Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Energy and Resources) Share this | Hansard source

Mr Deputy Speaker, I am seeking the call because the car industry in Australia is not only very close to my heart but also very close to the heart of anyone who believes in having a manufacturing sector in Australia. We have heard from the Prime Minister at various times how he never wants to see this nation not producing or not making anything. I must admit that, in his time as Prime Minister, he has not actually backed that rhetoric with actions. Instead he has introduced a tax, a tax which is so symptomatic of the problems of this government, that will in fact impact on the manufacturers of Australian cars—particularly manufacturers of Australian cars that have been the backbone of the automotive industry in this country for a very long time, for more than half a century in fact.

It is ironic that we come to this place from time to time to see the government take positive action, and they did take positive action in relation to the car plan—$8 billion is by any measure positive action. But in actual fact as part of that $8 billion they were giving back to General Motors Holden and to Ford Australia money that they were taking off them in the luxury car tax in the Tax Laws Amendment (Luxury Car Tax—Minor Amendments) Bill 2008. They were saying to them, ‘Our economic policy in the automotive and manufacturing area is so confused that in May we are going to put up the luxury car tax by over 30 per cent to 33 per cent.’ That is on top of the GST, so we have a government that is increasing an extra tax. So confused are they though that they come back to this place in November and say, ‘Well, we’ve got to give the industry $8 billion to remain afloat.’ I certainly applaud that. And now of course here we are today trying to amend what is basically a mess. It is a mess because it is policy made on the run and it is an example of the politics of envy that we so often see from those who sit on the other side of his House.

In the days when the Treasurer oft repeated claims that the inflation genie was out of the bottle, the luxury car tax grab was an attack—as the member for Lindsay so eloquently said on behalf of his party, a tax grab against ‘conspicuous consumption’. Those on that side have decided that it is all right to buy a Cartier watch or whatever takes your fancy, but that it is not all right to buy a luxury car. If your family has more than five children, do not buy a car that is bigger than a sedan—a people mover or, more likely, a four-wheel drive; do not buy one of them because that is conspicuous consumption. They are saying, ‘We have a party here who are railing against conspicuous consumption, who want to attack those families who need a vehicle that costs more than $57,000. Instead of saying, ‘We understand that necessity,’ they say, ‘We’re going to brand you as conspicuous consumers.’ What a deplorable thing to say.

To add to that, they are also saying they are quite happy to tax those people who live in rural and regional Australia where a four-wheel drive is anything but a luxury and anything but conspicuous consumption—it is an absolute necessity. It is an absolute necessity for those wonderful occasions when the heavens open, the rains fall and the roads become boggy, but it is also an absolute necessity at those other times when the roughness of the roads, the ruts and the debris that sometimes falls on those roads mean that if you want your wife and children to travel in safety and in the surety that they will arrive at their destination then you are going to buy a four-wheel drive vehicle.

Of course, you also have small business people who buy four-wheel drive and so-called luxury vehicles as a means to conduct their business. We have seen a debate in this House about how important it is to ensure those businesses continue. This is a government that stand up at the dispatch box and say: ‘We are on businesses’ side. We want to encourage people to invest. We want to make sure the economy keeps going.’ But then at the first opportunity they introduce an even bigger tax on some of those small businesses.

The vehicles in this price range are not the Ferraris, the Maseratis and the Porsches that we see the Prime Minister so deceptively refer to any time anyone dares to query this tax grab. These vehicles in this sector are predominately four-wheel drive vehicles. They are predominately vehicles that you and I and other members of his House see regularly in our electorates. These are vehicles which, as I say, are used for business; they are vehicles which are used by larger families; they are vehicles which are used by those people who need these sorts of vehicles to allow them to communicate and transport themselves and their families in a way that you and I perhaps take for granted. When we see taxes like this targeted against conspicuous consumption, against what the Labor Party see as a luxury, it underlines the fact that they have begun in government their war on aspiration. They have wanted for a long time to be in government, and having attained that position their first attack is on that fundamental quality that has made Australians great—that is, aspiration.

When we were in government we wanted to encourage a culture of aspiration, and as the previous government we encouraged it. We wanted everyone to increase their feeling of wellbeing. That is why under our government we saw real wages increase by 20 per cent after inflation. That stands in very stark contrast to what we saw from the previous government when real wages actually fell. Having increased real wages, our government set about lowering taxes with tax reform never before seen in Australia with the introduction of the new tax system—with reforms that Paul Keating when he was Prime Minister never had the courage to implement. Though we know there were times when the Labor Party under the prime ministership of Bob Hawke wished they had the courage, in the end they did not. And so we are now seeing the Labor government attack an area where they see they can do so without political retribution, because in the end there is no economic strategy to what they are doing. They are in fact a government devoid of strategy when it comes to the economy.

As I said in my opening comments, this legislation is symptomatic of a government with no strategy for the economy, at a time when we desperately need to see strategy and when we desperately need to see a government that is surefooted when it comes to dealing with the global financial crisis. We actually have a government who have no strategy and no idea of how to deal with it and who are continually making mistakes that they are not prepared to correct because they do not want to admit they have made mistakes. They do not want to admit that they made a mistake on the deposit guarantee. They do not want to admit they made a mistake on the wholesale lending guarantee. So in the global financial crisis, which we know the rest of the world is experiencing, instead of Australia being in a strong position to deal with it thanks to the previous government, who lowered taxes, got rid of government debt and raised surpluses, this government introduced $20 billion worth of new taxes and we have gone from having a GFC to having a KFC. Through a whole series of mistakes—and this legislation is part of it—they have actually exacerbated the impact of the global financial crisis here in Australia.

At a time when the government should be instilling confidence in Australians in the economy, we have seen a confused message that has ebbed and flowed across the page depending on what this week’s research is turning up as to whether or not the inflation genie is out of the bottle or whether we have to prepare ourselves for a deficit in the budget. ‘Deficit’ is a word that they did not dare speak three or four days ago, but they are now saying that we are heading into a deficit. It highlights that, despite the fact that the now Prime Minister said when he was in opposition that he was a fiscal conservative, he is now surrendering all fiscal discipline. Tax grabs, like the luxury car tax, whenever he can apply them, combined with poorly designed legislation right across the board, is how he is managing the current financial crisis. Every day, instead of talking up the economy, we have a government that are talking us into recession and deficit. Increasing the taxes on consumer goods such as motor vehicles only adds to the uncertainty and the fact that consumers are now not sure what they should be doing.

As part of that overall process and the overall lack of understanding of how to run an economy, we are seeing mistakes in the legislation coming forward continually. This particular legislation on luxury car tax has been hastily thrown together and it is an extraordinarily ineffective piece of legislation. The coalition has always recognised the blatant flaws in this legislation, but the Labor Party has pressed ahead with it anyway. As the law currently stands less than half of Australia’s farmers and tourism operators are eligible for the luxury car tax surcharge exemptions, which the Labor Party trumpeted after it realised it had made a monumental mistake with this legislation. Only half of those who are affected by this have been able to access the exemption under the legislation as it was carried—only half, not because of conspicuous consumption, which the Labor Party wants to go to war on, or for buying a luxury good but because of buying something that is essential to their daily lives or businesses. Hence, we have a need for these so-called minor amendments. Of course, we support these amendments because they provide for those people who understand the necessities of life. People who need a four-wheel-drive vehicle or a larger vehicle—a vehicle worth more than $57,000—should be able to access them without an increase in the luxury car to 33 per cent tax.

These mistakes are the direct consequence of Labor arrogantly pushing through—did we just have a glitch in the audio then?

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