Jacinta Collins (Victoria, Australian Labor Party) Share this | Hansard source

This measure also satisfies the criteria of simplicity. Senator Abetz raises yachts now. He might easily have been observing my speaking notes, because that is indeed the next point I come to. Some critics of the bill have argued: ‘Why stop at luxury cars? Why not also tax luxury yachts and expensive watches?’ While we want a system that is progressive, we do not want to introduce a myriad of new taxes. That is why we are focusing on cars—one of the major purchases in most people’s lives. Like houses, which I have already mentioned, cars are purchased by almost everyone. This means that there is scope to differentiate between different people based on their financial means. Also, like houses, cars are one of the biggest purchases in most people’s lives, so tax rates do not need to be high in order to achieve the government’s revenue needs.

To expand this tax to a whole range of other minor transactions would add a raft of complications: it would add multiple new taxes, each of which would raise much revenue; it would add administrative complexity for many businesses, and it would require separate assessments of what is a luxury good for each and every category. When one considers the objectives of equity and simplicity, it would not make sense to expand the approach across a range of other expenditures.