Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Hansard source

I move:

That the House of Representatives be requested to make the following amendment:

(1)    Schedule 1, page 3 (after line 27), at the end of the Schedule, add:

4  Before subsection 25-1(3)

Insert:

Luxury car tax threshold—general

5  Subsection 25-1(3)

Omit “The”, substitute “Subject to subsection (4), the”.

6  At the end of section 25-1

Add:

Luxury car tax threshold—fuel efficient cars

        (4)    If the ^*car has a fuel consumption not exceeding 7 litres per 100 kilometres as a combined rating under vehicle standards in force under section 7 of the Motor Vehicle Standards Act 1989, the luxury car tax threshold is the ^*fuel-efficient car limit for the year in which the supply of the car occurred or the car was ^*entered for home consumption.

        (5)    The fuel-efficient car limit for the 2008-09 ^*financial year is $75,000. The limit is indexed annually using Subdivision 960-M of the ^*ITAA 1997.

        (6)    In indexing the ^*fuel-efficient car limit, Subdivision 960-M of the ^*ITAA 1997 applies as if:

             (a)    the table in section 960-265 of that Act included an item referring to the fuel-efficient car limit and to subsection (5) of this section; and

             (b)    the reference in subsection 960-270(1) of that Act to provisions of that Act included a reference to subsection (5) of this section; and

             (c)    section 960-270 of that Act applied, and section 960-285 of that Act did not apply, in relation to the fuel-efficient car limit; and

             (d)    the reference in subsection 960-280(2) of that Act to the car limit included a reference to the fuel-efficient car limit.

7  Section 27-1

Insert:

financial year has the meaning given by section 995-1 of the ^*ITAA 1997.

8  Section 27-1

Insert:

fuel-efficient car limit has the meaning given by subsection 25-1(5).

9  Section 27-1 (definition of luxury car tax threshold)

After “subsection 25-1(3)”, insert “or (4)”.

10  Application

(1)    The amendments made by items 1 to 3 of this Schedule apply to taxable supplies of luxury cars and taxable importations of luxury cars on or after 1 July 2008.

(2)    The amendments made by items 4 to 9 of this Schedule apply to taxable supplies of luxury cars and taxable importations of luxury cars on or after the day on which this Act receives the Royal Assent.

Statement by the Clerk of the Senate pursuant to the order of the Senate of 26 June 2000

Amendment (1)

As this is a bill imposing taxation within the meaning of section 53 of the Constitution, any Senate amendment to the bill must be moved as a request. This is in accordance with the precedents of the Senate.

I have moved this request for amendment following agreement between the government and the Greens. The amendment will establish a new threshold of $75,000 for fuel efficient luxury cars in the luxury car tax law—that is, fuel efficient vehicles up to $75,000 will pay no luxury car tax. The vehicles eligible for the higher threshold will be those with a fuel consumption not exceeding seven litres per 100 kilometres. The fuel consumption rating refers to the combined rating defined under the motor vehicle standards enforced under the Motor Vehicle Standards Act 1989.

The Senate committee noted that the average fuel consumption of vehicles under the existing luxury car tax threshold is around nine litres per 100 kilometres. The fuel efficient car limit will only apply to luxury vehicles that are more fuel efficient than these. The fuel efficient car limit will be indexed in the same way as the existing luxury car tax threshold, and the threshold increase will reduce the amount of luxury car tax payable on these fuel efficient vehicles. For cars that are currently on the market, in most cases the effect will be to reduce the luxury car tax payable to zero. Most cars that currently meet the fuel consumption requirement do not pay luxury car tax. However, the fuel efficient car limit will act, over time, as an incentive to car manufacturers and importers to get very fuel efficient cars into the Australian market.

The government would like to acknowledge the cooperation of the Greens, Senator Xenophon and Senator Fielding on these bills. These bills are an important part of the government’s measures to ensure there is a strong budget surplus. Since the Senate last debated these bills, the government has engaged with the Greens and Independent senators in good faith and in order to allow a proper consideration of a key part of the government’s budget. I would like to thank the Greens, Senator Xenophon and Senator Fielding for the positive and constructive discussions on their concerns.