Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

The Tax Laws Amendment (Luxury Car Tax—Minor Amendments) Bill 2008 is necessary to correct some serious errors brought about by Labor’s rushed deal with the minor parties in the Senate on their legislation to increase the luxury car tax from 25 per cent to 33 per cent. It turns out that this bill is necessary because now, in the cold light of day, it has become clear that the amendments agreed to in the Senate were unworkable and it is necessary to make these corrections to this bill now so that those exemptions that were negotiated and passed through the Senate can actually take effect. Specifically, it will clarify that a purchaser of a luxury car is considered the purchaser for the purposes of the luxury car tax even if the car is purchased through a finance company or through a lease. In a similar way, it will clarify that, even if a car was ordered before budget night and the financing arrangement for the car was made after 1 July this year, the tax will not apply. Finally, it will confirm that those eligible for refunds under these provisions will be paid them directly.

Without these corrections, around 60 per cent of those eligible for exemptions in the deal struck in the Senate would not actually have got them—that is, without these amendments, which are necessary to fix serious errors brought about by Labor’s rushed deal, someone purchasing a car that was meant to be exempt would not have been exempt if it were purchased through a lease company or if it had been ordered before budget night but paid for after 1 July. This is illustrative of what happens when Labor cobbles together a series of amendments in the Senate. What we have is that, for 60 per cent of farmers and tourism operators who were promised some exemptions, these would not have applied and would not be possible without these amendments in this bill that is before us now.

The only reason the government have become aware of the necessity for these corrective amendments is that they were advised by the car industry some time after their first legislation went through. Indeed, Treasury officials at the recent estimates hearings said that the government first knew of the problem with their amendments when it was brought to their attention by the car industry. The luxury car tax amendments which were passed are contradictory in so many ways. They mean that now, under the new arrangements, there will be a tax break for an imported BMW 3 Series but there will be a luxury car tax on top-of-the-range Holden Commodores. There will be a total exemption for the Jaguar X-Type from the luxury car tax but there will be a luxury car tax on the top-end Ford Falcon, with an extra $1,000 in tax.

We have made our position on the increase in the luxury car tax clear through debate this year. We made the point that there already was a luxury car tax of 25 per cent. For the government to cobble together these amendments, which were so ill considered that nearly 60 per cent of those they were seeking to exempt actually would not have been exempt, in the first place is very illustrative of their incompetence in this regard. Naturally, because we are correcting their failure, we will not oppose this bill. This bill will give exemptions where they were first intended some weeks ago, but it is a very good example of how this government make policy in so many areas. This is a sham of their own making. This amendment bill is necessary to fix their mess, and because it will give effect to some exemptions we will not be opposing it.

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