Nick Xenophon (SA, Independent) Share this | Hansard source

It was written to one of my advisers, so it said neither. I would like to make it clear that what the email states is:

There is a break in the data series which means that numbers in recent years are probably not comparable to those before 2003 because of a change in FCAI methodology. It is also not clear to us whether the past industry statistics upon which the claims above are based have a definition consistent with the luxury car tax threshold.

What is clear from the Senate economics committee report is that there has been an increase in the number of vehicles that fall within the threshold from 4.55 per cent to some 12 per cent. The point made by the Treasurer’s office, and I think it is a reasonable one, is that, compared to 1979, it now takes less in terms of average weekly earnings to pay for a motor vehicle that is above the threshold and that there have been drops in the price of vehicles with technological advances.

My approach is a cautious one. I think that it is a more robust, better assessment in the longer term to look at CPI rather than CPIMV, but I am taking a cautious approach. I have taken the information I have received from the Treasurer’s office that there would be a significant impact for the forward estimates in good faith, and I have no reason not to take it in good faith. I believe that the responsible thing to do is to have an alternative amendment looking at a sunset clause for this. I am looking forward to the minister’s formal response to the Henry review on the issue of indexation. I think the alternative position to mine is one that draws a line in the sand. To index now would be fraught with considerable revenue risks.