Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Hansard source

The opposition remains opposed to this tax grab by the Labor Party. Before dealing with the specifics of the legislation, the Tax Laws Amendment (Luxury Car Tax) Bill 2008 and related bills, it should be remembered that this legislation was only before this place some four sitting days ago. The Labor Party, in typical style, are using their bullyboy tactics to bring it on again, in complete contempt of the procedures of the Senate and the fact that the Senate voted against this legislation only four sitting days ago. What they have clearly done in the interim is made all sorts of deals with senators of all sorts of persuasions in this place to try to get this badly thought out proposal through the Senate.

It is interesting that, when in opposition, Labor said the Senate had to be treated with respect; its decisions had to be respected. Of course, as is very much coming to light now, whatever Labor said in opposition is not to be trusted and it is a completely different situation now that they are in government. But I think everybody did expect the Labor Party, especially under Mr Rudd’s leadership, to engage in these sorts of bullyboy tactics, so the issue really is for us to consider the detail of this legislation.

We as the opposition are opposed to this legislation because we oppose increased taxes. That is a very principled position that we have put, and we believe that taxes should only be increased if there is a real case made out in support. The Australian Labor Party told us, in introducing this new tax, this surcharge on a tax, this 30 per cent increase in the luxury car tax, that we needed this to fight inflation. That was the mantra: we need this proposal to fight inflation. So the Senate Standing Committee on Economics looked at this proposal, and Senator Annette Hurley, the Labor committee chair, came back to this chamber with a report which, in paragraph 2.19, told the Senate and the world that this proposal will be—you guessed it—inflationary. So the one and only reason that the Labor Party could muster for the new luxury car tax surcharge was to fight inflation, yet Labor senators themselves, even Senator Doug Cameron, acknowledge that it will be inflationary.

Given that that is the fact of the matter, one would have thought the Australian Labor Party would have had the decency to withdraw the legislation in the face of the criticism provided by their own senators. But, as is so often the case with the Rudd government, the reasoning, the rationale, for a proposal does not match their real thinking. This was purely and simply a tax grab, a tax grab against the better interests of the Australian people—and, might I add, against the better interests of the Australian car industry.

All three Australian car producers and the Federation of Automotive Products Manufacturers in Australia are opposed to this proposal, the reason being that this will hurt the manufacturing sector in Australia big time—no ifs, no buts: it will hurt the manufacturing sector. Of course the Labor Party, in their high and mighty way, say that this is simply a tax measure.

Senator Kim Carr, the Minister for Innovation, Industry, Science and Research responsible for the automotive sector, has been deafeningly quiet in relation to this debate. He has not come into this debate to defend the manufacturing sector or defend the automotive sector. He has simply been absent. Of course we on this side do not mind that he has not come into the debate, because, if he had, chances are that it would have been even worse. He championed the CSIRO and they suffered $63 million worth of cuts. He championed ANSTO and they suffered $12 million worth of cuts. He reckons that he championed the Commercial Ready program—that was completely abolished. Everything in his area of responsibility is being hacked to pieces and this is just the latest episode in Senator Carr’s very poor management of the Innovation, Industry, Science and Research portfolio.

Let us deal with some of the reasons and rationale. When asked about this, Senator Carr says, ‘We are not in the business of giving millionaires handouts or assistance.’ So he believes that any Australian who today is driving a motor vehicle worth more than $57,180—that is the threshold—is somehow a millionaire. How very mistaken. He is just factually wrong. But how indicative of the terrible social dogma that he still carries around in between his ears. I would have thought that sort of politics of envy would have left the Labor Party, those now sitting on the government benches. They swept it under the carpet whilst in opposition. Now that they are in government it is all coming out again.

One of the most disappointing things about the last vote was that a former national secretary of the AMWU, now senator, Doug Cameron, voted for the increase in this tax. Senator Cameron knocked off Senator George Campbell in a vicious preselection fight in New South Wales because Senator George Campbell had not done enough for the automotive sector and the manufacturing sector. And so one of the very first votes in this place of this great white knight, who was going to fight for the jobs of workers in the automotive and manufacturing sector, is to do these workers in the eye. Make no mistake about it: all three of Australia’s car manufacturers that are left have said that this will damage them. That is code for reduced sales, which of course translates into fewer jobs. We all know that. The Labor Party know that. Senator Doug Cameron knows that. And yet one of the very first votes he is involved in is to do these workers in the eye.

This is a punitive tax in anybody’s language. When somebody buys a motor vehicle they pay stamp duty, and of course that varies according to the state but from a federal point of view there is the 10 per cent GST. After you go over the luxury car tax threshold of $57,180 there is the 25 per cent luxury car tax—10 per cent plus 25 per cent equals 35 per cent. Labor are now seeking to add another eight per cent to make it a 43 per cent tax in relation to motor vehicles that are over $57,180. In anybody’s language, that is a punitive tax. And what makes it so obscene is that if a family, say, wants a top of the range Toyota Tarago then they are looking at around the $60,000 or $60,000-plus mark. This is not a status symbol in anybody’s language. It is not the sort of car that self-made millionaires would drive around in. So people who are genuinely concerned about the safety and security of their family will be paying a luxury car tax. But those who happen to have sufficient money to buy a private plane, a private yacht or indeed a $200,000 Rolex watch do not pay one cent of luxury tax in any way, shape or form. This is now the new social equity under a Labor government, under Mr Rudd and his regime. It is unfair, it is punitive and we oppose the tax.

Since we have had this legislation before us, I understand that a number of agreements have been reached by the Labor Party and the minor parties in this place in relation to a whole host of things. When you examine what is being proposed, you see that the people they seek to champion will in fact be sold down the creek—and some of the amendments are absolutely contradictory. Allow me to go through just some of the examples for the Senate.

First of all, we are going to have, according to Family First, an amendment to exempt primary production business. That is very interesting because primary production, as I read it as defined by this amendment, will mean you have to be a registered primary producer under the Income Tax Assessment Act. So if you live in rural Australia and you happen to be a primary producer—and we all know how hard times are there and how cash-strapped and drought stricken those people are—you will have to borrow the money to pay the luxury car tax and then seek a rebate later on and get the money back a month or so later. What a silly, bureaucratic system. How stupid. Why not just exempt them right up-front? This is the sort of nonsense we get when the Labor Party try to cobble things together and make policy on the run.

Do they think, ‘Rural Australia means farmers. There could only be primary producers out there, surely’? The problem is that the Labor Party’s primary industries minister has never set foot in the country areas of Australia. He represents a Sydney outer suburban seat. He has no idea, and of course that is clearly shown in this legislation.

In rural and regional Australia you do not only have farmers and primary producers who need four-wheel drives to gain their income. What about the Australia Post contractor, who has to get the mail through? What about the vet who has to drive onto the farm to access a cow or a horse that is down? What about the general practitioner, the doctor? What about the mechanic who has to service the tractor that has broken down in the middle of a paddock? All these people need four-wheel drives for the purpose of earning their income. Yet Family First—and I am surprised at this—and the government have done a deal to say: ‘No, blow the vet, the Australia Post contractor, the general practitioner and the agricultural contractor, who might be the local fencing contractor. Forget all of those. We think that in rural and regional Australia there are only farmers and nobody else.’ This is a very bad amendment.

We then have the tourism amendment that applies only to four-wheel drives. That is very interesting. The tourism sector buys about 8,000 so-called luxury cars each year and relies heavily on sedans, such as the Holden Statesman and top of the range Fords, to take tourists around, let us say, the Adelaide Hills for wine tourism or around my home state of Tasmania. These sedans are very important. Might I add that the sedans would be more fuel efficient than the four-wheel drives. Under this amendment, if they buy a sedan and they are registered in the tourist sector, they would not get an exemption but, if they converted to a four-wheel drive, which consumes more fuel, they would get the exemption. What sort of policy nonsense is that? Why would you favour the tourism sector that only has four-wheel drives and not help the tourism sector that needs two-wheel drives and sedans? There is no logic in it.

This is a desperate attempt by the government to cobble together a policy which was fatally flawed from the outset. The opposition will oppose this legislation not only on its second reading but also on its third reading. Having said that, we have a hunch that, unfortunately, this legislation will go to the committee stage. If it goes to the committee stage, we will actively involve ourselves in that stage and intervene to try to make this fatally flawed legislation less fatally flawed. But, unless this is thrown out completely, we will be voting against the legislation on the third reading as well.

I am interested to see the amendment that the Australian government cobbled together. It is interesting that Family First seem to have their amendment done by Senator Fielding. The closeness and cosiness of the relationship between Labor and the Greens has been shown, as the Green amendment is now in fact a government sponsored amendment, with an explanatory memorandum by Mr Swan, the Treasurer. That amendment will ensure that six Australian-made motor vehicle models will be subjected to this punitive higher tax but about 25—over two dozen—imported models will be exempted. I am sure all the international car makers tonight are cheering on Mr Rudd, the Prime Minister, and Senator Bob Brown, the Leader of the Australian Greens, and saying, ‘You beauty.’ The international car makers above all will be cheering on Senator Doug Cameron, the man who came into this place to fight for the workers in the automotive and manufacturing sector. They will be cheering those people on, but the poor workers in South Australia and Victoria, whose jobs are in jeopardy as we speak, without this extra impost, will be even more concerned and worried than before about their job prospects.

One other gross inequity of this legislation is its retrospectivity. What occurred was an absolute disgrace. The Treasurer announced that this would apply to any vehicle that was delivered after 1 July 2008, that any vehicle that had been ordered, signed up for or contracted for prior to budget night would not be exempted. So good ordinary Australian citizens, having done their sums, having worked out their calculations, have now been confronted with the prospect of this tax being applied retrospectively.

We as an opposition make no bones about the fact that we oppose retrospectivity, especially when it comes to taxation. Therefore, if this bill does go to the committee stage, we will be moving an amendment to delete this evil—and I describe it as an evil—of retrospectivity in taxation. No Australian should have to worry that a government might come along and whack an extra tax on their purchase after they have entered into a binding contract. That is fundamental first principal stuff, I would have thought, for any government, but of course not for the Australian Labor Party because they believe that anyone who can afford a car above $57,180 does not deserve to be protected by the basic considerations of the law.