Tony Smith (Casey, Liberal Party, Shadow Assistant Treasurer) Share this | Link to 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.

David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

I rise in support of the Tax Laws Amendment (Luxury Car Tax—Minor Amendments) Bill 2008 and wish to make a few observations in relation to these minor technical amendments. They are, of course, technical amendments of a minor nature, given that they are designed to correct some drafting difficulties that emerged with the amendments that had been moved in the Senate in relation to the government’s proposed increase in the luxury car tax, which formed a central part of the budget back in May. I note that as a result of negotiations that occurred in the Senate—in particular in relation to proposals that were put forward by Senator Fielding—the amendments that were ultimately carried sought to ensure that primary producers and tourism operators would be shielded from the increase in the luxury car tax by being allowed to claim it back from the Australian Taxation Office as a rebate after purchasing their vehicles.

Clearly the intention of those amendments was to ensure that farmers and tourist operators acquiring vehicles that would otherwise be subject to the luxury car tax increase would be protected from those increases regardless of whether or not the vehicle itself had been purchased specifically by the end user, whether it be the farmer or the tourist operator. The way in which the amendments were drafted did not adequately take into account leasing arrangements, and I understand that right across the farming sector and the tourist industry it is not uncommon for lease-type arrangements to be in existence. Indeed, I have seen some figures to suggest that they could involve anywhere up to 60 per cent of the particular users of those vehicles within these two sectors. Clearly this was a situation that was not satisfactory. Given the legislative intent of the earlier amendments, something had to be done, and the government, in consultation with Treasury, the Australian Taxation Office and, indeed, with industry, has sought to bring these minor technical amendments before the House as quickly as possible in order to remedy this situation.

I note the member for Casey had indicated that this matter emerged as a result of industry concerns. That was certainly confirmed by Deputy Commissioner Konza of the Australia Taxation Office at the Senate estimates hearing held earlier this year. Certainly, the government has sought to act as quickly as possible to accept that that position needed to be rectified and to bring this amendment before the House. At the time these details emerged, I note the Chief Executive Officer of the National Farmers Federation, Ben Fargher, said:

We do not need any taxes on business inputs, and if the intent of the policy is to exclude farmers, then they need to have another look at it.

Indeed, the government has had another look at this and that has led to the bringing of these amendments before the House.

In relation to the specifics of the bill, there are amendments to the Taxation Administration Act 1953, A New Tax System (Luxury Car Tax) Act 1999 and, of course, the Tax Laws Amendment (Luxury Car Tax) Act 2008. In relation to the amendments to A New Tax System (Luxury Car Tax) Act 1999 subsection 18.5(2)(a), the bill proposes to insert after ‘refund-eligible car’ the following:

… you have borne luxury car tax on the supply or importation if you had acquired the car directly rather than entering into a financing arrangement relating to the car.

Clearly, the effect of these amendments moved by the Senate earlier this year is to put beyond a shadow of a doubt that the benefit of those refunds will be passed on to the end user of the vehicle, whether it be a farmer or a tourist operator. By inserting that particular provision, we will be achieving absolute clarity in relation to that particular proposal.

Clause 13 of the bill relates to the bill’s application and states:

The amendments made by this Schedule do not apply where:

(a) the contract to make the taxable supply or taxable importation of the luxury car was entered into before 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 2008;—

which, of course, was the time of the budget announcement—

or (b) the contract to make the taxable supply or taxable importation of the luxury car was entered into before that time and, after that time, a contract to finance the making of the supply is entered into.

Clearly, the benefit of these provisions would not flow on in cases where arrangements may have been entered into after the event.

Before I conclude on this matter, I will make a few general observations in relation to the luxury car tax. I note that those on the other side have been a little bit free with the truth when it comes to the facts on this matter. One of the issues that they have certainly not sought to highlight or publicise in any way is the fact that the very first tax on luxury cars—though it was not called a luxury car tax back then—was introduced during the Fraser government. So the suggestion that it has always been the Labor Party bringing forward proposals to tax luxury cars does not stand up to any rigorous analysis.

I also note that the luxury car tax in its current form found its way into legislation with the introduction of A New Tax system in 2000—and I note the presence of the member for Higgins in the chamber at the moment. So, far from being a new tax, this is an amendment to an existing tax. Indeed, it was first introduced by the Fraser government and its more recent manifestation was a tax that was introduced by the Howard government under the stewardship of the then Treasurer, the member for Higgins.

I will conclude by saying that I think that the various investigations, reports and the Senate committee inquiries have gone a long way towards dispelling some of the myths in relation to larger vehicles. One of the suggestions in relation to the luxury car tax was that it would be a tax on large families. I remember stating the position very clearly when the substantive bill was before the House that I did not believe that to be the case. The evidence brought before the Senate Standing Committee on Economics certainly held that to be the case. Having now achieved passage of that bill through this particular amendment, we will achieve clarity and ensure that the intention of the Senate and indeed this parliament that the benefit of the refund will be passed on to the end user, whether it be tourist operators or primary producers. I commend the bill to the House.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

Who would have thought that I would be standing here for the second time in two days asking the question: why are we always required to fix Labor mistakes? Yesterday I was speaking on the wholesale banking guarantee bill after we had been calling for a month for this government to simply pass legislation. The banks were calling for it; the financial world was calling for a turn; we were calling for it. But, oh no, our nervous little Treasurer would not have a bar of it—until finally he relented. And here we are now for a second day fixing a Labor mistake. Today’s introduction of the so-called ‘minor amendments’ to the Rudd Labor government’s ill-conceived luxury car tax surcharge is a humiliating demonstration of Labor’s incompetence, and I certainly share the views of the shadow industry minister, Senator Eric Abetz. The government should be embarrassed, and I know it is. The Tax Laws Amendment (Luxury Car Tax—Minor Amendments) Bill 2008 has to amend A New Tax System (Luxury Car Tax) Act 1999, the Taxation Administration Act 1953 and, more importantly, the Tax Laws Amendment (Luxury Car Tax) Act 2008 that was passed a few short months ago. The amending legislation needs to be passed to correct serious errors brought about because of Labor’s rushed deal with the minor parties in the Senate.

The question that needs to be asked, and the Australian people need to hear the answer to this, is: why are we again correcting rushed legislation by the government? They rushed the bank guarantee which caused dislocation in the market and 270,000 Australian accounts to be frozen. The Treasurer rushed in to say that for anything over $1 million in the guarantee there would be a compulsory deposit tax, only to back down two days later. They rushed into their view on short selling, especially naked short selling—three views in three days that affected the stock market as they sought to amend it. They rushed into their view on the wholesale tax, saying they did not need legislation to cover their wholesale tax guarantee, and then they passed it yesterday. And now for at least the fifth time Labor rushed again and—surprise, surprise—they have stuffed it up.

The bill before the House will ensure that the relevant legislation actually allows for the refunds—imagine that—and/or exemptions as promised by the Labor government: namely, for primary producers who purchase four-wheel drives, eligible tourism operators and those who ordered a luxury car before the budget. It includes minor amendments to the ill-considered luxury car tax surcharge. It also includes cobbled together amendments to their punitive 33 per cent increase in the luxury car tax. Less than half of Australia’s farmers and tourism operators are currently eligible for the luxury car tax surcharge exemptions. Sixty per cent of the farmers and tourism operators Labor claimed would be eligible for a rebate on the tax increase are not eligible. Of all the things to get wrong! While Labor and, of course, Senator Fielding told farmers and tourism operators they would quarantine them from the luxury car tax increase, the fact is the law, as passed, categorically failed to do what Labor said it would do.

According to Treasury officials at the recent Senate estimates, the first the government knew of the problem with its amendments was when it was brought to their attention by the car industry. Labor should have done the basics—and it is not as though Labor do not have an entire Public Service to assist them, as well as their wealth and variety of advisers. If they had just done the basics and consulted, heaven forbid, with the Australian Taxation Office about the workability of the amendments, this new bill would not be necessary.

This is one of the first bits of legislation of their own. So much of the legislation that has come through this year has been piggybacking on the Howard years. It was legislation that was in abeyance after parliament was prorogued, and they then changed it and pushed it through. Here we have one of the first bits of legislation that was all done by their little selves—and what did they do in the sandpit? Dug the dozer into a hole and completely stuffed it up. Why? Because they rushed. If it is rushed there will be errors. I have already outlined so many areas where the Labor government have rushed things. And because they rushed the luxury car tax legislation, the anecdotal evidence from my electorate is that luxury car sales are collapsing by as much as 20 per cent. The MYEFO predictions will not be reached.

What is worse is that these amendments will benefit 25 imported vehicles that compete against Australian vehicles. These 25 imported vehicles are exempt from a range of taxes that Australian vehicles are not exempt from. Australian manufacturers and Australian workers that this government has the hide, the audacity, the blatant effrontery to say it represents, have been sold out by the tax breaks being provided to 25 imported cars but not to Australian cars.

The coalition said a number of times that trying to ‘improve’ the bill by trying to exempt various parties was not workable. We have been proven correct. The only way to ensure fairness is either to drop the tax increase altogether or, alternatively, adopt the coalition’s compromise position of setting the threshold for the 33 per cent tax increase at $90,000. I know Labor, and when I look across at the member for Blair, who will probably follow me in this debate, and the member for Oxley, who will not—

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

Yes.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

The member for Oxley will? I know the member for Oxley and I commend him for his work on the Joint Committee on Corporations and Financial Services, on the inquiry on short selling and on the inquiry in June into shareholder participation. But unfortunately I cannot commend you now because you will try to claim that somehow these errors are not your fault. I know you, Member for Blair and Member for Oxley: you will try to claim that someone else is to blame for this. Perhaps, could it be, the global financial crisis is to blame for your ineptitude in making these mistakes? You will claim that all you did was to vote for Senator Fielding’s amendments. We voted against the amendments because we knew they were flawed, but you rushed the bill.

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

I remind the honourable member to address his remarks through the chair.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. The Labor Party rushed the bill, and when you rush a bill you wear the consequences. While the amendments may have been in Senator Fielding’s name, they are the government’s amendments.

The opposition remains opposed to the luxury car tax surcharge. It is still bad policy. At a time of global uncertainty—indeed, at a time of global financial crisis—when other governments are ensuring that interest rates are lowered, taxation is lowered and government spending is increased, this bill is about increasing taxation. At a time when a greater fluidity of finance is needed in the system and at a time when a $10.5 billion stimulus package is being put into the community to encourage consumption—that is, spending—this is a bill that rips money out of pockets. We could be the only government on the planet that is increasing taxation and pulling money out of pockets when the rest of the world is stimulating economies through consumption. The coalition will carefully examine whether Labor’s second attempt at these amendments is any more effective. The government is surely on notice on this.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

It is a pleasure to be speaking on the Tax Laws Amendment (Luxury Car Tax—Minor Amendments) Bill 2008. It is good to be following the member for Fadden, as he made a number of comments about the role that the government have played in these bills, about what has happened in the Senate in terms of the opposition’s opposition and their attempted blocking of the measures that we are putting in place, and about the non-government senators and their amendments—and because his comments just point very clearly to the opposition’s view of themselves in this place. The opposition are not here to try and make some good outcomes out of certain policy areas; they are here just to obstruct. They are here to ensure that the government have difficulty, because of the numbers in the Senate, in passing their amendments. But the opposition will not have it all their way, because the reality is that in the Senate there are a number not only of Independents but of independent thinkers who actually see some benefit in the policies that we put forward—in particular in relation to the luxury car tax. I will get to a number of other points that were raised by opposition members.

This bill makes a number of minor and technical amendments to the A New Tax System (Luxury Car Tax) Act 1999, the Taxation Administration Act 1953 and the Tax Laws Amendment (Luxury Car Tax) Act 2008 to ensure that amendments to the tax laws amendment act passed earlier this year operate as intended. That is the clear purpose of the bill that is before us today. These amendments will clarify the operation of the law to ensure that the amendments moved by non-government senators operate as intended. This bill is to deal with those changes and those amendments that came through the Senate. Unlike what we just heard from the previous speaker and from other speakers on the opposition side, this amendment bill is about making sure that the consequences and the purposes of this bill carry through the intended amendments of the Independent senators—in particular, Senator Fielding’s amendment, which provides for a refund of the increase in the luxury car tax to primary producers and eligible tourism operators who purchase eligible four-wheel-drive and all-wheel-drive vehicles, and Senator Xenophon’s amendment, which provides for vehicles purchased under a contract entered into before 7.30 pm on 13 May 2008 and delivered after 1 July 2008 to be subject to the 25 per cent luxury car tax rate. I can well see and understand the intentions of those two Independent senators in moving those amendments to this bill.

Firstly, these amendments will ensure that the luxury car tax refunds are payable to eligible businesses where the businesses actually bear the cost of the luxury car tax regardless of the arrangements used to finance the vehicle. I think that is an important part of recognising that the way a vehicle is purchased may vary depending on the circumstances, the structure of the business, how a specific individual enters into a finance contract or how they purchase a vehicle. Therefore we need to recognise that through these amendments and make sure that that is taken into account and that the proper mechanisms are in place to deal with it.

Secondly, these amendments ensure that contracts that were entered into before 7.30 pm on 13 May 2008 are the relevant contracts for determining the luxury car tax rate of 25 per cent, when subsequent financing arrangements are made. This is to ensure that, despite the passing of time, at a particular point the 25 per cent luxury car tax still applies to those contracts. What often happens is that arrangements are made at a specific time but the financing arrangements may not be approved at the same time, and therefore you have to have some other period between when a contract may be signed and when the actual financing arrangements are carried through, made or agreed.

Further, these amendments ensure that the luxury car tax refunds are paid directly to claimants. I think it is important, in the way that this scheme operates, that the claim goes directly to the claimants—those who are actually putting forward their money in the purchase of those vehicles—and that it does not go through some other system. Therefore what these amendments clarify is that farmers and tourism operators—those people are at the core of the principle behind this—will be able to receive refunds of the increase to the luxury car tax where they lease a vehicle and also bear the cost of the tax and the changes. These amendments also ensure that those who entered contracts to purchase a luxury car before 13 May 2008 are not precluded from paying the 25 per cent because they later decide to finance the car through hire purchase or leasing arrangements.

Not only does this take into account the timing issue and make sure the right amount of luxury car tax is paid; it also caters for the different financing arrangements which are in place. So these are good amendments. They are minor amendments, which will make these changes operate as intended and ensure that the processes that are in place are functional and efficient. In the 2008-09 budget the government took a decision to increase the rate of luxury car tax from 25 per cent to 33 per cent. That was part of the Rudd government’s plans to make the tax system fairer and to contribute to a strong fiscal position. There would not be too many people either here or out in the community who ought to be arguing against this position, because, for the very large majority of people, a luxury car is something they will never be able to experience, given that we are in tough global times.

I still hear—although I find it almost amusing—the deniers on the other side. Not only are they in denial about climate change; they are in denial about a global financial crisis. They seem to support that it exists when it suits their agenda but then deny that it exists when it comes to anything that the government must do in response to protect Australians and the Australian economy. There seems to be this bizarre concept on the other side that the global financial crisis only exists to suit their own purposes, rather than that it just exists. Somehow the global financial crisis is the fault of the government in Australia. It is a bizarre concept but we have just heard it again from members of the opposition—particularly the last speaker—who were saying that somehow we were to blame. I am more than prepared to stand up in this House and say that we are responsible for dealing with it, that we are responsible for all the actions we take and that we are responsible for what happens to the Australian economy, regardless of who created this mess, regardless that it is a global financial crisis. But surely none of the opposition members link the election of the Rudd Labor government late last year with the collapse of Lehman Brothers in the United States. Surely the opposition does not somehow link the election of the Rudd Labor government late last year with what seems to be now approaching a recession in the United States, what is currently happening to financial systems in Indonesia and other parts of the world or the financial crisis that we are experiencing globally. Surely not!

But, every time I come into this place or listen to some of the debate in here, that seems to be the view put forward by the opposition. They are trying to say that it is not just that we are now responsible because we are in government and therefore we must deal with it; they are somehow trying to say that we are to blame for it happening. It is a bizarre concept but it certainly seems to be the view being put forward by a number of opposition members. We heard it only moments ago when the member for Fadden was speaking on this. I actually wrote his words down: we were to blame for the global financial crisis. I think they might have to have another look at what is actually taking place in the world.

I do not believe that ordinary Australians are offended by a small increase in the luxury car tax from 25 per cent to 33 per cent. Nor do I think they are offended by the fact that tourism or farmers would particularly be excluded from paying that extra and would be getting a refund for it. I think there is good cause to show that not only are the intent, purpose and drive behind what we are trying to achieve with this bill and this policy right but so are the exemptions.

It is also notable that the opposition purport that this was something that was uniquely being driven by the Rudd Labor government, that somehow this is all of our doing. The reality is that a luxury car tax of sorts is not something new. Luxury car taxes have been in place for quite some time. In fact, under the Fraser government a type of luxury car tax was introduced—certainly a tax of vehicles over a certain price. So it is nothing new. It is not something that the opposition should be arguing against; it is an accepted and legitimate method of taxation for vehicles over a certain price range. It is also something they support. Even though they come into this House, say that they are against these measures and that they will vote against things in the Senate and carry on—as oppositions will do—they do not have a great policy objective. So, while there might be some argument and debate over some of the finer points and refinements of certain policies, the mere fact that there has been an increase from 25 per cent to 33 per cent in itself is not an excuse for the opposition to block these bills and use the excuse of certain categories of operators in Australia, after the amendments have been made to make sure farmers and tourism operators get a refund.

I think it is just a little bit cheap and a little bit shallow of the opposition. It is reflected in the opposition’s reactions to a whole range of other areas—like the way it reacted to bank deposit guarantees, short selling and all the critical and essential things that this government has had to do and has willingly done. This government has taken up its responsibility to make sure that these things took place in a very timely way. We have been saying in here that we have taken strong and decisive action, because that is exactly what it is: strong and decisive. In times of global crisis, you do not sit around twiddling your thumbs, looking around the room, hoping somebody else will come up with a policy and a direction. What you do is consult and lead. And that is exactly what we have done. We have done it in a whole range of areas. We have done it in the short-selling area. We have done it by guaranteeing peoples’ bank deposits—both large and small. We have made arrangements to make sure that we restore not only domestic confidence in our banking and financial systems but also international global confidence that the corporate governance system of Australia is robust and sound.

It will best place our national economy to deal with the very real issue of decreasing car sales. We heard again from members opposite and other members of a decrease in luxury car sales of potentially up to 20 per cent. While I have not checked that specific figure, it is probably close to the number. There has been a decrease in ordinary car sales in the magnitude of some 15 per cent—and that is probably growing. That is a worrying statistic. But on this side, we have not just worried about that statistic; we have actually done something about it. We have put together a massive fund and provided the Australian automotive industry with a strategic plan over the coming decade to ensure that it not only survives but grows stronger, finds new innovative ways to operate and remains competitive and efficient so that we keep the jobs and create more jobs in that particular sector.

This bill, while it is about minor and technical amendments, is part of a larger suite of bills which look at the whole automotive industry. I am quite proud to speak on this, as I said earlier on. It is, while minor, a very important part of the range of policies that we are bringing to the table in the national interest.

These amendments are required to provide clarity and certainty to car buyers, to finance companies and to car dealers. I strongly urge the opposition to support this. This bill will give the sort of clarity and certainty that is desperately needed in the marketplace. If they were true to what they say to people about them representing small business and how small business is the backbone of the Australian economy, they would do something real by backing this bill in this place here today. That is what they ought to do.

I have spoken to auto manufacturers, car dealers and people who work at dealerships and, let me tell you, they are very frightened about their industry and their jobs. They are frightened about the future and what is happening in the world and the impact that is having. The numbers that we read out in this place about sales being down between—let us say—15 and 20 per cent are reflected in job losses. That potential reduction in jobs is something that we need to look at carefully. If those sales continue to decline, fewer salespeople will be required, fewer vehicle delivery people will be required and fewer people will be required pre-delivery—fewer people will be required in that industry. This is causing enormous pressure and fear within that industry.

We have been taking a number of actions to ensure that there is a future for the automotive industry in Australia, including allocating billions of dollars to it. We have looked at a green car scheme and other ways that we can co-invest with industry. We have made sure that they are part of the strategy.

We have also taken some action to assist finance companies, including automotive finance companies, to return some stability to what have been longstanding dealerships right across the country. Through no fault of their own, they have had the rug pulled out from under their feet. I have to say that right now I do not have too many good words to say about GE Finance, GE Money or GMAC in terms of the way that they have operated. While they did give some months of notice, when you consider the amounts of money that were invested in terms of floor plans for dealerships, it is a little bit too rich for those companies to be pulling out of longstanding relationships with auto dealers who have looked after them by giving them their business over many years—and in some cases decades.

To just walk away from the auto dealers in Australia is wrong. Some of them will be able to refinance; some of them will be able to pick up and enter into new arrangements, but others will struggle because of the magnitude of finance that is required. People who are listening may not understand, but even a modest sized auto dealer may have a floor plan worth tens of millions of dollars. Some of them have enormous investments of sunk capital through their franchise arrangements into the physical structure that houses the cars, which is often required by prestige car dealerships. They have a lot of money tied up in that. They cannot simply pack up and go home. They need that finance to make sure that they have liquidity in their dealerships.

That is certainly not part of this bill but it is part of the general suite of bills and policies that we are putting forward in terms of stabilising the Australian economy and ensuring that the automotive industry is stabilised. Through the luxury car tax, we will ensure that there is a proper tax regime for those people who can afford it. People ought to be able to buy luxury cars if they can afford them, but they should pay an appropriate amount of tax. That is the key here. I do not think that it is onerous to move from 25 to 33 per cent, particularly given that these minor amendments will provide for a rebate for those people who fall into either the category of ‘farmer’ or ‘tourism operator’. Those arrangements are good policy.

The government has also asked David Murray to explore options to help facilitate larger and more liquid institutions to provide liquidity support to various market link investment vehicles. APRA will also fast track applications for finance companies. We are doing a whole range of things in trying to make sure that not only the confidence of the auto dealers is restored but also the finance companies that will deal with them have some certainty about their futures. All in all, I commend this bill to the House. It makes some minor amendments that the Senate has put forward. Thank you. (Time expired)

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

The Tax Laws Amendment (Luxury Car Tax—Minor Amendments) Bill 2008 seeks to correct serious deficiencies brought about by Labor’s rushed deal with the minor parties in the Senate to introduce a luxury car tax. This bill corrects some flaws in a tax which is fatally flawed. It is an example of incredible bungling. I am amazed that government members are even prepared to come into the House to try and defend what is completely indefensible.

The legislation was designed to put a luxury tax on vehicles. Deals were done with the Greens and the Independents. The rules to implement those concessions were in fact bungled and a lot of unintended consequences arose. These changes improve the situation, but the reality is that they do not fix it. The tax is still fundamentally flawed. The government should take it back and redraw it so that the people who are entitled to concessions in fact get them. There are all sorts of anomalies in the tax as it stands that will remain even after this legislation is passed. The opposition will not be opposing this legislation because it makes some improvements. But it should be seen as the first step to a comprehensive reform of the legislation that was announced on budget night and then implemented in a bungled way.

Debate interrupted.