Elizabeth Watson-Brown (Ryan, Australian Greens) Share this | Hansard source

I rise to speak in support of the Treasury Laws Amendment (Tax Incentives and Integrity) Bill 2024. The Greens are supporting this bill, as it does two important things. Firstly, Schedule 1 of the bill lowers the fuel efficiency requirements for cars to be eligible for a higher luxury car tax threshold so that only EVs and plug-in hybrids are eligible for the more generous LCT threshold.

In 2008, the Greens and Labor negotiated the higher vehicle efficiency threshold as a design element within the luxury car tax in order to send a price signal to consumers choosing between higher and lower emitting vehicles. That standard was set at seven litres per 100 kays, but, given the natural technological improvements and emissions standards in major global car markets that oblige increasingly efficient vehicles, the current standard has been eroded over time and needs realigning now. The change proposed in this bill will remove internal combustion vehicles and their hybrids from the more generous threshold and refresh the intent of the original 2008 agreement.

Secondly, schedule 2 of the bill will deny deductions on interest payments from ATO debts and, as a result, will correct a deeply regressive element of our income tax system whereby the Australian public effectively subsidises high income earners' debt repayments to the tax office. Currently, people with incomes over $190,000 who have an ATO debt are able to deduct 45c in every dollar paid back on a debt, while a worker earning $45,000 a year can only receive a 16c discount on every dollar of interest paid to the ATO. Someone with a tax debt earning below $18,200 would have to pay the full amount back with no tax deductibility.

The current system is deeply regressive. The current system is open to manipulation by financially literate high-income earners, who can intentionally run up a debt to cover other life costs knowing the Australian public will pick up almost half their tab—almost half of their interest charges. These two changes make the rest of the bill worth supporting because these are not measures that any coalition government, with their affection for higher pollution and economic inequality, would ever pursue.

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