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

The committee is considering opposition requests for amendments to the luxury car tax suite of bills. This luxury car tax was introduced on the basis of the need to fight inflation. The government’s own senators on the Senate Standing Committee on Economics find that this legislation will be inflationary. It will hit the Australian car industry. It is going to hit innovation and safety. It is going to increase all car prices. And, of course, this is at a time when the Australian car industry is in deep trouble.

We have seen just today, again, car sales collapsing. Indeed, the latest figures show that new vehicle sales fell for a second straight month in August. They fell by 3.5 per cent. New vehicle sales fell by 7.2 per cent in the 12 months to August—the weakest annual growth rate in about seven years. Consumers have cut back on spending on big ticket items, the Economist told us. In that environment, we have the Labor government and, I understand, some of the crossbenchers agreeing to put an increased tax on motor vehicles to make them all the more expensive, to make them all the more out of reach for our fellow Australians. But what they do want to do is give a tax break to about two dozen imported vehicles—two dozen imported models. I traverse the topic of the other requests for amendments because ours are coming first and, if ours are passed, I suggest the others would be negated. What I am putting to the Senate as clearly as I possibly can is that the Greens requests for amendments have problems and the Family First requests for amendments have real problems and the opposition’s solution, if you are going to have this punitive tax, is in fact the best option.

Let us have a look, first of all, at the Greens requests for amendments. They say that if you have a low-emission vehicle between the price bracket of $57,180 and $75,000 you will be completely exempt from the luxury car tax—and somehow that is going to save the world. We are talking about 1,500 motor vehicles; it is window-dressing at its worst. What happens to all those buyers who have bought low-emission vehicles that cost below $57,180? There is no tax relief for them in any way, shape or form. What about those who buy motor vehicles above $75,000 and seek a low-emission motor vehicle? There is no tax relief for them at all. So the Greens-Labor accord view of the world is that we are somehow going to save the environment by providing a tax exemption for 1,500 motor vehicles between the price bracket of $57,180 and $75,000.

Quite frankly, I do not believe that that will have any genuine environmental impact, but it will have very genuine impacts on the purchase choice of motor vehicle buyers. We will have the removal of not only the proposed eight per cent increase but also the current 25 per cent luxury car tax as well. So, with the removal of that 33 per cent cut luxury car tax in comparison to Australian made cars, there will now be a price differential of literally thousands of dollars. So a loyal Australian who might want to buy a Holden Commodore HSV is confronted with the fact that a BMW may well now be thousands of dollars cheaper. And yet we are told somehow that this is a tax on the rich people. I think it is a greater status symbol to be driving around in a beemer than in a Holden Commodore. If that is what is motivating those opposite, they have undone their argument by doing this silly deal with the Greens.

What concerns me most of all is that I think Family First and the Greens may have come to an arrangement where they in fact support each other’s amendments. If that is the case, they will be supporting contradictory positions. The vehicles that Senator Fielding is trying to support are the gas-guzzling four-wheel drives. I happen to agree that they do need an exemption for the reasons that I have previously outlined. But how can the Greens support such a motion and then, on the other hand, support a motion dealing with vehicles that have low emissions? They are contradictory positions. Of course, it is not for us in the opposition to determine how they justify that, but it is a matter of some concern for us to try to make some headway in relation to the thinking on this.

In relation to Family First’s amendment—and there are lots of problems with theirs—if you are a primary producer you get the exemption for one vehicle per annum, whereas if you are a tourism operator you can get it for a hundred vehicles or more per annum. There is no limit. The only stipulation is that you use that vehicle solely for tourism purposes in the course of your business. So, if you happen to have bought that vehicle for tourism purposes but then allow a staff member to take it via the milk bar to buy milk on the way home, it will no longer be purchased solely for that purpose and therefore the tax exemption will evaporate.

In relation to the definition of ‘primary producer’, I invite the Greens to have a look at what the definition is. Under the Income Tax Assessment Act it includes—now wait for this!—people that fell trees in the forest, including, of course, old-growth forests. So we will have the spectre of the Australian Greens voting for a tax exemption for those good, hard-working forest workers who harvest old-growth forests.