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

If ever there was any doubt that the Labor Party and the Greens are doing deals, this of course is it. The Australian Greens float a proposition and then the Labor Party dutifully prepares the amendments for and on behalf of the Australian Greens. Unfortunately, these amendments, as is so often the case with this particular government, reflect that it does not know what it is doing and it then tries to cobble together its policy whilst on the run. This amendment, as I understand it, will completely remove the luxury car tax. It will not just be the exemption of the eight per cent; it will be the removal of the current 25 per cent luxury car tax from vehicles in the price bracket of $57,180 through to $75,000. The reason for this is that this will apply to vehicles that are described as ‘low-emission vehicles’—vehicles that do seven litres per 100 kilometres or less. It sounds good on the face of it, but let us examine what it will actually do in practice.

First of all remember that there are lots of cars under that threshold of $57,180 and above the $75,000 cut-off point which are fuel-efficient vehicles. What are the tax benefits for them? Nil, zero, zilch—nothing at all. So somehow the environment is going to be saved by providing some sort of exemption in this very narrow price bracket. Undoubtedly, global warming will stop and everything will be—

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Polar bears will be saved!

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

Good. Senator Boswell interjects, ‘Polar bears will be saved,’ and that even gets Senator Conroy to smile, which is a pleasant change. So well done on that, Senator Boswell. But more seriously, this is once again classic Mr Rudd: all symbolism and no real substance. How many car sales is it going to impact? On current sales figures, 1,500 motor vehicles in a climate where we are now selling about one million motor vehicles per year. That is going to have a huge impact on the environment, isn’t it? What a great piece of work this is! But of course that is what happens when Labor and the Greens cobble these things together. Nobody could argue that this is going to have a serious impact on climate change. It is nothing but window-dressing.

I would like to ask the minister: how does this fit in with a Carbon Pollution Reduction Scheme? Are these amendments consistent and are they the least costly way to reduce the emissions? You see, fuel economy is not a good measure of environmental impact. Diesel powered motor vehicles—and this is going to clearly benefit imported, luxury motor vehicles at the expense of the Australian car industry—have higher carbon dioxide emissions than petrol and LPG at the same fuel economy. So a petrol engine with fuel consumption of seven litres per 100 kilometres produces 166 grams of carbon dioxide, and a diesel engine produces 184 grams of carbon dioxide. That is around 10 per cent higher. The fact that it is 10 per cent higher is okay, according to the government and the Greens. But, you see, your seven litres per 100 kilometres for diesel, if you are consistent, should be translating in rough terms to 7.7 litres for a petrol engine. ‘No, we haven’t done the research. We haven’t done the homework. We don’t bother about these things.’ Because Mr Rudd is into symbolism. That is all—symbolism. And that is all that the Greens are in fact going to get.

Then we have LPG vehicles that have even lower carbon dioxide emissions than petrol and diesel. However, they tend to use a bit more fuel. So, really, if it were going to be an LPG vehicle, you could get potentially a better environmental outcome from a vehicle that uses eight to nine litres per 100 kilometres.

If you are concerned about environmental damage, I would suggest that you would be doing it on the basis of emissions coming out of the tailpipe and not on the amount of fuel that is actually used. What this is going to do is support the diesel engines against petrol and LPG engines, which of course might be better for the environment. But what is more, this is a very old-fashioned way of going about things because there is now a Euro 5 standard. These engines are considered the most environmentally advanced engines and are required to achieve extremely low levels of emissions of gases, including nitrous oxide, carbon monoxide and particulate matter. But these amendments will not exempt those engines known as the Euro 5 standard. So how old-fashioned and behind the times is this? Once again, it was cobbled together on the run. And of course there are no hybrids included in this list either.

Then we look at what else this legislation is going to do. As I understand the amendments, this will exempt a motor vehicle within the price bracket of $57,180 to $75,000 that was ordered even before the budget announcement—ordered before this amendment was cobbled together. So we have got the prospect of somebody, having ordered a motor vehicle in, say, February of this year with a nine- or 10-month delivery time, which is not unusual, all of a sudden getting a tax windfall of no longer having to pay luxury car tax when it arrived after 1 July. They will get it all back. But if perchance the vehicle was delivered on 30 June they would not get such a tax benefit. Why not? What is the rationale? I would expect the minister to answer that later on in the debate.

At this stage, I would ask the minister if he could provide us with a full list of those vehicles that are now going to be exempted. And, yes, there will be Alfa Romeos, Jaguars and all those types of cars in there, but I would like to hear the list. There are only 25 cars and I think it would be of great benefit—

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

You have got the list.

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

I want to make sure that I have got the right list, and the best way that we can ensure that is if you read them into the record, Senator Conroy. I would also like to know what the savings will be on each of those motor vehicles and the volumes of each of these motor vehicles sold. All those questions are premised on what actual modelling Treasury did as to the impacts of this legislation.

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I rise in support of the Tax Laws Amendment (Luxury Car Tax) Bill 2008 and the amendments. Here we are in the middle of what is one of the unprecedented financial crises of the world and we have a government moving to inoculate our economy from the worst aspects of this crisis. And what do we have from the opposition? We have the opposition trying to destroy the budget surplus. It is absolutely essential and in the national interest that this budget is passed in the Senate and that the various aspects of the budget go through to inoculate this country against this international financial crisis.

This is another political stunt from the opposition. They are politically and economically incompetent on this issue. It brings my mind back to what was said about the Liberal Party by the Liberal Party when they were in power, and that was that the Liberal Party were mean and tricky. Well, here we are—the mean and tricky Liberal Party at it again. They are trying to give pensioners false hope. They are trying to destroy the budget. They are trying to make sure that they do everything they possibly can to destroy an economically responsible approach from the Labor Party.

The luxury car tax was first introduced on 1 July 2000. It was to replace the 33 per cent wholesale sales tax that applied to luxury cars before the introduction of the GST. Only six per cent of Australian vehicles will be caught in the luxury car tax. The government has listened to the concerns of the Greens, Senator Fielding and Senator Xenophon. This package deals with the issues never dealt with by the incompetent economic approach of the Liberal Party. This deals with appropriate changes to the luxury car tax that take into account checks and balances on both an environmental and a practical basis. It is something that the Liberals did not have the vision or the understanding to do when in government. The Howard government never dealt with any of these issues.

Members of the former Howard government go back to their usual argument, and that is fear and loathing—fear that jobs will be lost because of the luxury car tax. I have heard a lot of nonsense from other side since I have been here, but this is fear and loathing writ large by the Liberal Party. We have had people standing up and talking about the manufacturing industry, and I have had a look at what people have said in the past. I could not find Senator Abetz talking about the manufacturing industry in a decade. You never heard them talking about the manufacturing industry. We are here now with all this pious argument about the car industry being destroyed and jobs being lost. It is absolute errant nonsense from the other side. You had 11½ years to do something about the manufacturing industry, and what did you do? You did nothing. You stood back and you allowed the car industry to wither on the vine. You had no industry policy, no vision, no approach on the industry whatsoever.

In the Bracks inquiry, when there was an opportunity for the car industry to make submissions on any of these issues, none were made on the luxury car tax. There were no farmers running down there telling them that it would so bad if they could not buy their $90,000 four-wheel drives. My heart bleeds for these farmers in their $90,000, air-conditioned, leather-seated four-wheel drives. These are not the real farmers. You know these are not the real farmers of this country. They are not running around in their flash, leather-seated four-wheel drives as you are claiming.

Let me deal with the argument about jobs. In evidence to the Senate Standing Committee on Economics inquiry into the bills, David McCarthy of Mercedes Benz said that the luxury car tax increase makes Australian made cars below the threshold more competitive with imported models priced above the threshold. Indeed, this is apparently the view of the European Commission, which takes a very dim view of the luxury car tax. I say to the European Commission: so what! This is about ensuring that we have got proper taxation policy in this country. This is about making sure that those who can afford to pay can pay. And those friends of the Maserati drivers on the other side should really understand the issues here. Four-wheel drives are well below the luxury car tax threshold, and there would be many farmers who would be very happy with a car under the luxury car threshold that would do the business of the farming community and is not for those who are hanging off the industry, making huge profits at the expense of decent farmers in this country and driving around in their leather-seated, luxury four-wheel drives.

The opposition are adopting a belligerent, arrogant and destructive approach to the government’s budget. They have opposed the Medicare levy surcharge legislation, which would provide real relief to Australian working families. They have opposed the excise legislation and excise tariff amendments, which would ensure fairness in the taxation treatment of condensate. So on the one hand the ordinary working family in this country can get no tax relief from the Liberals—absolutely no tax relief—but, there you are, the Maserati drivers get looked after and BP, Chevron, BHP, Mitsui, Mitsubishi and Woodside Energy are looked after and are all very comfortable with the approach taken by the Liberals.

This is a situation that ordinary Australians will be appalled at when they dig under the rhetoric and nonsense being pursued by the Liberal Party—the errant nonsense, the rhetoric that means nothing other than that you have done nothing for 11½ years and you do not really care about the working families of this country. You do not care about the car workers of this country. I know a little bit about the car industry in this country, and for 11½ years the AMWU tried to get the Howard government to have a modern approach to the car industry that allowed it to develop for the future. But what did the Howard government do? It did absolutely nothing. It did nothing on the skill base for the industry, nothing on technology for the industry, nothing for research and development and nothing on innovation.

Those things are the real drivers of the car industry—and you have the hide to come into this place and tell us that you know what is good for the industry by opposing the luxury car tax. What a load of nonsense. Nothing displays your lack of understanding, your lack of caring and your lack of compassion for ordinary workers in this country than the nonsense that has been portrayed by the opposition during the last few days. This is an opposition that will do anything and say anything in support of what is a bizarre approach to taxation in this country, using fear tactics on ordinary workers out there who have already suffered from the Liberal Party’s incompetence on manufacturing. To now say to them: ‘We have been incompetent for 11½ years. We have done nothing for you for 11½ years, and if you let the Labor Party tax the Maserati drivers, the Lamborghini drivers, the Audi drivers and the BMW drivers then the industry will be under great stress and the industry will lose jobs,’ is an absolute nonsense.

For Senator Abetz to stand here and try and argue that he knows something about the car industry is an absolute joke. I do not know when the last time you were in a car plant was, but I would be happy to go down to a car plant with you and talk to some of the workers there about the real issues that they are worried about. They are worried about getting an industry policy that will save their jobs and they are worried about getting management systems and technology in place that will save their jobs for the future. They are so thankful that the Howard government was thrown out on its ear and that a government has come in with an industry minister prepared to listen to the workers in the industry and to develop a strategic policy that will build the industry for the future.

The car industry would not want to pay any tax if it could get away with it. Senator Abetz said in one of the Senate inquiries that we should pay no tax. I do not know how he gets that economic rationalist approach. It is one of the most stupid things I have ever heard from a supposed senior politician in all my time as an activist in public life. The car industry do not want to pay any tax. They are not the ones paying for public hospitals. They do not want to pay for education or for roads and they do not want to pay for infrastructure. Nor does the opposition want to allow this government to get its budget through to take this country forward on these issues.

Hypocrisy and fear is the hallmark of the Liberal Party in this place. I have never seen so much hypocrisy—standing up crying crocodile tears for farmers and their $90,000-odd air-conditioned four-wheel drives. Have you ever seen the like of it? They look after the Lamborghini drivers of this country. They look after the big end of town. They say, ‘Let’s not tax BP; let’s not tax Chevron.’ They let them get away with ripping our resources out and not paying appropriate tax. This is an opposition that have got absolutely no economic credibility in terms of industry policy and absolutely no credibility in terms of what they have been doing over the last few days.

This is a desperate opposition. They are desperate to try and do anything and say anything to give them some credibility with an Australian public who only recently threw them out of office for 11½ years of inaction on the big issues that count for the Australian public. Don’t come here telling us on this side about economic credentials when you set about trying to destroy our budget. Don’t come here lecturing us about the manufacturing industry. Don’t lecture us about the environment, because you were the most incompetent government with no vision. You left this country unprepared for the challenges that we are facing.

Opposition Senators:

Opposition senators interjecting—

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

All of the interjections, all of the noise and all of the feigned indignation cannot hide the fact that you did not build for the future. By trying to stop this budget you are simply compounding the problems that you brought to this nation. You deserve to be condemned for your approach. This is a government that is striving to make a better life for ordinary Australians. All you want to do is look after the big end of town, look after the Lamborghini drivers and not give ordinary Australians a fair go with the Medicare surcharge. You are an absolute disgrace. No amount of feigned anger or feigned anything will give the public any— (Time expired)

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

The Berlin Wall may well have fallen but the wall for logic clearly is still well and truly in place because it does not penetrate the mind of Senator Cameron. Logic is not something that is his strong suit. Indeed, he has come in here, given a 15-minute spray that should have been delivered during the second reading debate, marches in and marches out. He has already gone from the chamber and he expects us to take him seriously. In the hope that he might, in fact, read the Hansard can I tell him that one thing I have learned from time to time is that the amount of volume in a speech does not necessarily equate with the amount of evidence in a speech. Usually, the greater the volume required by the speaker, the less evidence he or she has to offer in relation to the matter under debate.

First of all, the good senator had the audacity to criticise me because he had not heard me speak in this place about the manufacturing sector in the past 10 years. Can I remind the honourable senator that he got in here on 1 July of this year. He has not been here for 10 years. He has not been here for five years. He has not even been here for one year. That is possibly why he has not heard me give all that many speeches—because he has only been in this place a very, very short period of time.

Of course, the fact that he has been here for such a very short period of time reminds me that he got in here over the politically dead body of Senator George Campbell, a former trade union official of the same union movement but who got dumped—for what reason? He had not supported the manufacturing sector sufficiently. So Senator Doug Cameron, having knifed off Senator George Campbell in a preselection battle, now comes in here and one of the first serious votes he casts is to do the workers in the industry he used to represent in the eye, in the hip pocket: to destroy their jobs. I suppose he thinks he had a bit of practice with former Senator George Campbell. He got him out of the job. He now wants to see if he can get some car workers out of a job. Might I say, unfortunately, I think he will succeed.

This great protector of workers’ rights, Senator Doug Cameron, would, I am sure, have been a Luddite all those years ago. He is critical that people out in outback Australia, where the temperatures get up to 40 and 50 degrees centigrade, have this outrageous luxury called air conditioning. I wonder how many of his workers he fought for to have air conditioning as standard in their vehicles as they drove around in outback Australia between mine sites et cetera? Air conditioning is now a standard requirement, and he still considers it a luxury. How far behind the times is this Senator Doug Cameron? And he is the modern face of the Australian Labor Party? He will tell everyone with a Hyundai Getz that has air conditioning, which is fitted standard, that they have a luxury motor vehicle. This is the test that is now being applied by the Australian Labor Party. The class warfare shown by Senator Cameron is something I had thought we had left behind with the collapse of the Berlin Wall and with the collapse of the politics of envy. But, no, Senator Cameron is desperately trying to breathe new life into it.

Seeing as the minister has not answered my previous question, I would like him to tell us how many Lamborghinis were sold in Australia last year. How many Porsches were sold? How many Rolls Royces were sold? How many LandCruisers were sold, how many Mitsubishi Pajeros were sold and how many Holden HSVs were sold? All of those will be subject to this luxury car tax. With Rollers, you might be lucky to have sold a dozen.

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

I’ll ask Malcolm.

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

The silly minister interjects and says he will ask Malcolm. I think that your own Prime Minister and Mr Garrett enjoy even greater wealth. But I congratulate them on that; I am not envious about Mr Rudd’s wealth or Mr Garrett’s wealth, unlike those opposite, who seem to be envious of Mr Turnbull’s wealth. I do not know why the Labor Party have this inbuilt jealousy, this chip on their shoulder. They cannot bear to think that somebody might have some wealth. But when they sit on the Labor side they conveniently forget that Messrs Garrett and Rudd have so much money.

In his rant, Senator Cameron referred to Audis as well. Hello! Under the amendment that was sponsored by the government and which we are discussing, guess which brand of motor vehicle is going to get the greatest exemptions: the Audis. The car that he ranted and raved about is exactly the one that is going to get the greatest benefit out of this government sponsored amendment. The poor gentleman does not even understand his own government’s legislation and the deal that has been done with the Greens, and yet he comes in here, trips himself up and, quite frankly, displays for all to see and hear his gross ignorance.

We are also told that somehow higher taxes on motor vehicles support the motor vehicle industry. Not even the AMWU, his former union, is making that assertion. Nobody is making that assertion. It is going to hurt the car industry—no ifs, no buts. There were four Australian car manufacturers when the Howard government left office; there are now only three. That was the great stewardship of Mr Carr. In fairness, it would have happened irrespective of who was in government, and that is why the pathetic blame game that Senator Cameron sought to engage is so inappropriate and irrelevant.

It was asserted that we had done nothing for the Australian car industry. If Senator Cameron had bothered to read the Bracks review, which was commissioned by his own government, he would have found that the ACIS was seen by car manufacturers as the most beneficial scheme that had come their way in a very long time. I am very proud that it was our government that implemented that scheme. It helped preserve and save many Australian jobs. It allowed the car industry to adjust to world pressures. But in ranting and raving about these international car companies—these multinationals—and how they can easily afford to pay tax, Senator Cameron overlooked the $35 million gift and photo opportunity for the most profitable car company in the world, Toyota. Once again, commentary on that was completely absent from Senator Cameron’s contribution.

I would be delighted if the minister could answer for us the questions that I asked previously. Also, how many Rolls Royces, Maseratis, Lamborghinis are sold in Australia in comparison to cars such as the Holden Statesman, the Toyota Orion, the Fords and others that are in the luxury car bracket as well? Has the government modelled the impact of this measure on the Australian car industry? Has the Australian government consulted with the car industry, let alone with the unions, about this measure? What will its amendment cost each year? How many models will be exempted, what will they be and how many of each of those models are sold each year? Once we start getting some answers, we might be able to progress the debate.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

It is interesting to hear Senator Abetz describing Senator Cameron as old-fashioned. In fact, I would have thought Senator Cameron is rather cutting-edge given that the Bush administration has just defied the capitalist ethic and bailed out, in what can only be described as a public purse rescue, the corporate sector with billions and billions of dollars. I have not heard too much about ‘let the market operate by itself’, ‘small government’ or ‘no regulation’. I have not heard any of that! I have heard instead: ‘What’s the government doing to shore everything up?’ That is a legitimate question but, at a time when the extreme capitalism that was practised by the former Howard government—let the market rule; government get out of the way; small regulation—is suddenly in a state of complete collapse and the ideology that underpinned it is in collapse, the views of someone like Senator Cameron represent the reality of what is going on at the moment. So whilst you might say that the Berlin Wall has fallen, it is Wall Street that has fallen and it is your ideology that has fallen into a state of collapse.

However, that is not what I rose to comment about. Senator Abetz does provide some options to comment on these matters from time to time. The other thing I am delighted about is that Senator Abetz is now taking an interest in climate change and carbon dioxide emissions. However, it is a bit unfortunate that he chose to show off his new-found knowledge by quoting Euro 5 standard because Euro 5 standard is actually a non-CO2 fuel emission standard. So saying it is old-fashioned in terms of climate or fuel consumption is an interesting way of putting it because it is not a greenhouse gas standard; it is a standard about particulate matter and smog type emissions and not carbon dioxide emissions.

I say to the opposition, who are now suddenly interested in what the Europeans are doing, that in fact the Europeans set themselves a voluntary standard of 140 grams of CO2 per kilometre some years ago. However, their current average new car standard has got to about 160 grams of CO2 per kilometre. It has been recognised that that is not moving fast enough towards the voluntary standard of 140 grams and so in late 2006 the European Commission worked towards proposing a legally binding standard, which they then did on 7 February 2007. That says that the European Union must adhere to a standard which limits CO2 to 120 grams per kilometre. That is a very, very stringent standard which virtually no cars can currently meet. So several car manufacturers in Europe are in somewhat of a spin trying to work out how to get down to that low level of emissions.

But now that I know that the coalition supports the standard of 120 grams of CO2 per kilometre I am really pleased because we can move for similar standards here in Australia. I really welcome that level of support. Having said that, I recognise that new cars in Europe are achieving about 160 grams per kilometre, with a voluntary standard of 140 grams per kilometre working towards a compulsory standard of 120 grams. I note that the vehicles that we are exempting here in this particular amendment average about 155 grams of CO2 per kilometre. I am not saying that that is perfect; in fact, I agree with Senator Abetz that we should be getting down to 120 grams per kilometre as soon as possible. I am inclined now to move for that standard knowing that I will get the support of the coalition because they are keen to see our greenhouse gas emissions moved to such a stringent standard. In the meantime, I am very happy that we have been able to strike a standard between what the average new European car is achieving and the voluntary standard that they are aiming to get to. Recognising how far behind the eight ball we are in Australia because for 10 years the coalition did nothing on fuel efficiency, nothing on carbon dioxide emissions, you can hardly expect the Australian market to be getting to 120 grams as fast as that, but I would love to see it happen. I am encouraged that the opposition supports that so I will be looking forward to moving on that at a later time.

I am very pleased about that and also because I now know that Senator Abetz supports Euro 5 standard for smog. That would be terrific for Sydney and Melbourne as well. I am really keen now that I know that I have the numbers in the parliament here to move on these really stringent emission standards for CO2 and non-CO2 emissions. It can only be great for air quality in our cities. I look forward to having that level of support in the future. I am sorry to have disappointed the opposition by not moving for more stringent standards on this occasion but I think I am being more than reasonable in exempting the vehicles that we are exempting. And I remind the Senate that while Senator Abetz is asking, ‘Which vehicles will be exempted?’ they are exactly the same vehicles that he wants exempted from the luxury car tax except it is not very many of them. He wants all of the vehicles over $57,000 exempt from the increase in the luxury car tax—every single one of them.

We have a consistent philosophical position on greenhouse gas emissions, on fuel efficiency, on Australian vehicle manufacturing and on everything from putting money into supporting the development of the Australian car manufacturing industries to green standards, to green cars, to bringing that through the tax system, to creating incentives to drive people’s behaviour to buy these fuel-efficient cars, to changing government procurement policies so that the government purchases the green cars that we then make. That will accelerate their take-up in the second-hand market. We all know that the taxi market is largely able to source its vehicles as a result of the turnover from government corporate fleets. That way we will radically improve the vehicle fuel efficiency of the Australian fleet and of CO2 emissions over time. At the same time that will give people the permanent rest they need, the permanent shielding they need, from the underlying increase in the oil price, which is going to flow through to increased petrol prices.

So the faster we get onto green cars the better off we are all going to be environmentally and in terms of our pockets, because I think that as people pull up at the petrol pump and fill up watching that oil price go up, as it is doing, they will be wishing that their car had much better vehicle fuel efficiency, and as they watch the carbon price go up they will be wishing that their vehicle had significantly reduced CO2 emissions. This is about not only CO2 but peak oil. It is about recognising the need to drive less and, when you do drive, driving more efficiently. It is also about saying that, unless we drive the Australian car manufacturing sector to be globally competitive and recognise that that competition is in the context of smaller, cheaper and more efficient cars, then we are not going to get very far.

I would also inform the Senate that, with the Europeans having now set CO2 emissions at 120 grams per kilometre as the target in Europe, there are some environmental groups arguing that that needs to go to double the fuel efficiency over the next decade. They are arguing for 80 grams per kilometre by 2020. Bear in mind what I am saying at the moment, that new cars in Europe are about 160 grams per kilometre. So the environment movement in Europe is saying, ‘Let’s halve that,’ by 2020.

That is how fast other places in the world are moving in terms of campaigning for such significant increases in fuel efficiency and greenhouse gas reductions. We have to ask ourselves: how long can Australia compete unless we get onto exactly the same footing? That is where the $500 million for the green car fund and the Bracks review recommendation that that go to $1 billion ought to be supported. You will never prop up the Australian car industry by creating a subsidised market through government procurement and subsidising those factories. It is unsustainable into the future unless there is a market for those cars beyond just the government and fleet market. That is just not sustainable for vehicle manufacture and that is why they are in so much trouble at the moment. If you are serious about creating jobs in Australia and keeping car manufacturing, then those car manufacturers have to make the cars which people want to buy and which can be exported overseas as well. That is where we need to be going and that is why this is a very sensible amendment. It is about putting a signal into the market that that is the direction we need to take.

That is what this is about, whereas the opposition does not want to support any rise in the luxury car tax. I have not heard them support one single revenue-raising measure, but I have heard them come up with endless ways to spend money. So if you do not support revenue-raising measures but you support all the increased expenditure including the taxation and you do not support getting rid of the surplus, I would like to ask: where is the money going to come from? In opposing this increase in the luxury car tax and having no philosophical reason of any kind for that other than saying that we should not be asking people to pay more, Senator Abetz should tell us whether he supports reducing the surplus to pay for the pension increase and whatever else. How does he intend to raise the money? I think that we have not actually heard from the coalition where the money is going to come from and I think that in order to have integrity about how to spend money you have to be able to say what you would be prepared to do to raise money.

The Greens stood up in here and opposed the tax cuts when everybody else supported them. We said that we wanted that money for health and education and pensions and the like, and we copped a lot of political flak for saying that we did not support tax cuts. That is the position we took and it is a position of integrity. It was not one that people agreed with in terms of how people voted in here, though I think the community probably agreed with it. But, nevertheless, we were prepared to say that that is where we would have the money to spend—on pensions and public schools and public health. So I put to the coalition: instead of the grandstanding that has been going on, if they do not support a tax measure like this, where do they suggest we take the money from to be able to spend it on the pensions and the other expenditure measures which they have been touting in recent weeks?

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

I would like to put a bit of definition into this debate, because Senator Milne has been spraying everywhere from schools and education to tax and so forth. Today we are debating the amendment that the Greens are proposing. The government is agreeing to it because it needs their vote, and, as Senator Cameron has said, the government has accommodated the Greens and Senator Fielding and Senator Xenophon. Really, the only people they have not accommodated are the workers that are employed in these factories that are going to lose 10 per cent of their production. Like Senator Cameron, I have been involved in manufacturing and I know for a fact that all the profit is held in that last 10 per cent and if you just go and knock the top 10 per cent off any factory’s profits it is going to have dire consequences.

The real definition of this proposal that is coming forward is that we are going to tax the workhorses of Australia—the Nissan Patrols, the Toyota LandCruisers and the Land Rovers—that people need out in the west and we are going to allow in Audis, Alfa Romeos, BMWs, Jaguars, Saabs and a few of those other cars that the superwealthy use around the metropolitan areas.

Senator Cameron says, ‘Farmers don’t need these big four-wheel drive cars.’ That is an absolute nonsense. And if they have the audacity to put air-conditioning in them, when it happens to be 40 degrees in the shade out there, that is just a complete waste of money—you should go around in a car with your wife and family and fry! This is stupid. We are going to let all these expensive, highly-prized cars in but destroy 10 per cent of Australian car manufacturing—and we think it is not going to have any repercussions. There is no question about this. If you take 10 per cent—I think it actually works out at a bit more, let us say 11 per cent—of the cars manufactured in Australia, you are going to affect jobs as a consequence. Senator Cameron does not seem to worry about that. He has been in the manufacturing industry long enough to know that if you tax a product like this then you will tax it out of the market, and we are going to tax 10 or 11 per cent of Australian made cars out of the market.

It is not a luxury to have a four-wheel drive in the regional areas of Australia. They are not a luxury; they are an absolute necessity. They are something that everybody needs and everyone uses. Just the other day I was talking to Bruce Scott, the member for Maranoa. He said that one of his staffers was driving, got into a skid on a gravel road and ploughed into a tree. He said, ‘If I had not had that Land Rover—I think it was a Toyota LandCruiser—I would have been in terrible trouble.’ I have mentioned this before. Members of parliament have lost their wives through road accidents. Mr Cowan and Mr Hicks both lost their wives this way. John Anderson’s wife rolled a Volvo over seven times. Tim Fischer was in an accident where two people were killed. The government then made a decision that everyone who had big electorates—and it was a Labor government that made that decision—had to have a Toyota or a four-wheel drive. That was not because they wanted to see the local member swanning around in a luxury vehicle but rather because it was the only way that the government could guarantee the members and their families a safe way to travel around the electorate.

It is not just a question of driving around the farm in these vehicles. These are people movers. Parents drive them to take the kids to football, and football might be at the next town 50 kilometres away. Parents drive them to take the kids to swimming at the nearest town with a pool, which could be 30 kilometres away. We heard Senator Cameron come in here and condemn farmers for having a safe means of transport. It just shows that he does not understand what happens in regional and rural Australia. He has challenged Senator Abetz to go to a car manufacturer with him. Well, I challenge him to come out west and stand outside the town hall or the shopping centre and count the number of four-wheel drives. They are not owned by wealthy farmers—some of them would be owned by farmers but many of them would be owned by the workers around the area such as vets, nurses, doctors, windmill experts and people who work on the properties. What this is doing is saying, ‘You can drive a Volvo, an Alfa Romeo or an Audi out there but do not drive a four-wheel drive.’

These four-wheel drives are designed and made for rural and regional Australia, and the tax on these is going to penalise people—not the farmers, because they have been excluded, but the rest of the people out there. I would expect that there would be many more people driving these vehicles out there than just farmers. Senator Milne says, ‘It’s a good idea. We’ve got to encourage people to drive these Audis because they have some sort of a fuel mileage advantage.’ It may work in the metropolitan areas, but the idea of bringing in these very expensive imported cars—when you are penalising the workhorses of Australia, penalising the cars that are manufactured in Australia and knocking off 10 or 11 per cent of the cars that are manufactured in Australia—will only end in tears when people lose their jobs.

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

If the minister is going to answer some questions, that would be great.

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

Thank you, Senator Abetz. I would like to indicate that I have the list that I think you were asking for before. The Audi A4, the Alfa Romeo 159 Sportswagon, the BMW 3 Series, the BMW X3, the Jaguar X-Type, the Mercedes-Benz C Class, the Saab Sports sedan, the Saab SportCombi and the BMW 5 Series have a reduced LCT payable.

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

Could you table that list, please?

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

I would have to get it retyped. It is just a sort of scribbled list. I am happy to see what I can do to facilitate that. You asked about the second reading amendment which was circulated with an extra part on it a little earlier. The revised amendment was required because it would have clashed with Senator Xenophon’s amendment. So there was a need to add an extra phrase.

You asked how many cars were sold that are now under the threshold. The information on the degree of model specification required to respond to one of your questions is not publicly available. So we do not have some of that information, but this is about providing an incentive for the future. You also asked what the government amendments say for each model. It will vary. The saving will depend on whether the car is above or below the threshold. An itemised list is not available at this time. We will see if we can find some information to add to that, if it is possible in the available time. I hope that covers all the questions that you asked.

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

We do not have, according to the minister, the number of vehicles sold in this particular category. We have just had to suffer a lecture on economic stewardship from Senator Milne. If we do not know how many cars are impacted—how many cars are sold in those categories—can the minister advise how he was able to tell us in the explanatory memorandum that the impact of this would be $8.5 million? Where was the modelling done? How did we make this analysis if we do not know the number of motor vehicles that will be impacted by this measure?

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

As I indicated, this information is not publicly available.

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

That makes my case even stronger. Thank you very much, Minister. The information is not publicly available but somehow the government has it. Is that what you are telling us? It is secret government information not to be made available to the public? Is that what you are telling us?

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

As you know, the modelling that Treasury does is not normally released. It was never released under your government, and we are simply following the well-worn practices you are more than familiar with, Senator Abetz.

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

I fully agree with that, but what it highlights and shows is that the Labor Party spent 11½ years in opposition claiming cover-up and lack of transparency in this place and as soon as they got onto the treasury bench they adopted our very approach. What it shows is that there was duplicity and a forked tongue that were being exercised each time they demanded our modelling.

I asked whether modelling had been done. I have not actually asked for the modelling. I asked for the actual numbers of motor vehicles in each category that were sold and would be impacted by this measure, because surely that is the basis on which the statement is made in the explanatory memorandum as to the cost to revenue. In 2008-09, the government tells us it is going to cost us $8.5 million; in 2009-10, $9.2 million, then $10.1 million, then $11 million. That is $38.8 million. It rolls off the lips very easily. We are told that we were hugely economically irresponsible for wanting to minimise the tax impact. But we now have a $38.8 million measure. How was that calculated in the explanatory memorandum if we do not know how many motor vehicles were sold in the category? Were the figures just plucked out of thin air?

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

As I have indicated, Senator Abetz, the information is not publicly available. We do not normally provide either the data or the model, and that is entirely consistent with the practice of the previous government.

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

But the government has been ranting, especially in the other place—and now Senator Cameron after about a fortnight has cottoned on to what occurs in the other place—about this protecting Lamborghini owners and Porsche owners et cetera. Surely the government must have some information available to it as to how many Lamborghinis and Rolls Royces were sold in Australia last year to see if the arguments put forward by the Prime Minister and the Treasurer are true. I think we know that they are quite the opposite.

Surely for them to be able to make the arguments that they have sought at question time, they must have information available to them? Or is it a case of: ‘I’ve got the information but I’m not going to share it with you, therefore you have to trust us. Believe us. We are from the government. I am Kevin 747. Believe me.’ On what basis were you able to convince the crossbenchers of the integrity of that analysis? Did they ask for it or did they just swallow it? We really are concerned about the robustness of the information on page 1 of the explanatory memorandum, headed ‘General outline and financial impact’. It seeks to assert a financial impact, but we are told that the figures are not even available for the numbers of cars sold. Where did these figures come from?

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

The price of vehicles, as Senator Abetz well knows, is publicly available. I am pleased to see that the member for Wentworth’s habits are catching on already—he likes to quote himself, and Senator Abetz likes to ask himself questions. As I said, and maybe you misheard, the data that goes into the Treasury modelling is not publicly available. I do not think I can be clearer than that, Senator Abetz. I do not think it is a deceptive answer; I am simply making the point that the model itself and the data that goes into the modelling are not publicly available.

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

That was very opaque, and as a result the government clearly could not have shared that information with the crossbenchers, so they just lapped it up hoping that it was right but without any guarantee as to the integrity or robustness of it. Minister, are you aware of how many Australian models will be exempted under this proposal?

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

Could you repeat the question to clarify it? We just want to make sure we get you the right answer.

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

You want me to repeat it? Of course. How many Australian models and how many Australian vehicles will benefit from the exemption in this amendment?

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

Is this the Greens amendment?

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

The Greens amendment! It is, in fact, the government sponsored amendment, Minister, just allow me to remind you. The closeness between Labor and the Greens is growing, which is nice to see!

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

I just wanted to clarify.

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

Yes, that is the one.

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

At present we believe the answer is none.

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

That is what I thought, and that will be of great comfort to all those members of the AMWU who used to be represented by Senator Doug Cameron, no doubt. Now can you tell us: what is the emissions rate of LandCruisers, which the government will be exempting with the Family First amendment? Sorry, I may have said ‘emissions’; I meant to say ‘fuel efficiency’ because you are measuring it by litres per 100 kilometres. It is a bad measure, but that is the measure you are using.

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

Could you just run through the question again?

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

I am of the strong belief that if you have a measure such as this it should be of the emissions that we are concerned about, but I accept that, for the purposes of the current government amendment, we are talking about vehicles that consume seven litres per 100 kilometres or less. I understand the government is also supporting a Family First amendment which will exempt four-wheel drives, and I wonder how many litres per 100 kilometres they might consume.

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

They consume nine litres and above, roughly.

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

They range from nine and above—to what level? I think we might be getting up to 14 litres, but please confirm that.

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

The officials are just seeking that information for you, Senator Abetz. If you already know the answer perhaps you might want to enlighten us, so that we can keep this rolling for you.

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

Whilst the minister is finding that answer, possibly if he looked on the page and saw a figure that said 14.5 litres—

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

14.5.

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

Yes, well done! Here we have a situation where the government are saying, ‘Fuel consumption, bad; therefore we will give tax relief to any vehicle that has seven litres or less fuel consumption.’ Then, all of a sudden, ‘High fuel consumption in four-wheel drives, good. They’re also deserving of a tax exemption though they consume twice the seven-litre threshold.’ Indeed, they consume up to 14.5 litres. So those listening in might ask, ‘How is this logical? How is this consistent? How can you come up with such a policy mishmash?’ It is easy: it is the Rudd Labor government not interested in sound policy but in stitching up deals—first one with the Greens, then one with Family First. What does it matter that the deals are inconsistent? I then ask: can the minister confirm that the only technology to benefit by this government amendment will, in fact, be diesel technology?

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

We do not have that information readily at hand. While this debate goes on we will see if we can get any further information on that. You might want to reveal the extent of your knowledge on it, to assist the debate.

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

I think if the officials find ‘only diesel’ on a page somewhere, that might be the correct answer. I think I should be getting at least half your stipend, Minister, for assisting you in this committee stage! Let’s move on. Can the minister also advise whether all the motor vehicles that are going to be exempted—these imported motor vehicles with diesel technology—are all fitted with a turbo type of technology?

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

That is not information that we have readily at hand. We are happy to seek it and provide it, if we are able to do so, before the completion of the debate.

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

The importance of that is that some states have legislation which specifically bans learner drivers and P-plate drivers from driving turbo-charged motor vehicles. It is a pity that Senator Fielding is not in here—and I accept that he cannot be everywhere at a particular time, so I am not being critical—because I would have thought that supporting an amendment such as this would be very unfriendly for those families that can afford only one car and in fact will use that car to teach their kids how to drive. They will not be able to use that motor vehicle and, once their child gets their licence, their child will not be able to use that car to pick up younger siblings. You will be forcing those people to buy a higher priced motor vehicle—let us hope that they buy Australian at least. The tax benefits that you are providing will not be for those families that require a motor vehicle for teaching their children to drive and then for the children to use that vehicle later on to pick up other family members. Do we have any progress on those other matters as yet, Minister?

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

Not at this stage.

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

I do have a few more questions that I would like to put to the minister. What is the overall inflationary impact going to be of this total measure and then by how much will it be reduced by the two exemptions that the government seems to have agreed to with the Greens and Family First?

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

I think we had some discussion earlier in the day, Senator Abetz. A one-off price movement is what is happening here. I am advised that the specific information that you have requested is not readily at hand. If it is able to be made available to you in the required time, we will endeavour to do so.

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

This amendment is not a very well researched proposition, quite clearly. Did the government consult with the Australian car industry prior to the luxury car tax announcement and subsequently over this amendment that is before us?

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

No and no.

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

Did the union—it may as well have been. Did the former union officials, now the government, consult with the AMWU about these tax measures, either the luxury car tax initially or the amendments that are before us this evening?

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

No.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I thought I would assist the committee. Senator Abetz was feigning grave concern a moment ago about families driving turbo-charged vehicles. The cars Senator Abetz is talking about are made in Australia—the Ford Falcon G6E, Territory Ghia Turbo and Ford performance vehicles. So the very cars he wants to exempt altogether are cars in that high-performance category that are made in Australia.

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

Yes, but as a result of Senator Milne’s amendment, which was brought in under the guise of a government amendment—I think the government gave it away that it was in fact a Greens amendment, and I thank the minister for that rare moment of transparency with us this evening—the turbo-charged vehicles are now going to become cheaper relative to your normal Ford Territory, Commodore et cetera. That was the point that I was seeking to make.

I want to inquire about the secret costings—I must say I am not sure that there is anything really secret about them. They seem very rubbery to me and there is a lack of explanation about them. Are we at least allowed to know whether they were based on predicted car sales—that car sales will go up or down—over the next four-year budget period?

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

My understanding is that they are based on predicted car sales. I do enjoy the theatre of your performance, Senator Abetz. On the one hand the figures are secret and not being disclosed—mock horror!—and, on the other hand, they are as rubbery as anything and do not exist—mock horror! I am enjoying the performance.

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

I assumed that they would be predicted figures, but I was asking whether the prediction was predicated on increased car sales or reduced car sales over the forward projection of four years that is referred to in the explanatory memorandum.

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

That information is not handy right at this moment. I am happy again to facilitate providing the information, if it is available, at the earliest opportunity.

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

So the only information that is readily to hand is that you have stitched up a deal between the Greens and Labor, and between Family First and Labor. There has been no consultation with the car industry and no consultation with the unions. We do not know whether you are predicting car sales to increase or to decrease over the forward period of four years. This, I must say, is very, very sloppy. Whilst it would be nice to personally blame Senator Conroy for it, I know he is only representing the Treasurer, and the person that should bear the burden of this dearth of information is in fact the Treasurer, Mr Swan.

The latest figures indicate that demand for motor vehicles in the luxury car bracket over the $57,180 threshold has fallen by about 19 per cent. That is, without exaggerating, if you round up the 19 per cent to 20 per cent, a reduction of one-fifth. That is substantial in anybody’s language. I wonder whether the Treasury modelling—that, of course, has to be kept secret—took into account the huge impact that this ill-considered measure would have on car sales and on revenue streams. In particular, I wonder whether the government did any modelling on its impact on the Australian car-manufacturing sector.

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

Thank you, Senator Abetz. We are going to confirm as much of that information as we can for you and to get back to you as soon as we are able.

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

If you were a betting man, would you say ‘no’ to everything? The government has clearly not done its homework or its research. I think, in all fairness, that we might want to move to a vote on this particular amendment relatively soon. The problem is that what I would have thought was very basic information is simply not to hand. When we oppose this legislation we are accused of being economic vandals but, when we probe the background to this information, we find that there is no evidence available at all to support what the government is doing, other than that we know this is an inflationary measure designed to fight inflation. That is about the only answer that we have been able to get out of the government: they have introduced this to fight inflation and they accept that it is going to have a one-off inflationary effect. In response to any other question we ask, they simply do not have the information available. Can I just remind Senator Conroy and listeners—and I do not blame Senator Conroy personally, because this is the responsibility of Mr Swan and Mr Rudd—that this is what happens when you make policy on the run, rather than being concerned about the substantive issues of the day. This is what happens when you prefer spin over substance. When people start asking questions about the spin, they find that there is no substance. I suggest that we move to the vote.

Question put:

That the request (Senator Conroy’s) be agreed to.

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

It is disappointing that the Australian car industry now faces an even bleaker future as a result of that request for an amendment that has just been carried. But to try to relieve the burden on the Australian car industry the opposition believes that the indexation of the threshold should be put on a more realistic footing. A realistic footing would be to ensure that the motor vehicle luxury car tax threshold would be indexed according to normal consumer price index movements, as opposed to the CPIMV.

I should have indicated, Madam Temporary Chairman, that we are withdrawing opposition request (4) because that clearly is no longer tenable but we have another version which is now request (1) on sheet 5601, and that is the request that I am seeking to move now before the committee—my apologies for not clearing that up earlier. 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  Subsection 25-1(3)

Repeal the subsection, substitute:

        (3)    The luxury car tax threshold for the 2008-09 financial year is $57,180.

        (4)    The threshold referred to in subsection (3) is indexed for each year of tax after the year of tax commencing on 1 July 2008 in accordance with the CPI indexation method provided for by Subdivision 960-M of the *ITAA 1997, calculated using the index number referred to in subsection 960-280(1) of that Act.

What has happened is that since this luxury car tax was introduced, under the Hawke-Keating regime, and then it was continued, it has been indexed by a mechanism called the CPIMV, or the consumer price index related to motor vehicles. This unfortunately did not take into account the actual increase in the cost of cars, and it is interesting that the report by the Senate economics committee showed that there has been substantial bracket creep. When the luxury car tax concept was first considered, it covered about 2.5 per cent of motor vehicles; today, it covers about 12 per cent, five times as many motor vehicles as when it started. We note, for example, that a Toyota Prado, now $66,874; a Toyota Tarago, at $64,887; a Mitsubishi Pajero, at $64,447; a Ford Territory, at $62,657; and a Nissan Patrol, at $62,116 all now fall into the luxury car tax bracket, whereas if there had been proper indexation that would not have occurred.

What we are suggesting to the Senate, to ensure that bracket creep no longer has this sort of impact, is that we provide a mechanism for indexation which will ensure that there is some equity. Indeed, the Senate economics committee received evidence that, if there were not going to be proper indexation, ‘up to half of all motor vehicles sold in Australia will be subject to the luxury car tax by 2030’. Now, I would have thought—even with Senator Doug Cameron’s warped view of the world—that that would be seen as quite extreme and therefore we clearly need a mechanism which will ensure that 50 per cent of motor vehicles sold in the Australian marketplace are not categorised as luxury vehicles by the year 2030. The time to fix this is now, and that is why we are putting this proposal to the Senate this evening. I understand it is a proposal that is being opposed by the government, which once again confirms they are not about fairness, they are not about equity; they are concerned about a tax grab, an unconscionable tax grab, where people will now be paying 43 per cent tax on any motor vehicle purchased.

Before the dinner break, I was canvassing opposition request for amendment 1 on sheet 5601 to add an item to deal with the indexation of thresholds. The luxury car tax concept, when it was first considered, covered some 2.5 per cent of motor vehicles sold in Australia. Today it covers about five times that number, around the 11 per cent to 12 per cent mark. Industry indications are that, unless we have a proper indexation mechanism by the year 2030, 50 per cent of motor vehicles sold in Australia will be considered luxury cars. Clearly the current indexation methodology does not work and is unsatisfactory.

As a result, we as an opposition are suggesting to the government and to independent senators that consideration be given to indexing this threshold on the basis of the consumer price index as opposed to some undoubtedly spectacular formula that somebody thought of, which is the consumer price index for motor vehicles—the CPIMV. The Senate committee report canvasses these matters quite well. If you have a look at the cost of, say, a ‘family 6’—a very popular type of Australian motor vehicle—you will see that it clearly has exceeded the CPIMV. If you have a look at average weekly earnings, you will see they have considerably exceeded the CPIMV. The CPI has considerably exceeded the CPIMV. The CPIMV does not reflect the increase in prices actually paid for cars and that is why we now have a situation where it covers five times as many cars as when it was first considered. So we believe that the luxury car tax threshold should be adjusted on an annual basis in line with the consumer price index.

Senator Fielding was right in his speech in the second reading debate the first time around that this is nothing but a tax grab. If the government wanted to dress this up with even a fig leaf of responsible taxation, they would introduce a proper indexation mechanism. That is what we are suggesting.

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

Did you ever do any indexing?

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

Senator Conroy asks if we ever indexed them. Yes, we had the CPIMV but, unlike Senator Conroy at question time today when he clearly made a mistake and was unable to recognise it because pride gets in the way with those opposite, we are willing to say that we in fact wanted another term in government because all our business had not been finished. There were other matters that we had to address, and clearly the luxury car tax was one of those things that needed to be addressed. It came to our attention because of this tax slug.

Let us just remember this: the motor vehicles that will be affected will now be subject to 10 per cent GST, 25 per cent luxury car tax plus an eight per cent luxury car tax surcharge. Whilst some of those are cumulative, if you just add up the straight percentages you have a 43 per cent tax rate on that part of motor vehicles that are priced above $57,180. The government believes that this is vitally important; yet, is there such a thing as a luxury tax on a private jet, a private yacht or a $200,000 Rolex watch? No. But, on the automotive sector, there will be.

We believe that there needs to be an adjustment. Did we deal with it when we were in government? No, we did not. Should we have? Absolutely. Was the Howard government perfect? No, it was not. But, you see, we are willing to acknowledge some of our shortcomings, unlike the arrogance of Mr Rudd and Mr Swan, now being echoed by Senator Conroy, who believe that they never make mistakes and do not overlook things. The simple fact is that we are willing to acknowledge that we could have done things better. But I will just remind Senator Conroy that the huge legacy of $96 billion of Labor debt was only finally paid off in April 2006. So we needed a lot of revenue streams, even if we did not necessarily like them, to help pay off this great intergenerational injustice that the Hawke-Keating era left for the Howard-Costello era to fix up. After April 2006, we were able to turn our minds to some tax deductions. We did so, and it was nice to see Mr Rudd embrace them and say, ‘Me too,’ during the last election.

Coming back to the point at hand, we do need a more appropriate indexation mechanism for the luxury car tax so that bracket creep does not get us to a situation where—and the evidence on this is undisputed—within a couple of decades 50 per cent of all vehicles sold in Australia will be subject to the luxury car tax.

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

When I was first looking at this bill, I thought that it was the appropriate thing to do to index the threshold at CPI rather than CPIMV immediately. I did speak to the Treasurer’s office about this, and their advice was that it would cost in the region of $400 million over the forward estimates, which seemed to be an extraordinary figure to me. I am grateful to the Treasurer’s office for giving me further information on this. My position, in a nutshell, is that there ought to be indexation at some point in the future to draw a line in the sand, but to do so at this stage would blow a $400 million hole in this measure, and I want—

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

Senator Conroy interjecting—

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

Senator Conroy looks horrified. I think it is important that we put this—

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Just carry on, Senator.

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

Thank you, Mr Chairman. I am still not used to Senator Conroy’s looks of horror, but I will be immune to them sooner rather than later. In relation to this issue, to me the dilemma from a policy point of view is this: the CPIMV is a standard which has been used for many years and it does not reflect ordinary cost of living increases as evidenced by the CPI. The problem is, as I understand it, that the CPIMV works on the basis that there are technological advances to vehicles. The CPIMV takes that into account. But the contrary argument is that it does not keep pace with inflation, and one of my concerns has been—and I am referring to the Senate committee report on this—that in 1986 the luxury car tax applied to 4.5 per cent of light vehicles and in 2007 it applied to 12 per cent.

I did receive a comprehensive response yesterday from the Treasurer’s office which I would like to share with my fellow senators. I think it is appropriate to basically precis it quite thoroughly. The response from the Treasurer’s office says:

While we do not have data to verify the 1986 figure—

that is, of around 4.5 per cent—

we can verify that the percentage of luxury cars, as a percentage of all passenger cars sold, was around 12 per cent in 2007.

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.

The data we do have is based on the proportion of cars purchased that are above the threshold.

There are a number of reasons why the percentage of luxury cars purchased may have increased over time other than because of movements in the luxury car tax threshold. These include:

• As incomes rise, there is likely to be an increase in demand for luxury goods, including cars. For example, in 1979 it took 1.6 years of Male Total Average Weekly Earnings to purchase a car that was priced at the threshold. Today it takes only one year.
• The price of vehicles relative to other goods has fallen significantly as a result of tariff cuts for cars and the introduction of the GST in 2000.

That is something that I think Senator Abetz can take some partial credit for.

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

No-one ever gives him any credit for anything!

The Temporary Chairman:

Order, Senator.

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

Mr Chair, I am trying to be generous. It is my nature to be generous, in a very bipartisan way. The response from the Treasurer’s office continued:

Because of these other factors the movement in the luxury car tax threshold will not therefore be sufficient to predict the number of luxury cars sold in the future and what percentage this represents compared to all passenger car sales.

While the many variables (especially car prices for many scores of different models) make it impossible to predict with any accuracy what proportion of cars will be captured by the luxury car tax in the future, I would add that the effect of the amendment to increase the threshold for more fuel efficient cars will have the effect of reducing the proportion of cars captured by the LCT as cars become more efficient over time.

The point is also made that:

The LCT threshold is indexed by the motor vehicle purchase component of the CPI, rather than the CPI itself, because it is an indicator of the changing price levels of a representative group of both imported and domestic vehicles purchased by consumers.

This index has been used in the tax law by successive governments since 1979.

There have been times since 1979 when the motor vehicle purchase component rose faster than the CPI—between 1987 and 1989 it rose broadly around twice as fast as the Consumer Price Index. When this has occurred, the LCT threshold has risen faster than it would have had it been indexed to the CPI.

It goes on to say:

The tax law also ensures that if the index of the motor vehicle purchase component of the Consumer Price Index declines over any year the luxury car tax threshold is not reduced but stays the same.

The increase in the number of luxury cars purchased over time will also reflect the overall demand for luxury cars. As incomes rise, there is likely to be an increase in demand for luxury goods, including cars.

The final paragraph of the email from the Treasurer’s office states:

We have undertaken a formal costing for indexing the threshold to the CPI from 1 July 2009. This is estimated to be $365 million over the forward estimates.

I wanted to read virtually the entire email so that it is completely in context. I have not taken out what I thought would strengthen any argument. I wanted the advice from the Treasurer’s office to be in its complete context, and I am grateful for that advice.

I am concerned about the budgetary impact in terms of the forward estimates. It does seem a very high amount, but I accept in good faith the figures given by the Treasurer’s office. However, I think it is important that at some point in the future a line is drawn in the sand, and that is why I will subsequently be moving an amendment to have CPI indexation or a sunset clause in respect of this from the end of the forward estimates—the 2012-13 financial year. That to me seems to be a more cautious approach, but it still makes the point that there ought to be a line drawn in the sand in respect of this. I would be grateful if the minister could provide confirmation that the Henry review of taxation will be looking at the specific issue of indexation.

In summary, I cannot support the amendment of Senator Abetz, but I will move an alternative amendment to deal with the issue of indexation through a sunset clause, with a fallback position, in the absence of this matter being dealt with satisfactorily by the parliament, of Senator Abetz’s position, albeit at the end of the forward estimates period.

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

If the minister is not going to give Senator Xenophon the courtesy of an answer, I commend Senator Xenophon for at least providing us with more information on this issue than the minister himself was prepared to give the Senate. It just shows the sort of contempt with which Senator Conroy and the Labor Party are treating this Senate. They will provide secret information to Independent senators, but when similar questions are asked by opposition senators in the open forum—

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

Mr Temporary Chairman, on a point of order: I want to clarify something. Senator Abetz suggests that there was secret information. It was never my intention or the government’s intention for it to be secret. I only read the email this morning, and I have been open with the Senate in disclosing that. There was no question of it being secret.

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator Xenophon. We have that now.

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

A very fair point. I should withdraw the word ‘secret’ and say it was provided privately, because that is what has occurred. When we ask for this information it is not available and is not offered to us, but when they are desperate to get the vote of Independents they are willing to give them private briefings and provide them with more information than they are willing to provide to this Senate chamber. The unfortunate thing for Senator Xenophon—and it is disappointing, because I thought one of his roles in this place was to try to keep the government honest—is that he has been told by the government that it is going to cost $400 million and he says, ‘I’m going to accept that at face value.’ That is his right. He is a new senator in this place. I reckon that in a few months time he will learn by bitter experience not to take that sort of information at face value—because, if you were to take this whole luxury car tax proposal at face value, the government says it is to fight inflation. That is the only reason given for it—to fight inflation—yet they themselves now acknowledge that it will be inflationary, albeit negligibly so. I concede and accept that, but there is no way that you can make out the argument that this is somehow anti-inflationary. So I say to Senator Xenophon and other Independents: just because the government says something, do not accept it at face value; question, probe and see whether the substance matches the spin. In relation to this legislation, clearly the inflationary imperative does not exist, because we around this chamber are now all agreed that, in fact, this proposal will be inflationary.

But the thing that disturbed me is that the email, if I heard it correctly as read by Senator Xenophon, said that Treasury could not confirm the FCAI calculations but—and this is where the bureaucratic language is so wonderful unless you are willing to probe and question—nor were they willing to deny it. So we have one set of evidence put before the Australian people by the motor vehicle interests in this country; Treasury says it cannot confirm it, but nor can it deny it. As a result we are left with only one lot of information in the public domain, and that is from the FCAI. If Treasury cannot confirm this information from the FCAI, I simply pose a question, and it is not a rhetorical question: how can we accept this $400 million figure? It sounds very round to me. Why isn’t it $401 million or $399 million? There is just the very convenient figure of $400 million being thrown up by Treasury for an Independent senator to accept at face value. The FCAI information would suggest that that figure might be wrong. The government say, ‘We can’t confirm the figure,’ but they are not gutsy enough to deny it, because they know that if they were to make such an allegation then they would be brought to account.

What we have now is Treasury saying that the luxury component of vehicles has somehow increased and that therefore it is appropriate that the luxury car tax threshold captures more and more vehicles. I hope there is somebody in Treasury who actually enjoys an increased standard of living. That is what we are on about: we actually want people to enjoy an increased standard of living. One day having refrigerators was, in fact, a luxury; today most people accept it as standard and required. Once upon a time televisions were seen as a luxury; now, I think, most people accept that they are standard.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

Telephones!

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

Senator Cormann quite rightly interjects and says, ‘What about telephones?’ It is exactly the same. So we have the ridiculous situation of Senator Doug Cameron coming into this chamber earlier this evening saying—

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

Senator Conroy interjecting—

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

and even Senator Conroy has to laugh at this—that somehow air conditioning in a motor vehicle, in the year 2008, is an outrageous luxury which should be taxed at the rate of 33 per cent. Just imagine if an employer were to put a union member in an un-air-conditioned motor vehicle in the outback of Australia, where it is 40 degrees in the shade.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

You’d have a strike.

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

You would, Senator Williams—you would have a strike on your hands for occupational health and safety standards, because everybody today should be providing air conditioning for their employees. It is about the question of what we now consider to be a luxury. Do we actually consider airbags to be a luxury? Do we consider ABS to be a luxury? Do we consider those flashing lights called indicators, rather than those old hand signals, to be a luxury? Under the CPIMV we would still have those old hand signals. Remember the yellow hand—I am showing my age now—that you would push out the window? If the hand was straight up you were stopping and if it was horizontal you were turning right. Even that hand signal at the time was innovative and a luxury in itself, because it allowed you not to have to put your own hand at risk as you had a mechanical substitute. Now we have these wonderful innovations—flashing lights—that are called indicators. Of course they are luxuries, so the Treasury CPIMV modelling says that these are luxury factors that should not be taken into account for the purposes of the luxury car tax threshold.

I say to my good friend Senator Xenophon and those on the crossbenches: consider what Treasury is telling you from time to time. Next it will be that having a handbrake is a luxury. I understand that in the past they used to just put a chock under the wheel; you would carry a brick in the back of the car. But now there is the innovation of a handbrake, and so we could go on. Pneumatic tyres—what a great luxury that was! Of course as time goes by cars will improve.

Something that was of great concern to opposition senators has been confirmed—that is, this luxury car tax is a tax on innovation and a tax on road safety. Having an airbag in the car is seen by most people now as standard. But according to Senator Cameron—of course if he were in the car there would be an extra airbag, but I am not sure that that would necessarily add to road safety—

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

If you were in the car there’d be no need for airbags.

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

No second prize, Senator Conroy. The serious point is that this luxury car tax is a huge impost on innovation. It is a tax on innovation. The CPIMV mechanism is clearly an inhibitor to innovation. If this government actually believes its mantra in relation to innovation, it would ensure that the luxury car tax did not act as an inhibitor.

I say to my friend Senator Xenophon and the crossbenchers that clearly the mechanism is wrong. I think Senator Xenophon and I are at one in relation to that. The only thing we disagree on is when it should be introduced. We believe it should be introduced now; Senator Xenophon, in four years time—because this magical figure of $400 million has been plucked out of the air. But no modelling has been done. The only modelling that has been done, that of FCAI, cannot be confirmed, but nor can it be denied.

With great respect, I would have thought that in any court of public opinion, if somebody comes up with an assertion and shows the methodology by which it was arrived at and someone says, ‘I can’t confirm that,’ but they are given the opportunity to tear it to pieces and show that it is wrong, false and flawed, that might be an argument that we would have to listen to. But Treasury do not say that. They do not go that little extra step to tell you, Senator Xenophon, and others on the crossbenches that this is a flawed approach by the FCAI and that they have done something wrong with their calculations. All Treasury say in dismissing it is that they cannot confirm it. That might be because they have not even bothered trying to confirm it; the fact they cannot deny it is very important. So allow me to ask the minister: how was the sum of $400 million—that nice, round, convenient figure—arrived at?

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

Firstly, Senator Abetz has warned me that in a few months time I may learn from bitter experience not to rely on these figures. I do not think I am the sort of person who gets embittered. Even if I had a hard day in the Senate, I could always go back to my office and listen to a Missy Higgins CD to help me chill out! Perhaps there has been a misunderstanding—and I did conscientiously read out the substance of the email virtually entirely—

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

Did it say ‘Dear Nick’ or ‘Dear Senator Xenophon’?

Nick Xenophon (SA, Independent) Share this | Link to 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.

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

Thank you for helping to clear up some of Senator Abetz’s misconceptions, Senator Xenophon. I always admire Senator Abetz’s capacity to almost always maintain a straight face while he is putting forth. It is an admiral capacity. A lot of people think that listening to him is like listening to chalk on a board but I quite enjoy the theatre. The figure was arrived at based on a number of assumptions regarding CPI, CPIMV, growth in sales by model, broadly, and economic growth, and it was in line with the budget forecasts. So it was not, as you are trying to suggest, a figure plucked out of the air; there was a basis for it.

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

Which was?

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

The figure was based on a number of assumptions regarding CPI, CPIMV, growth in sales by model, broadly, economic growth and in line with budget forecasts. Senator Abetz was also asking for specific models. You were raising a concern, Senator Abetz, that Senator Xenophon had been privately provided with information that was denied to you. Could I inform you that you requested specific models and specific numbers in sales. Senator Xenophon was talking only about proportions of cars captured in the future and even that, we said, we could not model. The information that Senator Abetz was asking for was not actually provided to Senator Xenophon. It was a different dataset and a different set of information. I thought it was important to correct the record with regard to your last contribution. None of the information that you specifically sought was made available to Senator Xenophon. Senator Xenophon asked if I could confirm that the government has also committed to refer his concerns on the matter of the indexation of a luxury car tax threshold to the Henry tax review. I confirm on the public record that that will be the case.

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

So does the government believe that there will be a growth in car sales over the next 12 months?

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

You make the assumption that it is in line with economic growth.

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

We have a very interesting situation here: we were told that this $400 million figure, which I will not accept, was based on certain assumptions, including growth in sales—that is what the Hansard will disclose—at a time when the industry is telling us that growth is going south. In other words, in the jargon of negative growth, it is shrinking. Treasury, to boost up a $400 million figure for the consumption of Senator Xenophon, is willing to assert, in a climate where we have a 20 per cent reduction in the sale of cars above the $57,180 luxury car tax threshold, that there will still be a growth experience.

What I would say to Senator Xenophon is this—and somebody might correct me if I am wrong: when the Hawke-Keating government tried to increase the luxury car tax from 30 per cent to 50 per cent, it was such a drain on revenue because people stopped buying the cars that the Hawke government was brought back to the table to amend the legislation back to 30 per cent, because when you have a tax increase you increase the commodity. Cost and demand will tell you that the higher the cost the less the demand and fewer are sold. And, in a climate of reducing luxury car tax category vehicles by 20 per cent, for them to base their $400 million figure on a projected gross is, quite frankly, unbelievable. But I have a question for the minister. Treasury says that they were unable to fully come to grips with the FCAI methodology. Did Treasury bother going back to FCAI to ask for an explanation of their methodology? If not, why not?

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

There are a couple of points. Firstly, apparently a 25 per cent luxury car tax is good, because that is what the proposition put forward over there is, but a 33 per cent tax will suddenly cause a collapse in the car industry for four years. Let us be clear about this: this is an estimate based over four years, and even those opposite would not want to try to suggest that the car sector is going to experience negative growth for four years. If that is your proposition, that is fine. If you want to make a simple point for debating purposes, that is fine, but let us not embarrass the debate by trying to assert that your belief is that the car sector is going to have negative growth for four years. But if that is your assumption, as you are trying to assert to Senator Xenophon, then, please, at least come out and say that that is the case, because this is a figure based over four years. According to you, there would be negative growth in the car sector for four years. I just want to get that on the record.

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

Senator Abetz interjecting—

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

Okay, good. I just wanted to make sure. Could I also confirm that it was the Treasurer’s office that provided the information to Senator Xenophon.

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

That was a lot of obfuscation and dancing around and trying to hurl quite pitiful insults. I would have thought you could have done better than that, Senator Conroy, but the question was: did Treasury ask the FCAI about their modelling or about their concerns or problems with their modelling?

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

Again, we are just trying to get you as accurate an answer as we can, Senator Abetz. You are asking whether or not we could confirm the figures back to 1986, which is what they were based on, when they include a break in the dataset.

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

No.

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

I am just trying to clarify exactly what it is that you are seeking.

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

I understand from the email forwarded to Senator Xenophon that Treasury advised that they were unable to confirm and they had some potential issues with the methodology because there was a break in the dataset. All I am asking is: did Treasury bother to go to the FCAI to discuss their methodology to see if any of these matters could be resolved?

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

No.

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

I thank the minister for that, and I would hope that my dear friend Senator Xenophon heard the answer. I just asked the minister: did Treasury seek to engage in any discussion with the FCAI about the methodology that Treasury had some concerns about? If they were fair dinkum about this, and if the government was fair dinkum, they would have gone to the FCAI and sought extra information to clarify it to provide some robustness to this rubbery $400 million figure plucked out of the air. But, of course, chances are that, like good, well-trained public servants and good barristers, they did not ask questions they did not know the answers to. And they were undoubtedly concerned that the whole government assertion about $400 million would fall in a heap if they actually took that step of asking the FCAI: ‘Is there some robustness in your methodology? Can we talk to you about it?’ But, no, they had no interest in finding out the facts—no interest in consulting with the FCAI to find out whether or not their information was correct.

So I say to my friends on the crossbenches: you are willing to accept Treasury advice on that $400 million figure, which is projected on assumptions, and we are not 100 per cent sure what they are other than that they are expecting growth, but we do not know of what rate or how that $400 million is projected over the forward years. I would be interested to know how much is allocated out of that $400 million to each of the successive years. I would like a break-up of that figure over the successive years from the minister. Can the minister provide us with details of how the $400 million is broken up over the four successive years?

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

No.

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

Accepted at face value, my friends on the crossbenches—plucked out of the air with no basis to it. It was based on assumptions. Surely they would have gone annual assumption by annual assumption, year by year. No! We dispense with that. We treat the crossbenchers with absolute contempt, hoping that they will not ask the difficult questions. Well, I think they have asked some difficult questions, but the opposition is going to keep asking a few more difficult questions.

We have a situation where we must now say that Treasury officials deliberately did not seek further information from the FCAI, and they give us this bureaucratic excuse. Mr Rudd would be proud of that sort of language—‘We can’t confirm,’ which is code for, ‘We didn’t bother confirming because we were scared of what the answer would be.’ They cannot deny the FCAI figures. You would have thought that the government was going to implement—what was that little slogan?—‘evidence based policy’. Do you remember that during the election campaign? ‘Our policies are going to be based on evidence.’ Where is the evidence, Senator Xenophon, for the figure of $400 million that was provided in that email to you? There is no evidence backing it up in any way, shape or form other than the say-so of the government. I accept that you are entitled to accept it at face value, but I ask: why would one accept it at face value when one knows that they have not even calculated it year by year? They are unable to destroy the FCAI assertions. They deliberately do not ask the FCAI about their assertions and their methodology for fear that they might be in fact proven to be correct twice—once by the FCAI and then secondly by Treasury.

I say to my good friends that they are buying a pig in a poke. They have no idea whether that figure of $400 million is robust. Indeed, I would suggest that every indication is it is about as rubbery and as believable as when the Labor Party brought down their second last budget: they said it was either in balance or surplus and we found it to be only $10 billion in deficit. Unfortunately that is the sort of track record we have, Senator Xenophon, from the Labor Party run from a Labor Treasurer’s office, and so that is a matter of concern to us. Some of us have been here before and have had the bitter experience of being willing to accept on face value Labor assertions, only to find out how they fail to live up to the reality. I put to the Senate that there is no substance to this. It is a deliberate sidestepping of the FCAI’s methodology. Nobody has been able to lay a glove on it and, indeed, it would appear that the Treasurer’s office is that concerned about the robustness of it that they do not even want to ask questions about it. How on earth can you believe Treasury in those circumstances?

Question put:

That the request (Senator Abetz’s) be agreed to.

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

I move the request for amendment standing in my name:

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  Subsection 25-1(3)

             After “Subject to subsection”, add “(3A) and”.

5  After subsection 25-1(3)

Insert:

          (3A)    On and from 1 July 2012 the luxury car tax threshold is the luxury car tax threshold as at 30 June 2012 indexed according to a factor to be determined by the Parliament and to apply from 1 July 2012 or, if such a factor is not determined by the Parliament, indexed annually in accordance with the CPI indexation method provided for by Subdivision 960-M of the *ITAA 1997, calculated using the index number referred to in subsection 960-280(1) of that Act.

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

This amendment is framed as a request because it is to a bill which imposes taxation within the meaning of section 53 of the Constitution. The Senate may not amend a bill imposing taxation

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

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 just had a lengthy discussion which traversed this with my good friend Senator Abetz. Essentially this provides for a sunset clause in relation to the current manner of the CPIMV method of indexation, and that if nothing is done within four years it provides for there to be a reversion to ordinary CPI, the position of the coalition.

As I indicated earlier, I believe this draws a line in the sand in respect of the whole issue of the CPI. It forces the government to come back to this place to say what they have done or not done in relation to the whole issue of indexation. Who knows what the Henry review will determine or advise or recommend on the whole issue of this tax and indexation, but it is a mechanism to ensure that the issue of indexation is brought back to this chamber within the requisite period. I know it is not what the opposition wanted but I would urge them to support it because it ensures that there is a mechanism of accountability, if you like, built into the context of this amendment with the sunset clause and with the default position of ordinary CPI increases if the parliament does not deal with this issue.

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I just want to clarify, Senator Xenophon, that this is request (1) on sheet 5588.

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

Yes, it is. Should I make reference to the actual number in future?

The Temporary Chairman:

More than likely; otherwise we will just have to ask you.

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

I am living and learning.

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

It would have made sense for this amendment to be further up on the running sheet, I would have thought, but these things happen. At least Senator Xenophon and I know what we are talking about, but we will wait and see if the minister on this occasion does as well.

Can I say to Senator Xenophon that ballooning this out to the year 2012—what is that: four years away, at least one federal election away?—and putting it on the agenda is, I suppose, noteworthy but it really does not do much. I must say I am not attracted one way or the other to the proposition. I do not think it really takes us forward, but the opposition will not be dividing the chamber on this one.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The Greens will be supporting Senator Xenophon on this. I am very surprised by Senator Abetz, because the opposition remains confident, I assume, that it is going to win the next election, by which time this is perfect because it will revert to the CPI just as Senator Abetz wants it to. In the event that were to happen, I trust we would not be back in here trying to change it; it will default to exactly what he just argued for, so it is a perfect situation that I thought the opposition would clearly support.

As Senator Xenophon rightly says, the amendment says basically that the government has got four years to address this issue of the indexation and do it through the Henry tax review, look at the whole thing. If we get the kind of tax review that I think most people are hoping for—a big picture and quite a sweeping change to the tax system—then four years hence, hopefully, the luxury car tax will be gone and instead we will have, as the Greens have suggested, a phased-in fuel efficiency tax across the whole fleet and so on.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

We’ll all be riding pushbikes.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

If Senator Boswell is riding a pushbike in four years then I think we will have had a transformative effect on the Australian community. It is the agenda of the Greens to seek a transformation to a low carbon economy, and if in four years we actually got to the point where Senator Boswell had taken to his bike we will have had a very rapid transition to the low carbon economy. What is more, I argue all the time, it would be better for us all and if that were the case I would be on my bike as well. So there we are.

Anyway, we support Senator Xenophon’s intent here because it really is about not interfering with the forward estimates but putting in place an accountability mechanism to say, ‘Come back in four years time with whatever you have thought about this in the light of all the changes.’ If it is all still as it is now in four years time, it is a matter of arguing then that it ought not to default to the CPI and that it should stay with the current form of indexation. That is an argument that would need to be put and supported in the parliament four years hence. I suspect that by then this debate will probably be largely irrelevant, but it does put the government on notice that there is an accountability mechanism, and I think that is a good idea.

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

I indicate that the government will be supporting Senator Xenophon’s request.

Question agreed to.

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

I move:

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

(R3) Schedule 1, page 3 (after line 27), at the end of the Schedule, add:

6  Application

                 The amendments made by this Schedule do not apply where the contract to make the taxable supply or taxable importation of the luxury car was entered into before 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 2008.

It relates to the retrospectivity of this particular tax. My concern is that if a contract had been entered into prior to 7.30 pm on 13 May, but the vehicle was for whatever reason not delivered until after 1 July, the tax would apply. That to me seems to be fundamentally unfair. Essentially it would penalise those who for whatever reason purchased a motor vehicle prior to the announcement made in the budget but their vehicle was not delivered. I understand that this is something that would not on any reasonable argument be fair, and that is why I have moved this amendment.

I can indicate to honourable senators that I previously circulated an amendment where it made reference to, as I understand it, ‘where the contract or arrangement was entered into’. I accept the view that ‘arrangement’ is simply too broad and that ‘contract’ would be sufficient and, I think, fair in the circumstances. So I urge honourable senators to support this amendment to, in effect, ensure that there is not a retrospective tax increase, which I cannot imagine the government would want to impose upon motorists.

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

The opposition fully supports the amendment moved by Senator Xenophon. I can indicate that in the event that Senator Xenophon’s amendment is carried we of course will not be pursuing our amendment, which is the next one on the running sheet.

We as an opposition are of course very gracious and willing to allow Senator Xenophon to move this amendment, which is, in fact, in identical terms to an amendment that we moved. The reason I say that, albeit sort of tongue-in-cheek, is that as soon as the government made this announcement with its retrospectivity we as an opposition announced that we would be opposing this retrospectivity on a matter of principle. We made that announcement even before Senator Xenophon took his seat in this chamber.

We in the opposition are very strongly of the view that this sort of retrospectivity in taxation should not be countenanced by any side of politics. Allow me to briefly explain what the current proposed legislation would do. For somebody who in good faith ordered a car on, say, 1 May 2008 with a delivery date after 1 July 2008, Labor would say that they should pay the new 33 per cent luxury car tax albeit when they entered into the purchase contract—and, chances are, they would have entered into their finance contract when they worked out all their dollars and cents, including their stamp duty liability—they would then be whacked with this extra impost of an extra eight per cent because they could not get their car before 1 July. And of course the extra tax would then have the multiplier effect on the stamp duty payable to the state government.

We believe that Australian citizens as much as possible ought to be allowed to go about their business without the prospect or without the concern that they could face a further tax impost after having entered into a legal arrangement such as a binding contract. It is interesting that the government did not slip a note across to the crossbenches to suggest that this might have another $400 million impact, or blow some other hole, because I think in their heart of hearts they acknowledge that it is unconscionable. Unfortunately, Treasurer Wayne Swan has defended this retrospectivity, which I would have thought most people would say is just unfair. You make your business arrangements, you organise your loan agreement, you add up your dollars and cents, you try to work out how much you have to pay for a new car, and then, having entered into the contract before budget night, all of a sudden after budget night if the vehicle is delivered after 1 July you will face this impost. The amendment that we had mooted before Senator Xenophon moved his amendment is a principled amendment and we in the opposition fully support it.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The Greens support this amendment, but I do have to put the record straight and say that when this measure was introduced into the Senate the opposition indicated it would vote against this bill. There was no talk of amendments then; there were no amendments tabled. At that point, Senator Xenophon flagged that he would be developing amendments to that effect, did so and they were written and available in the negotiation the first time around. It was at that point that the opposition was determined to just vote down the bill. I acknowledge that one of the concerns that the coalition had in opposing the bill was the retrospectivity, but there were certainly no amendments on the table because the intention was to vote it down. It has only been since the bill came back with the prospect of being passed that the coalition in fact mimicked Senator Xenophon’s amendment. Therefore, I think it is entirely appropriate that we have his amendment on the table now and we will vote for it. I think it is a good thing that it is going to get up, because it is the right thing to do, but I think we should have an accurate take on what occurred.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

Family First will be supporting this amendment because it is about retrospectivity. In other words, if someone placed an order before the date in May, all of a sudden when they took delivery of their car they would end up paying more which they would have had no idea about. Quite clearly, this is something that needs to be fixed and Family First supports the request.

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

I think it is clear that Senator Abetz is long opposed to issues of retrospectivity, and I do not want to spend too much time on this. I would have been quite happy for the opposition to have moved this amendment. I think it was just the order of the running sheet. I think it is good that there is some widespread support for this amendment. I respect the opposition’s position. They oppose the bill in its entirety but they did have a particular concern about retrospectivity. At the end of the day, we all want to do the right thing in relation to this particular issue. I also acknowledge Senator Milne’s remarks, but I think it just so happens that my amendment was brought up before Senator Abetz’s, and I would have been quite relaxed and comfortable if his was brought up before mine.

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

Senator Milne sometimes just cannot help herself. The suggestion that the opposition might actually do something that she agrees with causes her such a problem that she has to obfuscate and twist and turn—

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Madam Temporary Chair, I rise on a point of order. I would like to point out that today in a dissenting report on the carbon sink forests inquiry, there I was—Senator Milne—with Senator Boswell, Senator Nash, Senator Joyce and Senator Heffernan. I love to agree with so many people!

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Senator Milne, there is no point of order.

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

The people listening in will have heard the Australian Greens yet again abusing the forums of this chamber whilst pretending to be the champion of the Senate. What I was saying before Senator Milne raised her pathetic point of order in a desperate attempt to stop me in my stride from making my point was this: as soon as this matter was announced, within a matter of days we as an opposition announced that we would consider the luxury car tax in some great detail, but one aspect we would not countenance was the retrospectivity of it. We announced that long before we announced our total opposition to the luxury car tax legislation because we wanted to go through it with a fine tooth comb. Indeed, there is media story after media story indicating that that was our very principled position. But, of course, Senator Milne, who comes into this debate very, very late in the piece, would not be aware of all that prior history, but in a desperate attempt to make a cheap political point seeks to completely distort the history and the facts of this situation.

We as an opposition came out within a matter of days after the federal budget announcement saying we would oppose the retrospectivity and the other aspects of the luxury car tax we would examine in some detail prior to determining our final position. That is clearly on the public record. You really do have to ask: what motivates a senator, clothed in absolute ignorance of the facts, to get up and make such a misrepresentation of those facts? You have to ask what motivates it. What is it that goes on in Senator Milne’s mind that she thinks that she somehow value-adds to this debate by distorting the facts? And, might I add, they were the objective facts. We issued media releases about that. We were reported in the media. I did radio interviews about it and was asked: what is your position on the luxury car tax per se? My answer was, ‘We are still considering it.’ That is well and truly on the record.

Having further examined the luxury car tax, we believe it to be fatally flawed, but what we are witnessing this evening is all the crossbench parties supporting and voting with each other in relation to amendments that are, in fact, inconsistent and not normally within their policy framework and within their policy structure. Undoubtedly, the deals have been done, and that is fine, and the numbers will fall where they will. But I will not allow the Australian Greens to so distort the history of what occurred in relation to the opposition’s very principled stance virtually from day one.

The Temporary Chairman:

Just to clarify for the Senate, there is a three-word difference between Senator Xenophon’s motion and the opposition’s motion.

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

I indicate that we will also support Senator Xenophon’s request.

Question agreed to.

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

As indicated earlier, I withdraw opposition request (5) on sheet 5590.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I move:

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

(1)    Page 3 (after line 27), at the end of the bill, add:

Schedule 2Refunds for primary producers and tourism operators

A New Tax System (Luxury Car Tax) Act 1999

1  At the end of section 2-10

Add:

        (4)    Refunds can arise for primary producers and tourism operators in certain circumstances. (Division 18).

2  After Division 17

Insert:

Division 18—Refunds

18-1                 What this Division is about

18-5                 Refunds for tax borne—primary producers

        (1)    You are entitled to a refund under this section if:

             (a)    you have a refund entitlement under this section; and

             (b)    you are ^*registered; and

             (c)    no one else has made a valid claim for a refund in relation to the refund entitlement.

        (2)    You have a refund entitlement if:

             (a)    you have ^*borne luxury car tax on the supply, or ^*importation, of a ^*refund-eligible car; and

             (b)    at the time of the supply or importation you are carrying on a ^*primary production business.

        (3)    The amount of the refund for a refund entitlement under subsection (2) is the lesser of:

             (a)    ⁸/33 of the luxury car tax ^*borne by you as described in paragraph (2)(a); and

             (b)    $3,000.

        (4)    You cannot have a refund entitlement under subsection (2) for more than one ^*car in a ^*financial year.

18-10  Refunds for tax borne—tourism operators

        (1)    You are entitled to a refund under this section if:

             (a)    you have a refund entitlement under this section; and

             (b)    you are ^*registered; and

             (c)    no one else has made a valid claim for a refund in relation to the refund entitlement.

        (2)    You have a refund entitlement if:

             (a)    you have ^*borne luxury car tax on the supply, or ^*importation, of a ^*refund-eligible car; and

             (b)    the Commissioner is satisfied that:

                   (i)    you will use the car solely for the purpose of carrying on a business; and

                  (ii)    the principal purpose of the business is carrying tourists for ^*tourist activities.

        (3)    The amount of the refund for a refund entitlement under subsection (2) is the lesser of:

             (a)    ⁸/33 of the luxury car tax ^*borne by you as described in paragraph (2)(a); and

             (b)    $3,000.

18-15  Claiming refunds

        (1)    You must claim a refund within 4 years of becoming entitled to the refund.

        (2)    A claim for a refund must be in the ^*approved form.

18-20  Payment of refunds

                 If you are entitled to a refund under this Division and you have claimed the refund, the Commissioner must, on behalf of the Commonwealth, pay the amount of the refund to you.

3  Section 27-1

Insert:

primary production business has the meaning given by section 995-1 of the ^*ITAA 1997.

4  Section 27-1

Insert:

refund-eligible car means a 4 wheel drive, or all wheel drive, ^*car of a kind specified in regulations made for the purposes of this definition.

5  Section 27-1

Insert:

tourist activity has the meaning set out in regulations made for the purposes of this definition.

6  Application

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

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

This amendment is framed as a request because it is to a bill which imposes taxation within the meaning of section 53 of the Constitution. The Senate may not amend a bill imposing taxation

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

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.

This request provides exemptions to farmers and tourism operators who rely on their four-wheel drives. We know that farmers and tourism operators are doing it tough, and this tax should not hit farmers and tourism operators. No-one has suggested to me that farmers and tourism operators should not be exempted. I think that is what I am hearing around the table. Some have said, though, that others should be exempt from this tax. There may well be an argument for that, and others can make their case. Family First has said that farmers and tourism operators should not be hit by this extra tax and that is why I have moved this request for amendment.

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

Senator Fielding raised his concerns about the impact on farmers and tourism operators with the government. The government will support Senator Fielding’s amendments to provide a refund of the increase in the luxury car tax to eligible primary producers and tourism operators. The government is satisfied that the amendments will not impose an undue burden on business and have protections in place to reduce the possibility of abuse.

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

The opposition will be opposing this amendment. This amendment is the worst case of window-dressing that we have witnessed for quite some time. I would invite Senator Fielding to, in fact, have a look at his speech of 3 September and see how the amendments he is putting forward today match up with his statements. I remind him that he acknowledged ‘this tax increase is a blatant tax grab’. It is. He is right. Why would you vote for a blatant tax grab, even if it is going to be a few million dollars less. Especially when you acknowledge, as Senator Fielding so rightly did, and I quote:

… there are also small businesses that depend on their cars as a tool of trade but their vehicles do not fall into those exemptions. Small tourism operators and farmers are two important groups who will get slugged by this tax increase.

He is right. I say to Senator Fielding and the crossbenchers: there are a lot more groups out there in the community than just primary producers, or farmers, and tourism operators. Indeed, at the time Senator Fielding referred to ‘small tourism operators’. If you have a look at the detail of Senator Fielding’s amendment, you see that there is no limit to the number of vehicles that a tourism operator can buy in any one year. It could be 100 new motor vehicles, and Senator Fielding would still call them a small tourism operator according to his speech. But the one-man band who happens to be the local vet, the local plumber, the local fencing contractor, the local Australia Post contractor or the local general practitioner somehow gets forgotten. The big tourism operator, who might be buying 100 vehicles a year, is okay but all these other small businesses are not. Senator Fielding went on to say:

Family First also wants to see an exemption or some other way for four-wheel drive vehicles that are registered in rural areas, in recognition that families in rural and regional Australia are doing it tough.

What a great idea. We support the concept. That is why we moved a request for an amendment to exempt all vehicles from this iniquitous tax up to a threshold of $90,000. Guess who voted against it? All the crossbenchers—because they have done deals with each other inconsistent with their own policy pronouncements. Families are doing it tough in rural and regional Australia. I do not know why Family First think that it is only primary producing families and tourism families that are doing it tough. Do Family First think that the local plumber is not doing it tough—or the local vet, the local fencing contractor, the local electrician and his or her family are not doing it tough? Of course they are, but they are not going to be looked after.

So what we have with Family First is a case of ‘all families are equal but some are more equal than others’. This is nearly like an Orwellian overtone, isn’t it? If you are a primary producing family, Family First is with you. If you are in the tourism game, Family First will look after you and your family. But woe betide you if you are a plumber in rural or regional Australia—sorry, you are in that second category of families that Family First is not that concerned about. Quite frankly, I find it amazing that my good friend Senator Fielding and Family First have come to this position and accepted this position from the government. It is a sell-out of rural and regional Australia other than primary producers.

Let us move on to the definition that has been proffered to us in these amendments of what ‘a primary production business’ is. It is a whole lot of things, but it should be very interesting for supporters of the Australian Greens to learn that the Australian Greens will, in fact, be supporting this amendment when they take a look at what it includes. You get the exemption if you are buying a four-wheel drive vehicle for the purposes of primary production. The amendment states that you carry on a primary production business if you carry on a business of felling trees in a forest. This is going to be a tax break for those forest workers who harvest the old growth forests of Australia.

I do not mind that. I confess that our amendment, which was a catch-all, would have allowed for that to occur. We believe that everybody in that bracket of up to $90,000 should be exempted. The Australian Greens have lectured us for I do not know how long about the need for low-emission vehicles and about how they were setting the scene for Australia by becoming more responsible with fuel consumption. They are now all of a sudden providing tax relief for vehicles that consume up to 14.5 litres per 100 kilometres so that they can go about their job of harvesting Australia’s forests. It would be quite funny if it was not so sad and, in fact, two-faced. We support the forest industry. We have a very proud record of doing that.

The Greens and Family First, in their bizarre dealings that quite frankly nobody has been able to explain in this debate, are now voting for each other’s amendments in complete contradiction of what I believed these parties stood for. There are 34,000 breadwinners in the Australian car industry, most of them in the state of Victoria. The amendment that we as an opposition moved would have exempted, in effect, all Australian made vehicles from this extra tax impost. But Family First, which is based in Victoria, voted against out amendment—I do not know why—and supported an amendment which will make about 35 imported vehicles cheaper to purchase than Australian made vehicles. Do not tell me that that is not going to have a direct impact on the livelihoods of those 34,000 families who have breadwinners in the car manufacturing sector. There will be job losses as a result of this, let us make no bones about it. If you jack up the price, if you increase the price, you get fewer sales.

What does the automotive sector tell us? That it is in the higher price bracket vehicles that they start making a profit. About 10 per cent of the vehicles that are hit by the luxury car tax are Australian made. They will be hit. And, might I add, not one of the amendments that we have before us, whether Greens amendments or government amendments—there is a bit of confusion there; we might as well call them the Greens-Labor coalition amendments—benefits a single Australian motor vehicle. The government has acknowledged that. I took a look at Senator Fielding’s amendments to see whether there might be benefit, and there might be with the Ford Territory Ghia—possibly.

Then we have the very interesting aspect—and I will have to canvass this a bit later on, I fear—that in Senator Fielding’s amendment dealing with tourism operators we have the suggestion that the government might pass regulations and allow for other vehicles to be exempted. This Senate is entitled to know what, if any, deal has been struck between the government and Family First as to what vehicles they are going to exempt under the proposed regulations. Why can’t they have been legislated for, as they were with the emissions amendment from the government and the Greens? Specific reference was made to four-wheel drives by Senator Fielding in his amendment. But then there is a regulation that might allow other vehicles. What deal has been done? What vehicles and why?

I would also like to know why primary producers are only to have one vehicle exempted per annum under this proposal. If you are a small business and a primary producer, you are only allowed to have one vehicle per annum exempted. But if you are a small business and a tourism operator, you can have as many vehicles as you like exempted. Where is the fairness? Where is the justice? Why is it that a farming family is only worth one vehicle whereas a tourism family is allowed to have as many vehicles as it wants exempted from this tax hike—or tax grab, as Senator Fielding described it?

These amendments are very disappointing. But I would be very interested if Senator Fielding could respond to some questions. Why has a limit been placed on primary producers of only one vehicle but tourism operators have unlimited access to the exemption? Why does it only cover primary producers and tourism operators and not the hosts of other people who are doing it tough, as Senator Fielding acknowledges, out in rural and regional Australia?

Why do we have a mechanism under which these poor struggling families doing it tough, as Senator Fielding acknowledges, have to first of all come up with the money for this tax? Why do they have to extend their overdrafts for the privilege of paying this tax only to have it rebated to them at some later stage? Why not just exempt them from the tax and save them from having to increase their overdraft facilities? They will be paying interest on these funds for the sole purpose of paying the money and then having it paid back to them, one would imagine, a couple of months later. I thought that Family First was about looking after the interests of small business, yet we have this bureaucratic and very costly mechanism being applied to this proposition. I would like to know why and how that helps small businesses, especially family businesses.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

I want to ask Senator Fielding a question. If I understand the request correctly, it allows for one vehicle per year for a primary producer, as defined in the tax act, to be exempt from this luxury vehicle tax. I did ask this question of Senator Conroy earlier on when you were not here, Senator Fielding. I would be interested to know why in the tourism industry it is, as I understand the amendment, unlimited so you could buy 10 tourist vehicles. If it is a good business decision to do that then that is the right way to do it. That is good for the tourism industry because it addresses the concerns we have and the concerns Senator Fielding has as well. But why is it only one vehicle per year for primary producers?

I understand that Senator Fielding has many things to do and may not have been listening to my arguments before. Perhaps it is different in Victoria, which is a smaller state and the farms there are not quite as big and the scale of farming production is not quite the same. But certainly in the north-west of Queensland there are huge properties. I was there just recently. It is not unusual to have five Toyotas with all the additions—the winch, the bullbar, the spotlights and the things that do take it up into the luxury car category. There could be five on a property. I was on a property where I saw about a dozen and only half of them would have been in. I suppose these properties could buy one a year for the next 25 years, but by the time it got to that the first one would be a heap of metal falling apart.

I give this as a real example: you have a vehicle that is used on the property but you also have a similar vehicle used by mum to take the kids into school. If you live in Melbourne, Sydney or Brisbane the school is in the next suburb, or you take your child down to the bus stop and they get public transport. In places up in remote Australia, mothers drive their children 50 kilometres to get them to school, drive back home and come back in the afternoon and pick them up. I can give the exact case of Georgetown in Queensland. The state government will not put on a bus service, so mothers up on the Gilbert River have to drive their kids 30 or 40 kilometres twice a day every day. You would not put them in a Holden or Falcon; you would put them in a decent four-wheel drive with air conditioning—

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

As you would in the north of Western Australia.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Yes, and the same in the north of Western Australia. Air conditioning is not a luxury up there; it is essential. You would put a bullbar on because the chances are that in any year you would knock over a couple of kangaroos and if you are unlucky you would probably hit a beast as well. If you are travelling at night you do need to have decent spotlights. You might have a Shoo Roo, although mine never seemed to work. It all adds to the cost. There might be a manager on one of these properties. He might not be the primary producer strictly speaking. Perhaps the manager of a property does use the primary producer’s basic four-wheel drive but perhaps his contract does not allow his wife to have a primary production four-wheel drive to take the kids into school. The manager has his own personal four-wheel drive. They will have to pay the luxury tax. It is not something that anyone in Canberra would appreciate or understand. In Canberra you go down to the end of the street and there is a school there. You go half a suburb away and you have a shopping centre. That does not happen in the bush.

So I am curious. Perhaps I have your amendment wrong, Senator Fielding. Perhaps it is more than one vehicle. That is a concern to me. Senator Abetz, quite rightly, said, ‘Sure, I’m glad we are looking after the primary producers for one vehicle a year,’ if I understand the amendment correctly, but what about all those people Senator Abetz mentioned? I will not dwell on them but simply run through them. It could be the mechanic, the contract harvester, the contract fencer, the vet or the mailman. It could be any of these people who live in places all over Australia. I have just come back from the north-west. Let me name them: there is Einasleigh, Forsayth, Georgetown, Normanton, Croydon, Karumba, Burketown, Richmond, Hughenden and Julia Creek. That is just a few up in the north-west. They are little communities where there are people who are not primary producers but for whom a four-wheel drive with bullbars, air conditioning, spotlights, et cetera, which take them into the luxury car tax category, are essential. Why are they not getting the same break that primary producers are getting?

I am glad we are doing it for primary producers, although one a year is not realistic, but why not for other people? There may be an explanation, Senator Fielding. I will sit down and hear the explanation. If I have this wrong I will speak again to apologise. But I really would like to know why we are looking after certain people and not others.

Let me just also indicate that I am slightly confused about where the luxury tax goes. If you buy a Toyota LandCruiser or a Nissan Patrol in Melbourne, you would get it straight off the ship. If you buy it in Mount Isa or Mareeba or places in remote Australia—and I am using Queensland as an example because I come from there—and I am sure it is the same up in the north-west of Western Australia, in the Kimberley, or you buy it in Alice Springs, it is more expensive, for all the right reasons. It is just another impost on country people, people who do not have an alternative. There are no trains, there are no taxis, there are no buses or carriers that can pick up your groceries and deliver them home. I am just concerned about that.

I know that Senator Fielding has a real interest in families generally and certainly families in remote and regional Australia who really do it hard. I do not think any of them would change their position—they are there for a reason. Quite frankly, rural and particularly remote families do it tough and this legislation will impact on them. I know that Senator Fielding has done a deal with the government to try to address this issue and I appreciate that he has done that, but I do not think that he has addressed it properly. I may be wrong, so please, Senator Fielding, explain it to me.

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

I invite Senator Fielding to respond to those questions because they really are genuinely important questions that I believe do demand an answer especially in circumstances where Senator Fielding previously gave a speech saying that this was a tax grab. He then went through all the problems with this tax. Since then he has come out accepting a deal where he has supported the price reduction of 25 imported vehicles at the expense of the Australian motor vehicle manufacturing industry and has then limited himself to amendments which will be quite minuscule.

I somehow think that Senator Fielding thought that he was getting a Rottweiler pup, whereas in fact he got a Shih Tzu pup instead—a little lapdog for a bit of comfort as opposed to that which he was going to so solidly support, and that is the rural and regional areas of this country and the families doing it tough out there. Now we are only doing it for primary producers and tourism operators and in circumstances where the government has sold him the idea on the basis that they might introduce regulations in relation to tourism operators. I would have thought that the activities that will be allowed—and even those would be further regulated—indicate what the government’s intention here is. It is to restrict this as much as possible.

Also I would like an answer as to why in his proposed amendments he says that a tourism operator only gets a refund entitlement if the commissioner is satisfied that the person will use the car solely for the purpose of carrying on a business. Does that mean therefore that, if you allow somebody—an employee, for example—to take the car home and they divert for half a kilometre to buy a litre of milk on the way home, you could no longer honestly assert to the tax commissioner that the vehicle was used solely for the purposes of carrying on a business? As a result, the tax exemption would be forfeited.

Then it begs the question: what happens if you see somebody stuck at the side of the road? Do you offer them a tow or not? Is that for the purposes of carrying on a business? You see somebody hurt on the side of the road that needs to be taken to hospital. Are you not carrying on a business if you do that and you lose your tax exemption? I ask Family First: did they canvass all these sorts of questions with Treasury and with the government before accepting what now looks like a very tawdry deal which I am sure in his heart of hearts Senator Fielding cannot accept?

What I want to know as well is why he would have voted to exempt completely those 25 imported models from not only the eight per cent increase but also the existing 25 per cent that currently applies, completely exempting 25 makes of foreign imported motor vehicles. Yet the deal that he got for primary producers, who he acknowledges are doing it tough, has the exemption not from the full 25 per cent and eight per cent, as with these other imported vehicles, but only the eight per cent increase. Is the green cohort that drives the Alpha Romeo, the BMW, the Audi or whatever else more deserving than the primary producers? I am just wondering why the deal was struck in the manner that it was especially with these open-ended regulations that really mean that Senator Fielding does not know what he is getting—and I think we need some clarity on this, Madam Temporary Chair—unless there has been a deal and an indication has been given to Senator Fielding about what the government will do in relation to the regulations and, if that has been done, then I think we as a Senate are entitled to know what that deal is.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

I would like to direct to Senator Fielding—through you, Madam Temporary Chair—a couple of questions. Are fishermen primary producers, and will they have exemptions from the luxury car tax? Would kangaroo shooters, who use these four-wheel drives because they have to, be considered primary producers—because they are, I suppose, the very basis of hunting and gathering and primary industry? If you go out into the Aboriginal communities you see that they all use four-wheel drives—the councils and the people own four-wheel drives. It is not a luxury there; it is a necessity, complete with bullbar, spotlights and all the extras that take it well over the luxury car high jump. I do not know why you would exclude Aboriginals, kangaroo shooters or fishermen—and probably the flying doctors, too; they are people who use four-wheel drives. They are very worthy people who provide great services to regional and western communities.

You see, once you try and draw a line around primary industry, there are many people excluded who are on the fringes of primary industry and maybe even primary producers, such as fishermen and kangaroo shooters. The thing that I cannot understand—and I will be listening with great interest—is how you draw the difference between the primary producer and the shearer, the guy who does the mulesing, the guy who fixes the windmill or the engines or the mechanic who goes around the properties to service them. No-one can understand this; it is not just me. No-one in this place can understand why you would want to divide a community and say, ‘You’re in and you’re out.’ But we have been through this debate, and this is the first opportunity that I have had to have you throw some light on why you would divide people from primary industry and why there would be any difference between two people who are working and living in a town or adjacent to a town. The reason they have to drive four-wheel drives is that it is a safety issue out there. It is not a luxury issue; it is a safety issue. Senator Fielding, if you can throw some light on that and answer my questions about Aboriginals, fishermen and kangaroo shooters, and give me a reason for the difference, I would really appreciate it.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I listened to a whole range of issues there. If the opposition had their way, they would probably exempt everybody and throw the tax out—oh, that is what you are trying to do! Is that what you are trying to do—throw the tax out? I think that is what you want to do—to exempt everybody whether you are from here or there.

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Senator Fielding, please address your remarks through the chair.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I do not know whether Senator Boswell has had a look at all at the act that has already been passed. The coalition have supported the car tax in the past. I do not know whether you have had a chance to read the part of the act where it defines ‘primary production business’:

you carry on a primary production business if you carry on a business of:

…            …            …

(d) conducting operations relating directly to taking or catching fish …

What I have heard here tonight is a grab bag of exemptions here and exemptions there. Family First made it quite clear that we are not going to be obstructionist. We said we would look at it, and we raised concerns. The opposition come in here and say, ‘Look, this is no good because the number of vehicles is unlimited for tour operators.’ That is good news, isn’t it?

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Yes, I said that.

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

Not for farmers.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

But it is good news. Then you bag it for that reason. Then you go on and bag it because it supports forestry. Could you find any other reasons to bag this amendment? It is a good amendment. It is good news; it is not bad news. Then you say that it hits 10 per cent of Australian cars. What about the 90 per cent that are exempt Australian made? You cannot have it both ways.

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

What? Ninety per cent aren’t impacted at all.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I do not understand you. You said this tax impacts those people from there. There is the other one about why farmers are limited to one vehicle. Over 10 years, they can get 10 vehicles. Then you look at some other issues about how it is too complex and not easy to do. It is a simple matter, at this stage, of claiming a refund. I do not think it is going to take that long to get the refund back. Rather than looking for the negatives of this amendment and looking for ways to shoot it down, you should be supporting the amendment. As I said before, there may be many other cases that you could bring forward, but if you bring them all up then you are exempting everybody. I do not think that that is the spirit of the Senate, given that in this place both sides of parliament have supported the idea that there be a luxury car tax. Family First have said that it should not apply to farmers and tourism operators and have gone about doing that.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

I thank Senator Fielding for that, but he really did not answer my question. I indicated to you that I thought your arrangement with tourism operators was appropriate.

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Are you continuing, Senator Macdonald?

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

I am asking Senator Fielding a question.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

Senator Fielding interjecting—

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

The rules of the Senate do not allow me to talk to you directly, Senator Fielding, but I am asking you a serious question. I appreciate your comments regarding tourist operators. I for one support that, and I am sure the tourist operators up my way will be very pleased, so thank you for that. I also support you on the primary producers. That is good. Well, it is as good as far as it goes. You said they can buy one every year for 10 years. Senator Fielding, I am just trying to indicate to you that vehicles do not last long there, and Victoria is different to Queensland, Western Australia or the Northern Territory. Every day of the week they go through potholes and bulldust, and they go through slush when the floods come. They even go under water with the—

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

It’s called a snorkel.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Thank you—snorkels on them. They do not last 10 years. The Toyotas, Nissans, Fords and so on are great vehicles but they do not last. As I said, I have just been to a property where they grow cattle, fodder crops and other things, and there would be a dozen vehicles there. So you would only be giving an exemption to some. That is the difficulty of making these sorts of deals. Senator Abetz’s amendment was so much better because under $90,000 you would look after the tourism operator, the farmers, the vet and everyone else and you would get the 10 Lamborghinis that are sold in Australia every year, the Bentleys and so on.

You ask about giving exemptions to the vet, the plumber and the fencing contractor, as well as the roo-shooter and others that Senator Boswell mentioned, and say that, if you gave the exemption to them, you would not get any money for the government. Hang on, the government have a $22 billion surplus thanks to Peter Costello and the country is in pretty good nick. Why pick on the vet, the roo-shooter and the mechanic to pay the government $550 million when they do not really need it? You are picking on some people. You are not picking on the people who live in the cities who can walk their kids to school. You are picking on the people in remote Australia who do not have an alternative.

I attribute good faith to you, Senator Fielding. You are right in saying that we support whatever concessions you have been able to negotiate with the government. That is good, and it is better than what the Labor Party have done. They have no interest whatsoever in people outside the capital cities. They do not seem to have much interest in the manufacturing workers either, but that is their business more than mine. I am concerned about people in country Australia who do it tough and who always end up paying more. Sure, when we were in government we gave them a little bit back. Remember that we had a Regional Partnerships program? That used to try to even the balance for people in country areas, but that is all gone now.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Shame the Nats rorted it!

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

Senator Conroy interjecting—

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

The Labor government wanted to save money, so who did they attack? They attacked the country people yet again. With respect to Minister Conroy and Senator Sterle behind him, things are pretty good in Perth and Melbourne, but they are not quite so hot in the country areas. You knock off Regional Partnerships and you put this luxury tax not on the Lamborghini drivers, who are all mates of the Labor Party in the capital cities these days, but on country people yet again. How fair is that? I do not want to name them here, but we know a lot of millionaires who support the Labor Party, people who supply planes to Labor Party operatives to jet around the world. We could talk about a couple of Labor Party politicians who are the sorts of people who should be paying luxury taxes not just for cars but for their Rolex watches, jewellery and those sorts of things as well.

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

I don’t even have a watch!

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

I do not think you are one of the millionaires, Senator Conroy. But there are a couple of your colleagues who, if you are looking at luxury taxes—

The Temporary Chairman:

Senator Macdonald, please direct your remarks through the chair.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Thank you, Madam Chair. If the Labor Party were interested in taxing luxury goods then why not have it on jewellery, gold records and those sorts of things? There could be a luxury tax on some of the fine wines that are around. These are the sorts of things that we read about—I do not know about this, but I cannot wait for Mr Costa’s book—in some of the deals between the Labor Party and the very wealthy in this country. If you want to raise some money, let’s have a luxury tax that actually addresses luxury items. Let’s not put the luxury tax on vehicles that are essential for the people in the country who are doing it tough. The people that this tax will mostly affect are not the Lamborghini drivers, who are mates of the Labor Party, or the jet owners. Do we have a luxury tax on jets, by the way?

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

No, we don’t.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

There are some very wealthy businessmen who fly Labor Party operatives around the country. Have we got a luxury tax on them? Or are we going to tax the mum out in country Australia who drives her kids to school and back every day? Senator Fielding, I know that you are not part of this. You are trying to do the right thing. But ask yourself: why isn’t the Labor Party taxing the real luxury items? Why isn’t the Labor Party putting a tax on the real luxury goods in this country and not the essential goods, which are four-wheel drives with a bullbar, some spotlights, a winch and air conditioning to deal with 40-degree temperatures?

Sure, Senator Fielding, I appreciate what you have done for the tourist operators, and I appreciate what you have done for one vehicle up in the north. But the primary producer is using his vehicle on the farm and the carer who takes the kids to school has to have the other one, and they will pay the luxury car tax on that. Why? On your own admission, Senator Fielding, you do not want to destroy the government’s budget tax measures; you want to make sure that they get their revenue—and that is a creditable thought on your behalf. But why don’t we tax the real luxury items, not the essential items? Tax the jets, tax the Rolex watches, tax the jewellery, tax the gold record collection—tax those things that really can be said to be luxury items. Please do not tax an essential means of transport for people who live in remote and country areas of Australia.

I did not want to spend this much time but Senator Conroy has baited me to get annoyed and quite emotional about the fact that this is a luxury tax on a necessity. But you are not taxing real luxury items, which you could easily do. Why that is one could only imagine. But, please, Senator Fielding, if we are going to do this, can’t you take the exemption out a little wider? I do not know how you would do it. Do you say two exemptions for a farming family? If you have two, what about three? What about four? This is why Senator Abetz’s amendment was so very sensible. Perhaps Senator Abetz was a bit generous. Perhaps, Senator Fielding, if you were inclined, you could move an amendment along the lines of Senator Abetz’s, but rather than it being $90,000 make it $80,000. I do not know; I do not have the figures. That would make it more equitable. That would mean that on a farming property not only would dad—presumably; I do not want to be sexist here—who goes out and uses the vehicle on the farm for primary production matters, get it not as a luxury car but also mum, who has to go and do the groceries and take the kids to school, would get it, a typical family arrangement. Or it could be the roo-shooter, whose sole means of livelihood requires him to have a pretty good four-wheel drive vehicle, not one of the cheap ones that will fall to bits in half a year but a fairly substantial vehicle. However, for the roo-shooter, it is a case of, ‘Sorry about that; you pay luxury car tax.’ And never mind the vet, the animal doctor! And what about the people’s doctor? If you get around in these sorts of places, you also need a four-wheel drive—and you do not want a cheap one that will disintegrate with the first kangaroo you hit and you find yourself in hospital. You want a decent four-wheel drive with a bullbar, air conditioning and a spotlight. I heard one of the Labor people say, ‘Air conditioning—what a luxury item that is!’ I challenge you, Senator Conroy—I know you are a Transport Workers Union guy; you probably drove trucks all over Australia, right up on the Darwin run up to Kununurra.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Sterle interjecting—

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

You have done that, have you? Would you ever drive a truck without an air conditioner? Tell me that.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Yes, my first four didn’t have air conditioning.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

What about your last 20—did they have air conditioners? Don’t talk to me; I guarantee that if you are a truck driver it is a long time since you have driven in a cab that was not air conditioned—and neither should you. I am surprised that any union man would suggest that people should not drive air-conditioned trucks when they are going from Cairns to Karumba to Darwin to Kununurra to Broome. They are essentials, not a luxury. A Rolex watch is a luxury, a jet plane is a luxury, jewellery is a luxury—all those things are luxuries. Air conditioning in a four-wheel drive is not a luxury. Senator Fielding, this is the trouble: where do you draw the line? In all good faith, you said, ‘Yes, let’s exclude primary producers one vehicle.’ I can understand that but once you start saying, ‘If you have one, that’s okay but if you have two’—as I said earlier, it is a bit like the uranium policy: if uranium comes from three mines, it is good uranium; if it comes from a fourth, it is bad uranium. It is a bit like a vehicle. One primary production vehicle is good—

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

It’s a bit like 25 per cent good and 33 per cent bad.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

But why are you doing this if it is such a small amount, Senator Conroy?

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

Senator Conroy interjecting—

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

That was your argument by interjection.

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

It was not.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Perhaps you will tell us what the argument was. All I am saying, Senator Fielding, is that your sentiments are correct, and I support them and appreciate what you have been able to achieve. I just think that somewhere along the line the government has been able to convince you that this is the way to do it. I am saying that what you are attempting to do is good but it could be done in a better way. We thought about this too. What is the best way to do it? Senator Abetz picked $90,000. Perhaps you might think that is too much, but let us have a look at other ways that we may achieve the results you are trying to achieve. (Time expired)

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

I indicate my support for these amendments and commend Senator Fielding for the concessions he has been able to obtain. I note the comments of the South Australian Farmers Federation, referred to in Senator Fielding’s contribution in relation to this. They are pleased with the concessions that have been obtained. I want to focus on just one part of the debate, which I think is important, in relation to the, I think, quite legitimate concerns raised by Senator Abetz with respect to the issue of the definition of a car being used solely for the purpose of carrying on a business with respect to tourism operators.

I will stand corrected, but my understanding is that the tax act has dealt with this quite robustly in terms of its definitions. That essentially means that, if you are using the vehicle for an incidental purpose—I think the example given by Senator Abetz was going down the road to get a litre of milk for your family—that incidental purpose is legitimate and allowed. I think it is important to point out that, with respect to Senator Fielding’s amendment in the context of tourism operators, it is an acknowledged and well-used definition and it does allow for incidental use other than for the purpose of a tourism operator’s vehicle. I think that is clearly fair and it is something that has been robustly dealt with in the tax act over the years. For those reasons I support the amendment moved by Senator Fielding.

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

It is interesting that Senator Xenophon was willing to tell the Senate about the support of the South Australian Farmers Federation for the Family First amendment.

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

A very good organisation.

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

And he tells me it is a good organisation; I am willing to believe him. I am willing to take you on face value, you see, Senator Xenophon. But it is interesting that in his contribution he was unable to tell us about the support of the South Australian car industry—just that very important point. In voting down, as Senator Fielding and Senator Xenophon did, the opposition amendment, they knocked out from exemption every single Australian made car that would have potentially benefited. As a result we now have 25 overseas made vehicles benefiting.

Of course, this is very interesting in the context of the tourism sector. If somebody were minded to buy a Holden Statesman, for example, to take tourism wine tours in the Adelaide Hills in Senator Xenophon’s case, as they do using sedans, or, in Senator Fielding’s state, up the Yarra Valley, possibly not using a Holden Statesman but, let’s say, a Ford Fairmont made in Victoria, that tourism operator would not get any benefit. But, if they were to buy a Mercedes for the job, they would get a huge benefit as a result of the government amendment that they voted for. The workers in South Australia and Victoria—the two states that have by far the vast majority of car manufacturing plants in this country and workers associated with the car industry—must be scratching their heads tonight wondering why Independent senators would vote for amendments that do the Australian car industry in the eye and help support imported models.

They will also be scratching their heads as to why the union that allegedly represents these workers, the Australian Manufacturing Workers Union, makes donations to the Australian Greens, who were the architects of exempting 25 imported vehicles from not only the eight per cent increase but also the current 25 per cent tax. So, for them, it is a 33 per cent turnaround. That is what Senators Fielding and Xenophon voted for.

For Senator Fielding, I ask specifically—and I would be interested in an answer—whether or not he has done a deal or, if he does not like that language, whether an understanding has been reached between him and the government as to what might be contained in the regulations that are clearly referred to in relation to the tourism sector. You see, before the deal was done with the government, Senator Fielding was out in the media saying that four-wheel drives ‘and vans’ would be exempted. There is no mention of vans in the legislation now. Are they going to be taken into account in the regulations? Are they going to be drip-fed in and you are just going to trust the government on face value that they are going to exempt vans one day? I would like to know what the arrangement is.

I would also like to know whether you asked the government, or whether the government gave you an indication, as to what the actual cost to the revenue would be in relation to this amendment, because clearly it is going to have an impact and an impost. We already know with the government amendment—or the Greens amendment; they wax and wane as to who actually moved it—that there is going to be about $40 million taken out from the $500-plus million. We now know that the retrospectivity is out. There must be a revenue impact there and, of course, there must be a revenue impact in relation to Senator Fielding’s amendment. I would just be interested to know how many tens of millions of dollars the government has been willing to concede of its own volition to try to cobble this legislation together. I would also ask Senator Fielding to acknowledge that all the other categories we have referred to—like the kangaroo shooter, the plumber, the electrician and the vet—will in fact get no benefit out of these amendments.

Finally, it was a very valid point that Senator Fielding made in his first second-reading speech:

There is also a question of whether the extra tax should be applied to the most fuel-efficient cars, but the same argument could be used for safer cars.

That is a very valid point, and indeed it came up during the Senate inquiry from time to time. I would just like to know whether he at any stage pursued with the government the issue of safer cars being exempted as well.

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

I want to take issue with Senator Abetz. I have great regard for Senator Abetz and the way he has conducted himself in this debate, but I want to take issue on the issue of the Australian automotive industry. I am very proud of the automotive industry in my home state and the quality of vehicles they produce. It is important that it be put on the record that in relation to this tax something like 10,000 of the 200,000 vehicles manufactured in Australia are subject to this tax, whereas something like 100,000-plus vehicles that are sold in Australia are subject to the luxury car tax. So this tax disproportionately impacts on foreign manufactured vehicles. This tax is one that clearly has a greater impact, in a proportionate sense, on those foreign vehicles. It is clear that the recent, and I think welcome, falls to the Australian dollar give Australian made vehicles an even greater competitive advantage. The future of the Australian car industry has to be, I believe, with green cars, and the amendments we have seen today—that I, the government, the Greens and Senator Fielding have supported—send a very strong signal for the future viability of Australian made cars. These are matters that need to be put on the record.

There is also, of course, the issue of the Bracks review of our automotive industries. It makes absolute sense to me that it would be expected that as a result of the Bracks review, in relation to the ACIS package of support for Australian made vehicles—I would expect, as sure as night follows day—there will need to be amendments to that legislation. So we will have an opportunity to scrutinise in this place the nature of the support that this government gives to the Australian automotive industry and the parts industry and the many thousands of jobs that they represent in this country, particularly in my home state and in Senator Fielding’s home state of Victoria. These are things that will be dealt with, and when you consider the relatively small number of Australian made vehicles that will be covered by this tax and the level of increases—several hundred dollars—relative to the many foreign manufactured vehicles, that is why I feel comfortable with respect to this.

In relation to Senator Cameron, I accept what he told the chamber today and what he said in my private discussions with him. I hope he does not mind—and I do not think he will take issue with this: he has not received any concerns from the AMWU. John Camillo is the secretary of the AMWU in my home state. I do not think anyone could possibly accuse Mr Camillo of being a shrinking violet in any way when it comes to protecting the jobs of his members in South Australia. I have not heard from Mr Camillo, and other representatives of the AMWU have not approached me with any concerns in relation to this particular tax. It is fair to say that Mr Camillo and, I suspect, other state secretaries of the AMWU have been quite ferocious in protecting the jobs of their workers. I have regard to the points made by Senator Abetz, but I am an optimist about our car industry. I believe the Bracks review and the amendments that will be inevitable to the ACIS legislation give us an opportunity to ensure that the Australian car industry is in good stead for years to come.

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

Can I briefly respond to Senator Xenophon. About 10 per cent of the cars that are impacted by the luxury car tax are in fact Australian made. The car manufacturers will tell you that their profitability starts cutting in only with higher priced vehicles. Possibly Senator Xenophon has superior knowledge to the three Australian car manufacturers, but they are all opposed to this luxury car tax. For one reason: the damage it will do to the Australian automotive industry. If somehow this tax was going to benefit them, as was half hinted at by Senator Xenophon, one wonders why they would have spent so much time lobbying against it. If it was going to give them a break, if it was going to assist them, why have they been lobbying against it? The only reason they have been lobbying against it is that they know of the damage it will do to the automotive sector in this country.

Senators Xenophon and Fielding—love ‘em both dearly—have unfortunately got themselves into difficulties making a deal with the government that is unsustainable under questioning. That is their difficulty. They have not only voted—and this is where the double whammy comes in—for an eight per cent increase for Australian made vehicles over $57,180 and up to $75,000, or more in fact, but they have also voted, in comparative terms, for a 33 per cent tax decrease on 25 imported models. And when you put the jacked-up price of the Australian made car next to the 33 per cent reduced price of the imported motor vehicle, the price differential becomes very, very stark, and that is what my great concern is in relation to this.

The fact that we have not heard from the AMWU is not surprising. Senator Cameron came in here supporting this because he thought air conditioning was a luxury. He is living in another world. You sort of wonder whether union officials—I hope I do not do him any disservice—like Senator George Campbell before him and Senator Doug Cameron, towards the end of their union careers, are more interested in gaining Labor Party preselection to get into this place than looking after the interests of the workers. I trust that the gentleman to whom Senator Xenophon refers does not fall into the Campbell-Cameron mould and I will once again accept that at face value if Senator Xenophon were to give me a nod in that regard.

I say very seriously to my friend Senator Fielding that some very serious questions have been asked and I believe that the Senate is entitled to an answer as to whether any understanding has been reached between him and the government in relation to what the regulations might contain and whether or not he engaged in any discussions with the government about safer vehicles being exempted from this tax impost, and whether the government advised him as to what the cost to revenue will be.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I will try and cover those issues. There was a range of issues that Senator Abetz raised. One was the cost to the government. That is difficult to ascertain totally because there has not been any way of tagging these exemptions for farmers and tourism in the past, so it is difficult, but it is certainly somewhere around $40 million. But I do not want to be held to that exactly. What I do know is that I wanted to make sure that farmers and tourism operators were exempt from the tax.

As far as a deal around the regulations is concerned, I think you are reading far too much into that, Senator Abetz. I take the government on this issue at face value. I think you raised the issue about retrospectivity and the costs there. That is an amendment that should be supported. I think you also raised the issue about Family First supporting the exemption for fuel-efficient cars. We think, and most Australians think, that more needs to be done for the environment and that it would make sense to encourage more people to look at fuel-efficient cars. On safer vehicles, no, I have made it clear that it is for farmers and tourism operators.

I think we have had a lot of talk on this and on a range of issues. I have made it clear that it is for farmers and tourism. You may want a lot of other things. You may want a lot of other exemptions. We can go all around the issues, over and over again. I tend to think we have heard a lot of talk, and that is t-a-l-k, not the other one, on this vehicle tax. I think it is time to put this to a vote.

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

I agree with Senator Fielding that we should go to a vote on this, but I asked whether an arrangement or understanding had been reached in relation to the regulations and his answer was that he was willing to take the government at face value in relation to that. Well, hello! I do not know what the face told him at the time and what the value of the face was. Can we have any indication as to what the government said they might contemplate when drafting the regulations? I say to Senator Fielding that if a costing was provided to him of $40 million, I have got a very funny feeling that the regulations will not be getting him any more exemptions for vans and other tourism vehicles, whereas if you were given a bigger figure I may have believed that when the regulations were drafted vans and other vehicles might in fact be exempted and, who knows, even potentially Australian made cars. But we would hate, I am sure, to see them being given any advantage or support in this legislation. We have studiously been avoiding any support of the Australian motor vehicle industry by the particularity of the amendments, which I personally find very disappointing. I think we are entitled to know what the expectation of Senator Fielding is or what the government intends in relation to these regulations, because that will give us an indication as to what the cost might be to the revenue.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

I do not wish to waste the Senate’s time any longer. I have said it is very hard to estimate the numbers purely because these cars are not tagged for farmers and tourism that well. I would say that I think you are reading far too much into this issue, Senator Abetz. I think we are going round in circles, to be frank. The regulations will reflect the intent of legislation—

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

The regulations reflect—

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

Will reflect. These amendments are pretty straightforward really. They are not that complex and I really do not want to keep going round in circles on the issue. There has been no special arrangement made about the regulations. They will follow the intent of the legislation. I think we need to get on with the vote. We are wasting Senate time.

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

Senator Fielding is clearly in a very embarrassing position. When we asked him what he has agreed to he cannot answer, and therefore the defence is wasting Senate time. The simple problem with Senator Fielding’s proposal is this: the legislation says that the definition of a refund eligible car means a four-wheel drive or all-wheel drive—I think we all understand that. Then it says ‘car of a kind specified in regulations made for the purposes of this definition’. What sort of car? Will it include an Australian made car? We could not have that, I am sure, given the amendments that have been passed anti the Australian car industry. Are we looking at vans, are we looking at only people movers, are we looking at sedans? I think that is a fair enough question to ask and a fair enough question to have answered.

I also note that the amendment defines ‘tourist activity’ as having:

… the meaning set out in regulations made for the purposes of this definition.

The tourism sector believes that it is going to get an exemption—full stop. It is quite clear that this legislation, through the regulations, is going to severely limit what is going to be determined as a tourist activity. Is a tourist activity taking a stretch limousine from Melbourne airport to the Crown Casino? Would that be considered to be a tourist activity under this legislation and under these regulations? Or, is it only going to be for ecotourism? This is just so wide—

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

Could we put you on the High Court?

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

It might be better than some appointments you will undoubtedly make. But what sort of tourist activities did Senator Fielding have in mind when he moved this amendment? I think these are genuine matters because there was no suggestion in Senator Fielding’s speech on the second reading or in his support of his amendment that suggested that tourist activities would be limited. So if we are going to have them specifically defined, how will they be defined and who or what area of tourism are you specifically seeking to target?

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

Senator Abetz made reference to the South Australian union official I referred to, John Camillo, and speculated that maybe he has been in some way silent on this because he may be getting preselection. I am not aware of that at all. But can I say that I have known Mr Camillo for a number of years, and I do not think there is any love lost between me and the AMWU considering that they were responsible for the publication of a newspaper advertisement last year that was defamatory of me. That will be taken further and they have been put on notice in relation to that. So I do not want Senator Abetz to suggest that there is some cosy relationship between—

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

Senator Abetz interjecting—

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

I should not talk about the merits of the case but I am very confident since they have already apologised. But John Camillo is a union official I have known for many years. He is absolutely ferocious in protecting the rights and the jobs of those in the automotive industry in South Australia. I think it is quite telling—and I accept what Senator Cameron has said given his background in the AMWU—that the union itself has not raised concerns about job losses with this tax. I cannot take it any further than that, but I think it is fair to say that John Camillo has for many years been well respected on both sides of politics in South Australia for being a fair and fierce advocate for jobs in the South Australian automotive industry. I will not take it any further, but I just want to put that on record, and I do not want Senator Abetz to suggest that I have some cosy relationship with the AMWU—far from it.

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

I indicate our support for Senator Fielding’s request and I also believe, like Senator Fielding, that it is becoming a little repetitious. We are going around in circles and I urge the chamber to put it to a vote.

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

This will be my last attempt. Senator Fielding is treating this place with absolute contempt in his refusal to answer very basic questions as to the meaning and the purpose of his legislation. What on earth is meant by ‘car of a kind specified in regulations made for the purposes of this definition’? Not a single example has been proffered to this place, but we are supposed to vote for his amendment. We as an opposition are not in that game. We believe there has to be clarity. But clearly what has happened is somebody helped him stitch up these amendments and I am not sure that he necessarily fully understands their implication.

What then does ‘tourist activity’ mean? Surely we are entitled to know whether there is going to be a limitation on tourist activity to, say, just ecotourism or only tourism out of a city area. Surely we are entitled to know that.

He tells us that he is willing to take the government at face value. I am prepared to do that, just as long as I am told what it is that I am taking at face value. But we cannot be told whether the tourist activity will include the stretch limo for an international tourist from an international airport to the Crown Casino, or whether it will be an ecotourism venture up in Cape York. Surely we are entitled to know what that terminology means. If Senator Fielding and Family First cannot explain that and nor can the government, nor the Greens nor Senator Xenophon, it shows that in their desperate bid they have struck up a deal supporting each other’s amendments without actually knowing what they mean and what they will mean for the future and what the regulations are going to mean.

Indeed, I will be looking very closely at the regulations, and I would be interested to know whether a timetable has been offered to Senator Fielding in relation to the meaning of tourist activity because—and I say this to him—if the government does not bring down regulations, there will not be any tourist activity to which this exemption will apply, and he will have really bought a pig in a poke. This will not come into being until tourist activity has been defined, but we take it at face value. We have no idea what it means or when it is going to be introduced. Unless Senator Fielding has got a guarantee as to when the regulations will come in and the breadth of them, the Labor government and the Greens will have got his vote on amendments that I am sure in his heart he does not agree with in exchange for something that may never come into force. On that basis, we as an opposition simply cannot support such poorly drafted legislation.

Question agreed to.

Bill agreed to, subject to requests.

A NEW TAX SYSTEM (LUXURY CAR TAX IMPOSITION—GENERAL) AMENDMENT BILL 2008

A NEW TAX SYSTEM (LUXURY CAR TAX IMPOSITION—CUSTOMS) AMENDMENT BILL 2008

A NEW TAX SYSTEM (LUXURY CAR TAX IMPOSITION—EXCISE) AMENDMENT BILL 2008

Bills—by leave—taken together and as a whole.

Bills agreed to.

Tax Laws Amendment (Luxury Car Tax) Bill 2008 reported with requests; A New Tax System (Luxury Car Tax Imposition—General) Amendment Bill 2008, A New Tax System (Luxury Car Tax Imposition—Customs) Amendment Bill 2008 and A New Tax System (Luxury Car Tax Imposition—Excise) Amendment Bill 2008 reported without requests; report adopted.