Stuart Robert (Fadden, Liberal Party) Share this | Hansard source

Thank you, Deputy Speaker Adams. The question is: what is the government seeking to hide by introducing this bill into this place in such a manner? I refer the House to the front page of the Australian. I quote from Dennis Shanahan:

THE Rudd Government is prepared to review the $555 million luxury car tax only two weeks after it was unveiled in the budget and even before the new tax laws are introduced into parliament.

The Government is to refer the luxury car tax to the review of the tax system being conducted by Treasury secretary Ken Henry, after calls from the automotive industry and the Government’s declaration that ‘taxes on taxes’ were an anomaly.

Clearly, something happened between when the minister spoke to the press and informed the nation on the front page of the Australian as to what their intent was for this bill and sometime last night when they snuck it through for the second reading speech this morning. Dennis Shanahan then spoke to industry:

Federal Chamber of Automotive Industries chief executive Andrew McKellar told The Australian last night the car industry believed it was ‘a tax on a tax which is on top of other taxes’.

It is surprising that he should be referring to this Labor government and its implementation of new taxes—indeed, there are $19 billion worth of new taxes over the forward estimates. The article continues:

The fact is when you buy a new car people are already paying GST, then they are getting slugged luxury car tax on top of that,’ Mr McKellar said. ‘We think this increase in the rate of the luxury car tax is completely unnecessary and should be reviewed in the Henry review.’

The government agreed with that. I am sure that the responsible minister made it very clear to Dennis Shanahan and the Australian that it would be reviewed—except something happened.

I suggest that the minister had an amygdala hijack and thought that he would rush it through along with a whole range of other bills this morning. Why? Generally, when something is rushed, there is something to hide. The Australian article continues:

Mr McKellar said the luxury car tax had not kept pace with the market and now ‘captured many more family cars than was intended, and this is another reason for it to be reviewed’.

Could it be that the front page of the Australian has also got headlines like ‘Rudd twisted ACCC fuel advice’, referring to the junior minister, Minister Bowen, coming out and misleading the House with respect to what the ACCC advice was, only to be put straight by the member for Wentworth? Could it be that this government was embarrassed by their response, embarrassed by the Adelaide declaration from the Prime Minister that there is nothing more he can do? Could it be that, to try and move the agenda and get petrol away from the spotlight, they have rushed this through—unconscionable conduct completely contrary to what the whip told the 42 new members of parliament about how this placed work—simply as a smokescreen?

Let us be absolutely candid on this tax. The luxury car tax was introduced on 1 July 2000 when the GST was introduced and the wholesale tax was abolished across the board. On cars at the time, wholesale tax was 22 per cent and rose to 45 per cent on the value of a car above the luxury threshold, that threshold being $55,720, wholesale tax inclusive. Thus, the original 25 per cent luxury car tax was designed to offset the removal of the wholesale tax and to ensure that there was no change. In fact, the price of more expensive cars, and cars in general, came down with the introduction of the GST. Since 2000, there has been no change to the luxury car tax rate, because it was not seen as a tax on a vehicle because that vehicle is expensive; it was seen as simply equalising out the loss of the wholesale tax—perhaps not dissimilar to the wine equalisation tax. I am surprised that the Rudd government has not gone after that in the same way they have with ready-to-drinks.

Essentially, there was no change to the wholesale tax rate in the introduction of the GST. The portion of a car’s price over $57,123 is now subject to a 25 per cent tax, in line with the original wholesale tax and no change in the GST. But suddenly there is a change. Suddenly the minister, with an amygdala hijack last night, changed everything. Rather than put it through a review, he thought he would dump it on the House and rush it through as a smokescreen for Labor’s incompetent handling of petrol. The revenue expected from this measure will be $130 million in the next financial year, through to $140 million in the outlying years. This incompetent government believes there will be no loss in revenue from the introduction of this extra tax—from 25 to 33 per cent. Indeed, it believes revenue will increase a further $5 million to $145 million in the outer year of the forward estimates. May I suggest this is a blatant grab for tax without any real thought. It does not take into consideration the loss of corporate tax receipts from companies that will begin to suffer because of the extra tax burden being put on purchases of these automobiles.

The government had 11 years in opposition—11 years to formulate a legislative agenda for when they won office. They are now in office. This parliament has sat for fewer than 30 days in the first six months. The Prime Minister has been overseas for almost a month during that time. This parliament’s sitting program for the first six months demonstrates quite clearly a lack of a legislative agenda. You would have thought, after 11 years of contemplating that agenda, contemplating their view of the world, that when they gained power they would not need to dump a whole heap of bills on the parliament late at night and introduce them and move the second readings in complete contradiction to what the Chief Government Whip told the 42 new members of parliament. Why did the Chief Government Whip not come out during the pollie school at the beginning of the year and say, ‘Look, if we want to screw things up, to hold up and to smokescreen the mistakes of our incompetent frontbench, we will do that’?

See this speech in context