Tony Windsor (New England, Independent) Share this | Hansard source

I would like to speak to the Tax Laws Amendment (Luxury Car Tax) Bill 2008 and I will be moving an amendment in the consideration in detail stage. But before addressing this particular bill I would like to pick up on a couple of comments that were made by the member for Bowman and the member for Aston in relation to new taxes. They were making the point that it is many years since governments have introduced new taxes, and condemning the current government for doing so in terms of the luxury car tax. I would remind those two members—and this is related to this issue, particularly the cost of running cars—that it is only a few years ago that the former government endorsed a discriminatory approach in relation to the goods and services tax that country motorists pay as compared to their city cousins. I would remind those members that that was done by removing the Fuel Sales Grants Scheme that was put in place, at the time the GST was put in place, as a measure to compensate for the higher price at the bowser for country motorists as compared to their city cousins. In some cases, as those members would be well aware, that can be as high as 3c a litre. So there is a case to answer from the opposition as to what they actually did. I think that is one of the first discriminatory taxation issues that I have seen where country people, who do not have the options of public transport or smaller distances to travel, were severely disadvantaged by a change in policy. I do not see the current government rushing in to fix up that particular problem either, but the amendment that I will be introducing today follows on from that discrimination.

I am very pleased the Assistant Treasurer is here because he is a man who actually knows, from his former life, what country roads are like. I have had the privilege of sitting in a vehicle with him on some of those quite nasty country roads. He would be well aware that country people in many communities do not see a four-wheel-drive vehicle as being a luxury. In fact, in some circumstances, if country people bought vehicles that were below the $57,000 so-called luxury tax level they would be absolute fools, and the costs to their budgets would be enormous. So I urge the government and the Assistant Treasurer to have a good look at what message this is sending to those motorists who do not have the luxuries of sealed surfaces and paid toll roads to drive their vehicles on. But they do have kangaroos; they do have potholes; they do have wash-outs, water and mud. They have a whole range of activities for which they have to travel long distances and they have to carry their families in a vehicle that they think will be reasonably safe if an incident or an accident occurs. So I think that imposing a level of $57,000 as a threshold for luxury needs to be reviewed.

The fact that the government introduced this tax amendment in the budget and, within a few weeks, have of their own volition decided to have the initiative reviewed by Treasury in the tax review that is going to take place says to me that this has been too rushed and that some of the issues that have been articulated by some of the members, particularly those on the opposition side, are issues of real substance that deserve to be debated and heard. Otherwise, if it was a clear-cut and clearly thought through amendment to the luxury car tax act, why would it be referred off to something that is going to take about 18 months? Why would that be happening? That is something that only the government members can answer, but I think it is something that the public would like to know.

As I mentioned earlier, country people do not have the luxury of sealed surfaces. There is a reason for that, but in terms of the taxation that they pay for road use they are disproportionately hurt once again, because they do not have the option, the luxury, of using public transport so that it is the public transport that hits the kangaroo or the pothole or the wash-out or the mud. They do not have the luxury of using public transport because it does not exist. People in our major cities do have that luxury. They have the luxury of options. They may well determine that the option of a luxury vehicle is something that they will pay for, in which case they are probably quite willing to pay a luxury vehicle tax. But many country people do not have the luxury of that choice.

I would just like to spend a moment on what people pay and what they get back in the form of other tax. Motorists generally—and country people are part thereof—pay about $14 billion per year in fuel excise and they have something like $2.5 billion or $2.6 billion returned to the road system via expenditure from the federal government. Something like 83 or 84 per cent of what road users pay goes into other forms of expenditure rather than the maintenance or the development of roads. I think all governments should look at that very closely, particularly if this taxation review is going to be of any substance. Fuel taxation has to be there, as has the GST. Those particular issues have to be debated in terms of any major taxation reform that can take place. If we leave either of those out and say that we are comfortable with the revenue stream that is coming from those, it is really not a reform of anything or a review of any substance in terms of the tax act.

The amendment that I will move is quite simple. As I said, I would imagine that the Assistant Treasurer, having travelled on some of those roads, would be quite sympathetic—but we will see when it comes to the time for debate. The amendment that I will be moving in the consideration in detail stage is to include as an exemption a four-wheel drive vehicle that is registered in a rural area. In his speech the Treasurer said—it was not a lengthy speech, only a bit over a page:

Certain types of cars are exempt from the tax. This includes most commercial vehicles, most second hand cars, motor homes, campervans, and prescribed emergency vehicles. We are not changing these arrangements.

The Treasurer and the Assistant Treasurer would be well aware that many four-wheel drive vehicles cost more than $57,000. In fact, to be under $57,000 you have to be very much at the low range of the vehicles that are available. If the government is hell-bent on introducing this luxury car tax and if it will not exempt four-wheel drives—and as I said, they are not a luxury on country roads; they are a necessity and so this is a tax on a necessity of life in some of those circumstances—the very least it should be doing is looking at the threshold and raising it so that four-wheel drive vehicles are exempt from payment of the tax.

Personally, if someone wants to put in a whole range of add-ons to a vehicle and make it into a luxury vehicle, I would not disagree with them paying a bit more. It is obvious that they can afford a bit more if they are putting all the bits and pieces into a car that make it up to $100,000 with nice leather seats and all the knick-knacks that people can get in their vehicles. My vehicles are very basic vehicles and I am sure that even the most basic LandCruiser at the moment would be over $57,000. I am not the John Laws of the parliament, but a LandCruiser is a commonly-used vehicle in regional Australia. To have a basic LandCruiser suddenly being described as a luxury vehicle is quite offensive, I think, to those many people who have put their lives in the hands of those who designed that particular vehicle, and the same would apply to many other four-wheel drives—Nissan, Land Rover et cetera. So I would ask that the government, firstly, support the amendment. I am pleased to see the member for Kennedy here, because I hope the member for Kennedy might second my amendment. He is probably one of the most articulate defenders of country people in the parliament and I am very pleased to have his endorsement. I know that he is well aware of the circumstances of some of our country roads, as is the Assistant Treasurer.

There is another issue that I would like to briefly touch on. It is to do with the overarching fuel debate. I advise the Assistant Treasurer that I will not take long on this; I know there is some urgency in terms of some of the things that are being delivered. But in terms of the fuel debate and the carbon footprint and emissions debate that are also taking place at a parallel course within this place, there are a number of public policy issues that seem to me to be quite contradictory and really need to be addressed. One is the issue of biofuels. It has not been mentioned of late, but there is a lot of mention in this parliament of the cost of fuel to the nation and the impact that it may have in terms of inflation, whether we should be charging tax—GST or excise.

In this whole fuel debate very few people are looking at solutions. In fact, if the government comes in with an overarching carbon taxation arrangement or some sort of emissions trading system under which the very footprint of freight will be charged to someone in terms of the carbon burnt, what is that going to mean in relation to the cost of living within this nation? I do not know the answer to that, but I would urge the Assistant Treasurer to sit down and really think some of these things through. I will give him an example: currently we grow a lot of wheat in this country. We grow about 1.75 per cent of the world’s grain. Some people think it is a lot more than that, but it is not. Currently we export 80 per cent of that grain to feed the starving millions, and there is a moral debate paralleling all of this as well. If a carbon footprint is brought in, what is that going to mean for not only the exportation of the starch, which is carbon, but also the various transport movements, and who will pay?

If you are a Walgett wheat farmer, for instance, you will have a footprint in the paddock, another one getting it to the silo, another one getting it from the train to the port and then another one getting it from the port to the Middle East. At least in theory, some of that money will buy another ship to bring oil back from the Middle East, so it will have a carbon footprint of some nature coming back. It will then eventually get back to the Walgett wheat grower, who will presumably use that to go around in circles again to produce grain to sell to the starving millions to buy oil so he can drive his tractor. What is all that going to mean not only as to who pays for emissions but also for the cost of those transportation movements? And, if it is going to be of some cost, why have we not looked at the biofuel debate as a centralised way of cutting a number of corners? Why export grain to buy oil—two corrupt markets—with a carbon cost, theoretically, into the future?

If we are going to go offshore and buy the energy, why not convert grain to energy without a number of transportation movements and utilise that energy domestically? Why do we always have to enter this market that is governed by other forces? Why are we not starting to think about ways of circumventing the problem? There is an argument that energy prices will go up. Are there more efficient ways of producing energy at a lower cost than we have looked at in the past? There is an argument—a legitimate argument—that we should not use food for fuel. What does that mean for the future when we move into biomass as a provider of ethanol, where it is not a food product? It is actually fermented starch from a plant, a grass. It is a grass which may well have a much more positive carbon footprint than some of the existing systems that we are dealing with.

So I urge the Assistant Treasurer—and I am delighted to see the Treasurer is here now—to, in embracing these bigger issues, start to do some modelling as to what it all means. It is not as simple as this piece of legislation seems to be saying: ‘Oh, just whack a luxury tax on; it’ll be right. Let’s whack a carbon tax on; it’ll all be right.’ What are the issues that we are trying to solve? If carbon is a problem, we should be looking at ways of sequestering it, obviously, but not releasing it in the first place would be helpful. Are there things that we can do in terms of our existing and more natural systems, agriculture being one, that we should be looking at in a firm way within this place? Those issues are probably more important than this particular one we are dealing with today. I think it is important that, as a parliament, we start to debate these issues. Otherwise we will get into a knee-jerk reaction—as this bill is—at a very important time in the future.

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