Shayne Neumann (Blair, Australian Labor Party) Share this | Hansard source

After listening to the member for Wide Bay, I wondered what sort of response he would have if there were a bill which he fully supported. He would be almost orgasmic in his support, because the response we had here from the member for Wide Bay was quite extraordinary. It really is a bit rich for the National Party, or the Liberal-National Party—whatever they call themselves in Queensland today—to criticise us for a lack of commitment to rural and regional Australia. For the authors and architects of the Regional Partnerships rorts to say that somehow the luxury car tax is all our responsibility and something that we have imposed is to not look at or consider history, because in 1979 the Fraser coalition government imposed a form of additional tax on luxury cars.

The coalition government did that in 1979 and the luxury car tax was first introduced in the form it is currently in on 1 July 2000. We were not sitting here on this side of the House on 1 July 2000. If you look at history, it was the Howard coalition government which introduced the luxury car tax. But when you listen to the member for Wide Bay, it is almost like he has political amnesia on that point. The luxury car tax was first introduced when the GST was introduced, and for members of those parties opposite to lecture us about imposing tax is a bit rich when you consider it was they who imposed the GST upon the people of Australia with almost no compensation.

In addition to that, one would think when you listen to those opposite that in fact there are different tax rates for those who live in rural and regional areas and those who live in the cities. We heard the member for Mackellar talk about the Constitution today. I would suggest that those opposite have a look at the Constitution, because it talks about the fact that you cannot do these sorts of things. We on both sides of the House, conservative parties in different forms and the Labor Party in its current form, have been here since Federation. You would think that those opposite would have some sort of collective memory in relation to this but, no, they have not.

The member for Fadden said last night that our luxury car tax was rushed. It is the case that the Treasurer announced on 13 May this year, in the budget speech, that we would bring fairness and integrity to this area. That is when it was first announced that we would increase this tax from 25 per cent to 33 per cent. I can hardly say that is rushed in the circumstances.

The luxury car tax currently applies at a rate of 25 per cent for every dollar over the luxury car tax threshold. The rate of increase we are talking about here is to 33 per cent, with effect from 1 July 2008. The current luxury car tax threshold is $57,123. The threshold is indexed annually and there is a definition of luxury cars in section 25-1 of the act, and that excludes certain vehicles. If you listened to the member for Wide Bay talk, you would think that we had some intention of punishing low- and middle-income earners who buy cars to take their kids to school and get themselves to work and that we had some sort of pernicious attitude towards those who live in rural and regional areas. That is the attitude you would get from those opposite. Then at the end he said he supported the tax legislation before the House, the Tax Laws Amendment (Luxury Car Tax—Minor Amendments) Bill 2008. It is quite extraordinary.

Section 25-1 of the act excludes certain vehicles, including prescribed emergency vehicles, motor homes, campervans and commercial vehicles and, provided they are not GST free, vehicles that are specifically fitted out for transporting disabled people seated in wheelchairs. The exemptions to the luxury car tax in the legislation remain unchanged, and that is a fact. It is the case that both sides of politics have supported the luxury car tax, and it will apply in this bill to both domestically produced and imported vehicles.

The measure that the Treasurer announced in May is expected to raise about $555 million over four years. The actual tax change will result, as he said in his press release of 13 May 2008, in a car with a current price of $100,000, inclusive of goods and services tax and the luxury car tax, being subject to an additional $2,541 in luxury car tax. 2007 was a pretty good year for the car industry in Australia. There was a new record for the industry: for the first time, more than a million sales were achieved. It is the case that locally produced vehicles accounted for over 19 per cent of the total vehicle sales in 2007.

The member for Wide Bay should have particular regard to the second reading speech of the Treasurer, where he pointed out some facts which are directly at odds with so much of what the member for Wide Bay said. I will go through the speech because I think the member for Wide Bay needs to listen closely. The Treasurer, in this second reading speech, said:

It is estimated that around 10 per cent or around 100,000 of all new car sales made in Australia in 2007 were subject to luxury car tax. … Of the top 20 selling cars in 2007, which covers more than 50 per cent of the car market, less than four per cent of those sold are subject to luxury car tax. At the lower end, the increase is in the hundreds, not thousands, of dollars. The increase in the luxury car tax for the lowest cost Toyota Prado models are $39 and $98. For the Ford Territory Ghia, the increase is $496.

And there was mention of Toyota Taragos in the speech. The Treasurer correctly points out:

Of the five Toyota Tarago models, only one attracts the luxury car tax. Of the three largest selling people mover brands, this is the only model that will be impacted by the tax increase.

The explanatory memorandum concerning this bill says that around 105,000 new luxury cars are sold each year. Luxury cars which cost $100,000 or more are currently taxed at about $8,000 and under the new tax increase they will be taxed at about $10,500. As I said, the luxury car tax only applies to the portion of the motor vehicle cost above the $57,123 threshold.

The coalition have opposed so much of our budget measures, as I have said in this House before, that you would think they had the same mentality as the opposition in 1974 or 1975. They opposed our tax on ready-to-drink alcoholic beverages, the new excise on condensate, changes to the Medicare levy surcharge threshold and others. The truth is that those opposite wish that they were over on this side of the House. They almost have the attitude that the Australian people were really in some sort of stupor on 24 November last year when they voted for us to occupy the benches over here. The truth is that those opposite are yet to come to grips with the fact that they are in opposition. That is the reality.

The government have brought this legislation to the House. We have listened to what Senator Fielding and Senator Xenophon have to say and we have agreed to their amendments. Under what I describe as the Fielding amendment, there will be a refund of the increase in the luxury car tax to primary producers and eligible tourism operators purchasing eligible four-wheel drive and all-wheel drive vehicles. The cap for the refund will be $3,000 for one vehicle per year for primary producers and $3,000 per vehicle for eligible tourism operators. Under what I describe as the Xenophon amendment, there will be provision that vehicles purchased under a contract entered into before 7.30 pm on 13 May 2008 but delivered after 1 July 2008 will have the 25 per cent luxury car tax. It is a fact that when people buy cars they often arrange for finance subsequently. It is a fact of life.

We have listened to what the good senators have had to say and we have worked with them. We have adopted their amendments to ensure that our luxury car tax increase becomes law. Lest anyone says that we have abandoned the car industry, we have announced a $6.2 billion plan to make the car industry in this country more economically viable and environmentally sustainable by 2020. It is the Rudd Labor government that have done that, and it has been done in the context of ensuring that the tariffs in the area are reduced to five per cent.

Like many in this House, I strongly believe that free trade is the way to go in terms of relations between countries. As much as possible we need to ensure that our very competitive car industry, primary producers and those in the manufacturing industry get a fair deal when it comes to selling their produce overseas. We are part of a global community when it comes to the car industry and so many other industries. We will continue to pursue a free trade agenda because that is where the future lies in terms of innovation and global integration.

The Hansonite or McEwen type of protectionism solution is not the way to go. Quotas and high tariffs only result in the Australian economy suffering. In these circumstances I support this legislation. It will mean, through the extra $555 million, that the people in my area will receive the kinds of assistance that they need from government. If those opposite want to keep knocking down our tax measures one wonders how they expect us to pay for schools, roads, hospitals and the like. I say to those opposite that they need to look back and think about the lessons of history before they come into this House and start criticising us for taxes they initially imposed themselves. They need to come to grips with the fact, after 12 months, that they sit opposite. They have to recognise that fact. They are trying to bury Work Choices as quickly as they possibly can, but the truth of this matter is that they sit opposite because of Work Choices and they need to support the government’s agenda.

The luxury car tax is part of the government’s response, in terms of budget, which will have a huge impact in my electorate of Blair and a huge impact in terms of the viability of the Australian government’s finances, and that will have a big impact on the economy as we roll out our Economic Security Strategy. People in the 43,792 households in my electorate who receive money in the next few weeks will benefit by virtue of the federal government’s responsibility and action. I commend the bill to the House. I think it is a good tax for our economy and a good tax for the integrity and fairness of the Australian taxation system. I support the Treasurer in his endeavours to ensure that the luxury car tax legislation gets through this House.

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