Mitch Fifield (Victoria, Liberal Party) Share this | Hansard source

Labor almost always get it wrong on tax. Year after year, budget after budget Labor routinely voted against the personal income tax cuts, for instance, which we put forward in government. I say that Labor almost always get tax wrong because there was the odd exception, most notably our 2007 income tax policy, which Labor as we all know copied and have legislated. But now that we are out of government, Labor have got it wrong again. As we always said: without the coalition in government to copy, Labor would get policy wrong. They have, and this legislation is yet another example, so I rise to join with my coalition colleagues in opposing this old-style Labor tax grab. The coalition have opposed and will continue to oppose the government’s punitive increase in the so-called luxury car tax. We oppose it for a simple reason: it is bad policy. We also oppose it because it was not an election commitment. The government have no mandate for this. As an opposition and as a coalition, we oppose tax increases as a matter of principle. We are the two parties in this parliament of lower taxation.

What we are seeing here is Labor true to form. It is again the politics of envy and class warfare, the sort of politics that Labor senators opposite have practised all their political lives. We heard a great statement by Kevin Rudd before the election that he was not a socialist. He had put behind him the days of his Christian socialism. He might still doff the cap to Dietrich Bonhoeffer but he was not a socialist—that was all behind him. The politics of Lathamesque class envy were banished from the Labor Party. But we are seeing the resurrection of that sort of socialism here with this tax grab. We are seeing it also with Labor’s attack on private health insurance. We have seen it with their attacks on Catholic and independent school funding. Most recently we are seeing the politics of envy manifest itself in the very vicious and quite personal attacks on the member for Wentworth and Leader of the Opposition, Mr Turnbull.

Labor are resorting to what they know best: the politics of envy. They are using it on this occasion to justify this tax slug. Labor’s claim that the coalition is protecting the Rolls-Royce, Porsche and Ferrari drivers from a tax increase is false, as Senator Williams said. The coalition is acting to protect families, those in rural areas, the tourism industry, those in the Australian car-manufacturing industry and also those on the floors of car dealerships—those who actually sell these cars. Labor’s decision to reintroduce the tax after it was defeated is playing politics with the Australian automotive industry, which is now faced with continued uncertainty and reduced sales at a time that it can least afford it.

The facts are pretty straightforward. Almost 70 per cent of cars subjected to the luxury car tax are below $75,000—cars such as Toyota LandCruisers, Holden Commodores, Toyota Taragos, Mitsubishi Pajeros and Ford Falcons. Only 17 Rolls-Royces were sold in Australia last year and only 522 Porsche 911s were sold, yet over 6,000 LandCruisers were sold. In fact, the LandCruiser is the top-selling so-called luxury car, averaging around $74,000 each. The Toyota LandCruiser is not a luxury car. It is a rural workhorse and it comes standard without carpet. We have to face it: who on earth buys a LandCruiser as a status symbol? Labor is slugging Australian LandCruiser drivers $6 million extra per year, but Rolls-Royce drivers will only be slugged $1 million per year. Worse, under Labor’s deal with the Greens, for example, an imported BMW 3-series diesel would be exempt from a roughly $900 tax increase, but a roughly equivalent optioned-up Australian made Holden Commodore would not. That is bizarre—and Labor pretends to support the Australian automotive industry.

On top of all this, even Labor senators in their majority report after the Senate inquiry into this tax grab concluded that the tax would be inflationary. Labor’s only rationale for this tax is to increase revenue to boost the surplus and supposedly fight inflation. Yet even Labor senators concede in their own majority report that the impact of this tax would be inflationary. The whole argument for increasing this tax was as part of a so-called war on inflation. But I think we are seeing a new Labor doctrine here: fight inflation by increasing prices through higher taxes. I have to admit I have not heard of this particular inflation-fighting concept before, but Labor are always coming up with new economic ideas.

You do not want to take it from me that this tax increase will be inflationary; take it from the words of the Labor senators themselves. At paragraph 2.19 of their report they acknowledge that this measure will be inflationary. The inflationary impact will not be massive—I have to admit that. But I would have thought that, if your objective is to fight inflation and you say that there is an inflation crisis and that there are genies jumping out bottles all over the place, you would not actually do that by introducing a measure that your own senators acknowledge would be inflationary. I would expect that the measure be neutral at worst and anti-inflationary at best. But, no, that is not what we have here. Even Labor senators acknowledge that point—they put their names to that point in their majority report and they have signed off on it.

The Senate economics committee hearings into the proposed increase in the luxury car tax oddly wound up without taking evidence from someone who I think is a key witness—Mr Steve Bracks. Mr Bracks was of course appointed by Senator Carr to conduct a review of the Australian automotive industry. The government refused to release the Bracks review at that time, and its evidence, to the Senate inquiry even though it was sitting on Senator Carr’s desk at that time. Mr Bracks was specifically tasked, amongst other things, with examining the luxury car tax in his review, and indeed in his interim report flagged reducing the tax, not increasing it. Despite having the review, Senator Carr refused to release it.

Debate interrupted.