Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Hansard source

Indeed. I wonder what Brian Burke drives. The amendment regarding the backdating was supported in the Senate, so I need not make any further comment on that. The indexation to CPI amendment is a most confusing and irrational amendment. It seeks to index the luxury car tax threshold to the CPI, not to the CPI motor vehicle subset, but not for another four years. If the policy is good, why not do it now? If a policy is worth doing, why is it not worth doing now? The government had no answer in the Senate. I invite my colleague opposite to tell the people of Australia why the government will not agree to index the luxury car tax threshold to the CPI now.

The fourth amendment relates to primary producers and tourism operators and was introduced by Senator Fielding. This is one of the most complicated and confusing exemptions that I have seen in tax policy, and that is saying something. It adds to the complexity and adds to the red tape. There will be arbitrary results that will be grossly unfair to people across Australia. Let me give you an example. If you own a farm and drive a four-wheel drive, you can get an exemption on the basis that you are a primary producer. (Extension of time granted) But if you are working as a fencing contractor, an irrigation contractor, a vet surgeon, a subcontractor or a tradie and you turn up to that same farm in an identical four-wheel drive, you will get slugged with the eight per cent additional tax. How is that fair? The primary producer who owns the farm gets a tax exemption but the worker on the farm gets slugged with the additional tax.

It is also entirely inconsistent with the first amendment relating to fuel efficiency, which was introduced by the Greens. The cars that will be exempted under the primary producer and tourism operator exemption are Toyota LandCruisers and vehicles of that type. People should appreciate that Toyota LandCruisers use fuel at double the threshold of the exemption introduced for fuel-efficient cars in the first amendment. On the one hand the government are supporting small European sedans for their apparent fuel efficiency and exempting them from the luxury car tax and, on the other hand, they are exempting, under the primary producers and tourism operators amendment, Toyota LandCruisers, which use fuel at double the threshold of the exemption. It is totally inconsistent. That underscores the dangers of policy on the run.

What we have had presented to us is a complex, complicated and unworkable mess. The bill should never have been introduced into this House. The luxury car tax increases were not revealed to the Australian public before the election. And yet, without notice and without consultation, the government introduces a bill to increase a luxury car tax that exempts European sports cars and the Toyota LandCruisers, driven by farm owners but not farm workers.

If the government wanted to increase taxes on luxury cars—and it has not ruled out increasing taxes on other luxury goods—why wasn’t the luxury car tax referred to the Ken Henry review into the taxation system? It makes a mockery of the government’s intentions of reforming the tax system. It will undermine the efficacy of the Henry review if this tax is just inserted into the system in an ad hoc fashion prior to the deliberations of the Henry review. How is it that the government can impose a tax without consultation—without sending it to its own tax review—yet cannot increase the single age pension by $30 without sending that off to a review that has to report next year and is going to feed into the Henry review? How is it that the government cannot increase the pension by $30 a week until it has sent it to a review that feeds into another review that will not report until the end of 2009, yet was able to get legislation ready and make a decision overnight to introduce an addition to the luxury car tax? 

The fact is that this legislation is a travesty, and the government should be condemned for it. They are making pensioners wait months and months and possibly years for the outcome of a review, yet their own Ken Henry review into the taxation system will not look into the luxury car tax. On the basis of the fundamental flaws in this legislation, the coalition will oppose the amendments.

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