Susan McDonald (Queensland, National Party, Shadow Minister for Resources) Share this | Hansard source

The coalition will not support the Treasury Laws Amendment (Electric Car Discount) Bill 2022. It's not because of electric vehicles; it is about bad policy. In this legislation, the government has failed to do a number of things. It's failed to establish clear criteria and metrics of success for the policy. It has failed to ensure the expenditure is temporary, proportionate and linked to tangible productivity gains. It has failed to quantify any benefit of the policy to electric vehicle uptake, to emissions reduction or to the budget bottom line. It has failed to tangibly address the biggest constraint on electric vehicle uptake, which is supply and infrastructure, and it has failed to consult with business and civil society on policy design.

This is at odds with the new government promising sensible economic policy and fiscal repair prior to the election. In fact, the Treasurer said on 28 June 2022:

… Government must make the hard decisions necessary for responsible budget repair.

…   …   …

… making sure that spending is about building value, not buying votes.

… every household has to make tough decisions about what they can and cannot afford—and it shouldn't be any different for their government.

And because the budget should be about high-quality investments in the right priorities.

Throughout the bill, this government has revealed this to be nothing more than pre-election posturing.

This is about a Greens deal to deliver for the inner-city and not about practical measures for people in Australia who are struggling under unaffordable cost-of-living issues, who are struggling to meet basic cost-of-living measures. This government is introducing a bill that is going to bake in costs to the budget for years and years to come. This is very serious. It is incredibly serious because the independent Parliamentary Budget Office has said that this bill will cost billions of dollars—that's billions with a 'b', not an 'm'—through the next decade. And yet the government cannot say what it will deliver for emissions reductions. They cannot say what it will deliver to the electric vehicle market. They cannot even say what criteria would make it a success.

Demand for electric vehicles is already high. It's growing. Figures from the Federal Chamber of Automotive Industries shows sales of pure battery electrical vehicles last month represented the highest market share ever recorded. This bill is not just about pure electric vehicles; it also covers hybrid vehicles and variations. My daughter, who lives in Brisbane and is able to commute around the city, has a hybrid vehicle. It is very cheap to run. That's terrific news. But she pays registration and, when she uses diesel or fuel, she pays a fuel tax. But this bill removes the FBT payable on vehicles up to $84,915. It provides a subsidy for people with electric vehicles and hybrid vehicles, but not for people who do not have the luxury of a short commute. It does not provide the same advantage to people living in northern Australia.

This is a bill that is incredibly poorly conceived and poorly budgeted. Despite being referred to as tax reform by the Treasurer, the Senate inquiry suggests this bill is high-cost and low-impact and has been designed with no consultation with industry, government or civil society. A number of experts have a raised serious questions about equity, financial stability and price pressures on the electric vehicle market, and evidence from Treasury and the department of climate change shows the impact of this policy on emissions reduction has not been quantified. Third-party evidence suggests it is negligible.

I am perplexed because, daily, we hear the Treasurer talk about the difficult financial situation he is in. He talks about the $50 billion budget increase, additional income thanks to commodity prices, which he has spent, and he is once again spending more money than he is collecting with this budget measure. It provides a subsidy on FBT to some people but does not make that same subsidy available to every Australian. It does not take into account that some of the vehicles they are subsidising will not pay fuel taxes. It does not take into account the impact on road maintenance and the collections that Treasury relies on in order to fund the cost of road maintenance, of safety concerns for Australians travelling big distances. Instead, it subsidises people who have very short commutes.

This is a crazy policy. We know that there is not enough infrastructure available yet to charge your vehicle. Imagine living in a high-rise building, in Sydney or Melbourne, where there are not enough shareable power points to allow these vehicles to be charged. We see images every day of extension leads draped out of windows and onto the street, to support vehicles that may not be paying the electricity cost to their high-rise building body corporate. Yet the government will subsidise the market share of a vehicle that is growing in popularity. I want to be clear: the opposition is not opposed to this bill because we have any problem with electric or hybrid vehicles; it's opposed to it because of poor infrastructure planning and poor budget planning. This is poor policy.

When Peter Shergold reviewed the government's ability to make good decisions, I am almost positive that this would be a shining example to him of poor government policy and decision-making. 'No consultation' was the No. 1 thing identified by Mr Shergold. 'Poor budget outcomes' was another. 'Clear criteria' and 'measurements of success' and 'ensure the expenditure is temporary, proportionate and linked to tangible productivity gains'—I could go back and repeat the list that I started with, at the beginning of this contribution.

I shan't, because there is nothing in this bill and policy-making that gives me any confidence in this government's ability to manage the budget and make good decisions, and I certainly have no confidence in the government supporting people who are not as advantaged as those who have short commutes, who live within places that have—hopefully—some sort of infrastructure to charge their vehicles. It is a government that has no plan to replace diesel fuel and fuel taxes. Instead, we're going to subsidise the FBT benefit for people who are buying electric and hybrid vehicles.

The Institute of Public Accountants—not a group usually known for hyperbole or exotic statements—has stated that this policy:

… will have a negligible impact on reducing Australia's carbon emission from the transport sector.

It has said:

The Governments assertion that this initiative makes the take up of EV's more affordable is misleading …

And—

Private buyers and sole traders of EV's cannot access these significant savings …

The Institute of Public Accountants went on to say:

… there are other measures which would have a far greater short-term benefit to the environment than this measure.

Finally:

Given the cost of EV's, their limited supply and the lack of infrastructure, it seems the cost of this initiative is not warranted, particularly given the small number of vehicles that is anticipated to take advantage of this initiative over the three-year exemption period.

I have a range of quotes. I've quoted the Institute of Public Accountants. There's the Tax Group at the Melbourne Law School, UnitingCare, Treasury. Even Treasury is not able to articulate the long-term costs of this measure. Treasury agrees with the Parliamentary Budget Office that the cost of this measure will grow over time, stating in response to a question on notice that the costs of the measure are expected to increase over time as the measure matures, including into the medium term, and that the Treasury costing is sensitive to the uptake of electric vehicles, and this is something which could vary.

I'm truly appalled to be part of this Senate, forming part of a parliament that is led by Labor, which is making such poor policies decisions that the only people who support them are the Greens! The only people who support this bill are people who want to encourage electric vehicle rollouts in the face of overwhelming evidence that this is not a necessary budget measure. It is not going to increase the uptake of electric vehicles, which is already a growing, mature market. It is not going to increase the infrastructure that's available to support these vehicles. Worse—for me, as a representative of regional and Northern Australia—is that it will not provide any advantage at all to the people who are doing it the toughest: the people who have the highest cost of electricity, the highest cost of insurance and the highest cost of food. The Labor Albanese government, in partnership with the Greens, are delivering for the most entitled and supported group in Australia but they're not supporting poor Australia. They're not supporting working Australia and they're certainly not supporting regional Australia.

It's shocking, and we should be ashamed to sit and pass this piece of legislation, because it is not by any measure good policy. Peter Shergold would tell us that. Blind Freddy on the street would tell us that! This is not a measure that is suitable for the outcomes that this government says it's trying to achieve: budget restraint, emissions reduction and supporting Australians who are struggling with the cost of living.

Ashamed we should be. We have the opportunity in this place—the opportunity that I'm taking right now—to point out shortcomings in policy development. We have the opportunity to get a decision right on this particular bill. I would encourage those opposite, members of the government, to pull this bill and to say: 'We're going to go back and think about it. We're going to have another look at how we can deliver on all of our stated objectives.' Budgetary measures, emission measures, consultation with industry, delivering for Australians who are under increasing cost-of-living pressures, the lack of infrastructure that's available to support these vehicles—it's for all these reasons that this poor public policy should be stopped immediately.