Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Hansard source

I thank Senator Cameron for that question. The government’s priority since the day that we came to office has been to provide this vital industry with certainty. Even before the world was gripped by the recession, the car industry was facing acute pressures. That is why we announced A New Car Plan for a Greener Future in November last year. We took decisive action and, as a result, the Australian industry is now ahead of the game. Total vehicle sales and sales of Australian made vehicles both rose in May compared to April. Sales of commercial vehicles were especially strong. Industry observers attribute this to the government’s small business and general business tax break. It allows a 50 per cent bonus of tax reduction for assets purchased by small business. The Federal Chamber of Automotive Industries says:

The business tax break is proving extremely effective, providing a much needed boost to vehicle sales and stimulating economic activity.

The tax break allows small businesses to claim a deduction of some $28,590 on the purchase of a $60,000 vehicle plus their normal depreciation which, in this example, would be some $14,295 over a full year. This is about providing the stimulus needed to keep people in work and to keep businesses going through the global downturn. There are more tough times ahead, but there is no question that the Australian car industry is heading in the right direction.