Andrew Laming (Bowman, Liberal Party) Share this | Hansard source

Following on from my colleague the member for Aston, seated behind me, those 10 years of economic sunshine now look like a distant memory. This year we have the new complexion, the wall-to-wall Labor governments and absolute panic at the first sign of economic trouble. This year we have seen a new government making decisions that have been based mostly around taking on the rich and punishing them because that would be good for the polls. We have had the Hawker Britton mentality suffused through this government to the point where the term ‘working families’ is an utter focus and that, in their minds, small issues can be swept through this rushed legislative agenda that we are witnessing today. Two weeks ago we saw a series of prebudget leaks to the point where budget day became a complete anticlimax because the whole thing had been run through the Australian media in a series of saccharine setups to ensure that it was all going to wash okay. Two weeks ago we heard about the increase in this poorly named luxury car tax without it being fully thought through and without thought for the implications for the Australian vehicle industry. These luxury car tax bills will pick up, as my colleague seated behind me has just mentioned, a number of vehicles manufactured in this country that you would hardly call luxury cars.

It is interesting that on the one hand we have this incredible prevarication on the other side—a fear of making a decision and a desperate desire to refer it to an 18-month committee. Let us remember this review of the tax system runs for 18 months and will report publicly as late as 2010, which will be too late to make that year’s budget cycle. You effectively have a government abrogating any decision making on these important issues in its first term, based on some assumption that it can just review its way through its first term. This is a government which, whilst in opposition for 12 years, had an opportunity to pull these ideas together into a coherent policy and a government that had an opportunity through its much vaunted 2020 Summit to pull together some great ideas. It seems that nothing has come of it. It is almost an admission from the other side that there is not only fear of making a decision but a fear to do it within a reasonable time frame. The 18-month delay on important tax issues is where some of the legislation and decisions are ending up. On the other hand, there is this juxtaposed rush on some of the issues that have been put to this House today to be forced through. It makes very little sense. Of course, you will read one story in the paper today—thought bubble No. 500 from the Prime Minister’s office—that this is going to be referred to the Henry review and then there will be an 18-month wait; but then of course up it pops on the program today for urgent discussion and decision.

What we really hoped for, as most Australians did, was just some fresh ideas to become reality. We expected that on some of those big areas there would be leadership. I know that there has been a certain desire, particularly from the less-discerning media outlets, to build up this new government—and there are a lot of people who do not want to tell voters that they might have made a wrong decision last November—but the longer we go on this year the more we are seeing not only a lack of fresh ideas but a rush on some for which there has been no legislative analysis or scrutiny whatsoever and on others a petrification, a driven popularity poll approach to making choices.

We need to take that back to the leader’s office. What we have here in this Prime Minister is a person who has traditionally allowed ideas to percolate through a bureaucracy to him as an options paper. That is the way he has always made decisions. He has never been a doctor at the bedside having to make that very tough call on what is right or wrong. There is no sense coming from this Prime Minister that he has a long-term ideological focus and an ideological destination for this country. It is the opposite. He is waiting for a conciliatory, consensus based approach where no-one really knows where they are going. But his background is such that he waits for it to percolate through a bureaucracy before he even dares move an inch—almost like that junior medical student with the white coat peeking over the shoulder of the consultant doctor who, when he has to make the choice between two life-threatening diseases, says, ‘I will do this.’

I have not seen any notion from this Prime Minister that the luxury car tax fitted into a broader tax based agenda that had to wait 18 months. Nor have I seen any notion that it is so urgent that it has to be forced through today. There is utter confusion. Why? Because this is a leader who has never really had to make an unpopular decision that is right for the long term. It is exactly the reverse; we have a person making the short-term ‘save my skin’ decisions for tomorrow’s headline. And we all know about yesterday’s headlines and how he is desperately scrambling to change the subject.

Obviously, Australians are smart enough not to allow that to happen. There is no urgency associated with this measure today, except probably the urgency to get it right—to properly scrutinise this bill; to make sure that it does not impact on Australians driving larger vehicles; and to ensure that it does not impact on our vehicle manufacturing industry in the southern states. I think they would take great umbrage to being told that some of the vehicles they are producing are luxury vehicles and deserve to be taxed at 33 per cent.

I think we all know the history that back in July 2000 this tax was introduced to compensate in some way for the removal of wholesale sales tax that led, potentially, to luxury cars becoming cheaper than they otherwise should have. So it was introduced and the 25 per cent level was determined then. The decision to jump now and apply the post-GST value to these vehicles so that they are caught up in the tax, but then apply the tax itself to the GST exclusive value, is just part of the untidiness of the legislation. Had we had an opportunity to do it properly, we could have made sure that what came out of it was an appropriate taxation measure, rather than what is being forced on the parliament today.

What is effectively happening today is that the government is becoming road kill—from ‘fool watch’ to Fuelwatch—and desperately trying to change the subject by pushing through other pieces of legislation that are half baked. That is a great shame for democracy. There is no precedent that you, the members on the other side, can put forward to show that we did the same thing, save for the tiniest of changes that needed to be made in the House of Representatives before urgent legislation was passed on to the Senate.

But I ask you to make your case as to why this piece of legislation must be pushed through this chamber today. That is yet to be heard. Of course, on the one hand there is the absolute fascination with reviews. And if it means putting ex-Labor premiers in charge of it, that is one thing, but then to ignore your own Labor-led review and push through legislation actually shows the dismissive attitude that you hold towards your own alphabet soup of reviews.

All of these things could have been done in opposition but were not. You have a responsibility to govern and you should do that with appropriately developed legislation that the average Australian would say makes our country a better place. Instead we have this half-baked, poorly conceived legislation pushing up a tax that is more inflationary. Do not forget the working families—that favourite government expression—who buy these vehicles and now find themselves with less money to apply to the kitchen-table test of deciding what to spend their limited resources on today. You are hitting large families in particular with an additional tax without properly thinking through the implications for many vehicles manufactured here in this country.

That is probably my strongest point. There are many Australian made vehicles that do not deserve to have this luxury car tax imposed but will nonetheless. There is also a significant disincentive for those facing the tax to opt out of important safety measures. Customers will opt out of important safety options such as electronic steering controls, extra airbags and other accessories simply because the vehicle got caught up in the luxury car tax.

Just as with RTDs, you said nothing about it at the last election. You went out and sampled the market with some cleverly timed leaks before the budget and then you jumped out to make what you term ‘luxury’ cars more expensive for your own working families. It is that sort of completely confused notion coming out of the government as to where you are heading, who you are taxing, what you are increasing expenditure on and how you are affecting the very people you are purporting to help. Confusion reigns.

The automotive sector inquiry was, I thought—apart from the people you put in charge of it—a perfectly reasonable situation, given that we have a very significant challenge in automotive manufacturing in this country. So the question is: why jump now into pushing taxes up on vehicles that are manufactured here? It raises serious concerns that you are not even prepared to respect the outcomes of your own reviews.

Whether or not you have a clue at all on tax policy is something that was very vague prior to the election. We were flat out finding superannuation policy from this government. We were flat out getting anything other than a carbon copy of the coalition’s tax policy. And now, of course, we have a Prime Minister trying to be caring on the one hand and an economic conservative on the other, but with no real ideological drive as to where he is trying to take the country.

Of course, these are just wasted months. These are opportunities that the government had to make clear, small but significant leadership decisions on legislation like this, and they have been passed up. I think there is a real sense coming out of the community when I speak to people living in my town who say, ‘I don’t really know what the Prime Minister is trying to do.’ We all saw the $30 million advertising campaign with the fair go ‘out the back door’, but what is he actually doing about it now that he has the opportunity? There is a Prime Minister here who is charging off in one direction, slapping on the taxes to make the budget balance, but at the same time trying to maintain static out of his media office that he is a responsible economic conservative looking after working Australians.

I can tell the government of the great fear in the community now, particularly from seniors, who find that after 10 years of economic success they are suddenly being told: ‘That was yesterday. You miss out on the dividend because we cannot make tough decisions anymore that would make sure that economic dividends reach seniors and pensioners.’ The government has completely abrogated its responsibility to seniors because the popularity polls told it to focus on this ‘working Australian’ term. That is the government’s choice. But to be bringing out the legislation that takes the government directly into the headlights of the families that were hoping things would be a little easier deserves to be exposed. Right now, the government is preaching competition but actually working against it with the Fuelwatch scheme. Those who are deciding whether to purchase a new car are confronted with the new luxury tax. On the one hand, Australians are saying, ‘Should we actually upgrade and buy a larger car?’ Large families in particular are making that very decision. But, on the other hand, households are facing the imposition of Fuelwatch. It is all symptomatic. It is all part of the general pattern that is emerging from this government, that Fuelwatch is being imposed nationwide like some sort of North Korean communist command and control scheme. It is good to see that the Assistant Treasurer is in the chamber today, because he is absolutely riveted to Fuelwatch. No matter what happens to this scheme, we know that he will be riveted to it and will potentially be going down with it.

We have heard today already the distortion of the ACCC report for the government’s own benefit, but let us just inject a bit of common sense. The average Australian family contemplating buying a larger Australian vehicle now knows that, under this government, it will be paying an increased tax of 33 per cent on luxury cars. That could be for an Australian made mass-produced vehicle that no-one would consider to be a luxury car. Of course, that is a small detail that can be simply glossed over by the government. Additionally, in my state of Queensland, I find the Fuelwatch system that is so fervently resisted both by automobile associations and by the Labor state government is about to be imposed. People with common sense would say, ‘The benefits would be that I know what the price of fuel will be tomorrow.’ The great concern is that this cheap fuel may no longer be an option because people will not be prepared to put sealed bids in for lowest prices. For those that do, they are unable to modify their choice through the day.

We have asked the simple question to the Assistant Treasurer: in what other sector would a system like Fuelwatch work? In what other sector do we elect to fix prices? In what other sector do we try and add rigidity to the market so that the competition actually cannot occur for 24 hours at a time? Of course, the great question that we cannot get an answer to is: what happens if a small independent petrol provider, having fixed their price, wishes to drop the fuel price through the day? Is this federal government going to set up the regulations by which that small operator would be punished and fined? There is no answer to that because all the government has done is to adopt FuelWatch, a scheme that came in in January 2001 in Western Australia. Since then, we have seen nothing more than high fuel prices. The analysis of whether it is FuelWatch that is responsible for the high fuel costs in WA or whether the introduction of Coles and Woolies, who appeared around 2003-04, had any impact in Perth is difficult to tease out. I think that, from a policy point of view, you would apply the precautionary principle. Where it could be much worse for working Australians while, on the other hand, there could probably be a slightly smaller cycle over a longer period, wouldn’t the precautionary principle dictate that the government might just hold fire on this genius Fuelwatch idea that its own state governments are opposing? Wouldn’t the precautionary principle dictate that the government might just do a little bit more research—and wasn’t that recommended in the ACCC report? No, that will not happen because we have a government in panic mode. Having exploited on the path to the Lodge that general perception that a new federal government could make things better for working families, you realise that, now you are in the headlights, you have to do something. The government wants it to look like something works. With almost religious fervour, government backbenchers have to march in behind the Fuelwatch scheme.

It is a tremendous allegory for what you are doing with the luxury car tax itself. It seemed popular. The luxury car tax has a great ring to it, but the government did not really think about the small print. It did not think about the quiet, unassuming families who need to buy a larger vehicle which happens to fall in that price range. The government did not even consider the minor but common-sense amendments that could have applied to ensure that we could purchase those vehicles without a 33 per cent tax. Haven’t things changed! Remember the old days under Labor when every budget involved more taxes. Of course, we have had 10 years under the coalition where, predominantly through saving and responsible economic management, budgets were a time of investing surpluses productively. Hasn’t that time come to an end! We had almost forgotten that budgets became a time when you said: ‘What’s going to happen to my alcohol? What’s going to happen to my smokes? What’s going to happen to the price of a family vehicle?’ They were the budgets of the 1980s. We would all sit around the television and wonder what was going to be taxed next. Hasn’t it come full circle? It did not take this government very long to fit straight back into that traditional Labor pattern. There may well have been a complete and utter loss of the legislative agenda this week, and one can always say: ‘It is a government with training wheels on. That is to be understood.’

The great shame is that, with further weeks left in this financial year, there is still an opportunity to consider this legislation appropriately in detail but it has been passed up. Secondly, the government is effectively forcing this legislation off to a Senate committee with the great risk that it cannot even get back to this chamber this financial year. That will have significant implications for a number of these Treasury bills. At some stage I think most Australians simply asked that you would make some tough decisions, that you would examine forensically some of this legislation and think about the impact upon the very families that you are purporting to help. Of course, for the less-discerning media, many of these announcements and in particular this legislation seemed fairly attractive. There seemed to be virtually no argument that one should support it. Only pre budget, when it appeared that Australian made vehicles would be caught up in this higher tax, did the government go into damage control. We have seen exactly the same thing with Fuelwatch: you are holding your ranks for a certain period of time before some piece of common sense leaks out of cabinet and undermines the government position. We have seen a silenced minister who had the courage at least to speak on behalf of working families who loved buying their fuel on ‘cheap Tuesday’. I am not about to say exactly what happens on cheap Tuesday with and without Fuelwatch, but I think most people looking at this legislation will say, ‘You cannot give us a guarantee that fuel prices will not go up under a system that locks in and fixes prices.’

We know what it is like to live in China. We know what happened in Russia. We have heard about what came out of the command and control economies. But what was never clear out of those economies was that you could have anything better than a complete free market, allowing competitors to price in an open and unregulated market. It is a lesson that is very, very tough to learn for those on the other side that profess to being economic conservatives.

My great fear is that the great losers in this are the metropolitan electorates with families and those who have to commute large distances, like my electorate of Bowman, where the average commute to the city is about 40 minutes in peak hour and 60 per cent of people leave home for work each day. They will be watching closely. They know the prices and they know the cycles, and we can see the response in the market, with large queues in my electorate buying on Tuesday nights and Wednesday mornings. We will be watching closely and my electorate will be looking at what happened in Western Australia. They will be looking at the prices in Western Australia, the 5c a litre more that it costs there. They know it is very hard to beat the competition. They also know the importance of the independents in the market and they know that when buying their vehicles they want to be absolutely certain they can buy an Australian vehicle without the imposition of this luxury car tax. (Time expired)

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