be a better example of that than the shadow Treasurer, who was able to gouge over $1 million from the Regional Partnership rorts—grants, sorry—to his own electorate to prop up a surf-lifesaving club at Bondi. In my electorate, where surf-lifesaving is a major issue, we have five surf-lifesaving clubs that are currently in a great state of disrepair, but were we able to get money? No, because the biggest grant from the Regional Partnerships went to the very regional Bondi. This is a clear example of the way in which the previous government acted. And what do they think of inflation? Again, we are never quite sure. Is it a charade? Is it a fairytale? Is it something to be taken seriously? I am sure we would have been illuminated a little further if the shadow Treasurer had bothered to turn up in this place this morning.

The Rudd government’s first budget has set a new benchmark by delivering on its election promises made prior to the last election. It is very important that it has delivered on all of its election promises. The government has delivered all of its election promises in my electorate in Dobell, and Australia wide. We all know John Howard’s record on keeping promises. Kevin Rudd, Wayne Swan and the new Australian government have clearly made a break from Mr Howard’s legacy of deceit. The Rudd government is a government that believes that all promises are core promises. The 2008 budget has put working families in the Central Coast at the centre of the Rudd government’s commitment to tackle inflation and lay the building blocks for a stronger and more modern Australia. At the centre of the budget is $55 billion in the Working Families Support Package that delivers on tax cuts it committed to during the election, and helps Australian families with child care and education costs. This is welcome news to the thousands of hardworking Central Coast families who last November said they wanted an Australian government that was on their side. They rejected the coalition’s Work Choices laws and policies of division and embraced a team that was more concerned with their issues, concerned with the bread-and-butter issues that Australians find the most important. And that is what this budget delivered, and this bill goes to some of those points.

The budget contained a $40 billion investment in Australia’s future to build new and improved roads, hospitals and schools. The budget is the first step towards a new, more modern Australia, with a first-class economic and social infrastructure. By making Australia’s finances more sustainable, we can now start investing in the schools, hospitals, roads, rail and communication projects that families on the Central Coast rely on every day, but were neglected by our predecessors for more than a decade. This has only been made possible because we have had the courage to take the tough decisions that may cause some pain, but in the longer term will make Australia stronger. Key initiatives of the Rudd government’s first budget include strong economic management, with a surplus of $21.7 billion. Contrast this to the opposition and where they are—or where we think they are—trying to gouge that surplus, trying to put a $22 billion hole into the surplus that we have worked so hard in this budget to achieve. We have abolished $7 billion worth of the Liberals’ reckless spending. We have our Working Families Support Package, worth $55 billion; unprecedented investment in Australia’s future—around $40 billion put aside for infrastructure, education and health improvements; $15.2 billion for sustainable water initiatives and to help tackle climate change; more than $22 billion for road and rail projects; and an investment of $2.4 billion for Australian seniors and carers.

I would like to take this opportunity to once again congratulate Wayne Swan on the budget. He has shown an extensive knowledge of the economic barriers that face working families in outer metropolitan communities. These are families that are looking for more than just the previous government’s bias towards handouts at election times. These are families who delivered us government, and we are intent on delivering for them. By investing in infrastructure, water, child care, GP super clinics and an education revolution, we are telling these families that they now have a government with them at the forefront of their minds.

I consider this budget not only a win for Australian working families but also a win for specific projects on the Central Coast and in my electorate of Dobell. In this budget we saw significant local roads funding. We are an area where a lot of work needs to be done on roads. The Central Coast is some 90 kilometres long and has a difficult geography, which means roads are at the centre of people being able to get around, to to get work and to be mobile. We were also promised a super GP clinic in the northern area of the Central Coast, and again this has been vital. We are down to less than 83 doctors in my electorate, and the average age of those doctors is 59, which means they will all soon be retiring. It is absolutely vital that the government, rather than playing the blame game in terms of public hospitals, have said, ‘We’re prepared to put money into a super GP clinic, take the pressure off the public hospitals, attract doctors to the area and make sure that the people of Dobell have a better ability to get access to the medical facilities that they require.’

Of course the budget also gave us $20 million to fix up the iconic Tuggerah Lakes, the jewel in the Central Coast’s crown. These lakes, through developments around the lakes and neglect by the previous government, have become more and more unhealthy. We have stepped up to the plate in this budget and said that we are prepared, over the next five years, to put up $20 million to make sure we can bring the environment and the beauty of Tuggerah Lakes back to the pristine condition that it once was in.

This is a decent budget, good for the people of the Central Coast, good for Australia. I started this speech about the whole of the budget and the benefits to working people because I hear that those opposite want to drive a Ferrari through our responsible budget. The Liberals have gotten into their convertibles and are driving away from economic credibility as fast as they can. There are a lot of people doing it tough out there. In my electorate, we have the lowest median household income in New South Wales. The majority of families in my electorate are not talking about luxury cars around the kitchen table; they are trying to stay afloat. Peter Costello’s and Malcolm Turnbull’s inflation legacy is hurting. I know those opposite call it a charade, but ask anyone in the street whether inflation is hurting them at the grocery checkout and they will tell you inflation is a lifestyle-changing reality. They would certainly tell you where to go if you told them it was a fairytale, as some have recently suggested.

The luxury car bill increases the luxury car tax from 25 per cent to 33 per cent from 1 July 2008. The government believes that Australians who can afford luxury vehicles have the capacity to contribute to revenue at a higher rate than other car buyers. It is estimated that around 10 per cent of all new car sales—around 100,000 sales—in 2007 were subject to luxury car tax. This new rate will apply to all taxable supplies and taxable importations of a luxury car after 1 July 2008.

There are no transitional provisions or any other changes such as to existing exemptions for disabled persons. The relevant legislation already allows contracts to be varied to take account of changes to certain indirect tax rates, including luxury car tax rates. The government has increased luxury car tax as part of its plans to make the tax system fairer. Additionally, the measure is expected to contribute to the necessary task of ensuring the budget relieves pressure on inflation. This measure is expected to raise $555 million over four years.

Since 1979, successive Australian governments have taxed luxury vehicles more heavily than other vehicles. It is not a new concept. The luxury car tax was introduced on 1 July 2000, when the goods and services tax, the GST, was introduced and the wholesale sales tax abolished. Since that time there has been no change to the luxury car tax rate. Luxury car tax applies to cars whose GST-inclusive value exceeds the luxury car tax threshold of $57,123 for 2007-08. The luxury car tax rate applies to the GST-exclusive value of the luxury car that exceeds the luxury car tax threshold.

A car which is specially fitted out for transporting a person with a disability, seated in a wheelchair, is excluded from the definition of ‘luxury car’ and is not subject to luxury car tax, provided the car is not GST-free under GST law. This concession is available to any person, including a carer that modifies a car they purchase for a person with a disability, seated in a wheelchair, before the time of taxable supply by the dealer—that is, before the sale of the car. GST and luxury car tax do not apply to the value of any modifications made to a car solely for the purpose of adapting the car for driving by, or transporting, a person with a disability. Again, this concession is available to any person, including a carer, that purchases a car and modifies it accordingly. However, if the value of the unmodified car exceeds the LCT threshold then the value of the unmodified car will be subject to LCT.

A disabled veteran or eligible person with a disability can purchase a car GST-free up to a value of the luxury car tax threshold. GST and luxury car tax is payable beyond that amount, which is currently $57,123. This treatment would apply to a vehicle that is not modified but has been purchased to meet the needs of a disabled person because of the vehicle’s size or height. To qualify for this concession the disabled veteran must intend to use the car for personal transportation for two years or until the car has travelled 40,000 kilometres. To qualify for this concession the eligible person with a disability must intend to use the car for their personal transportation to travel to and from gainful employment for two years or until the car has travelled 40,000 kilometres.

Where the cost of a conversion pack is included in the cost of the car, when the value of the car exceeds $57,123—inclusive of the conversion pack—then LCT would normally be payable on the amount above the threshold. However, if the conversion pack is used to make modifications before the taxable supply then the cost of the modifications, including the cost of the conversion pack, may not be subject to LCT. If the conversion pack is purchased after the car is purchased from the dealer and then used to convert the car, the conversion pack is LCT and GST free. There is no evidence that the luxury car tax will increase car prices more generally. Nor will it disadvantage people with disabilities. The tax laws already provide exemptions for people with a disability from the luxury car tax.

Treasury has also consulted with disability groups to ensure they are not adversely impacted by the measure. All we are getting is scaremongering from the opposition in terms of this particular prospect, and that is something that cannot be accepted. Of the 20 top-selling cars in Australia, less than four per cent of those sold are subject to luxury car tax, and for the lower end the increase is in the hundreds, not thousands, of dollars. The so-called ‘Tarago tax’ only applies to one Tarago model, and the price increase is just over one per cent. The entire Tarago category—including the four other models that are below the luxury car tax threshold—are less than half a per cent of the passenger vehicle market.

We have seen nothing but carping from Dr Nelson and his heir apparent, Mr Turnbull—who has decided to join us here today—since the budget. We have seen a team that has lost its way, that is not quite sure what it believes. We should not forget that Dr Nelson is the guy who told a rally, and a television camera, that he had never voted Liberal in his life. He then said he had in fact voted Liberal before. This is the same person who urged Kevin Rudd to be tough to China regarding Tibet and then attacked him when he did just that.

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