Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Assistant Minister for Defence) Share this | Hansard source

Australians pay too much for electric vehicles. As a result, the sales of electric vehicles in Australia are quite insignificant. The reason Australians pay too much for electric vehicles is that under the Abbott, Turnbull and Morrison governments there were no policies or incentives whatsoever to encourage the transformation and the transition to electric vehicles on Australian roads. As a result, we pay too much for them, and there's simply not the uptake there.

Last year, less than one per cent of new car registrations in Australia were for electric vehicles. Compare that to the UK, where well over 10 per cent of new car registrations in the last 12 months were for electric vehicles. The reason for that is that in Australia there were no incentives, no vehicle emissions standards, no tax reductions and no investment in charging infrastructure from the previous government to encourage electric vehicles at all. In fact, it was quite the opposite. Believe it or not, we had a government that actively discouraged Australians from investing in electric vehicles in this country. Can you believe it? The previous government actively discouraged Australians from investing in new technology—better, safer and cheaper technology—and electric vehicles. Remember the previous Prime Minister, Scott Morrison, who said electric vehicles would destroy the weekend? We had Senator Cash say that you wouldn't be able to have a ute anymore and that tradies would be put out of work because of electric vehicles.

These ridiculous statements now seem so ancient and retrograde that most Australians have forgotten about them and, thankfully, moved on. It's wonderful to see that, at the last election, Australians voted for stronger action on climate change—in particular, policies that encourage the uptake of electric vehicles in Australia. That is exactly what this legislation does. This is the Albanese Labor government delivering on its commitment to make electric vehicles cheaper in Australia. We see reducing transport emissions and making electric cars more affordable as fundamental for Australian families and businesses into the future.

The Treasury Laws Amendment (Electric Car Discount) Bill 2022 is clearly good for motorists, it's good for employers and their workers and, most importantly, it's good for climate action. It implements the government's plans to remove fringe benefits tax to make electric cars more accessible for more Australians. The legislation amends the Fringe Benefits Tax Assessment Act 1986 to exempt from FBT the use of electric cars made available by employers to employees. The FBT exemption will apply to battery electric cars, hydrogen fuel cell cars and plug-in hybrid electric cars. The exemption will be available for electric cars with a retail price below the luxury car tax threshold for fuel-efficient cars, which is around $85,000, and which are first made available for use on or after 1 July 2022.

So, if a model is valued at about $50,000 and is provided by an employer through this arrangement, our fringe benefits tax exemption would save the employer up to $9,000 a year. That's a real incentive for that employer to kit their fleet out with electric vehicles and to provide their workers with a safer alternative—one that doesn't require as much maintenance, certainly one that's cheaper now with fuel prices going through the roof, and one that's better for the environment. For individuals using a salary sacrifice arrangement to pay for the same model, their saving would be about $4,700 a year. All of this forms part of the government's electric vehicle discount, which will reduce the upfront and ownership costs of electric vehicles, addressing a significant barrier to their uptake. The FBT exemption will be implemented as an ongoing measure and reviewed after three years in light of electric car uptake to ensure that it remains effective.

The government is also committed to removing the five per cent import tariff for eligible electric cars, as well as the extremely overdue development of Australia's first National Electric Vehicle Strategy. I spoke earlier of the fact that we don't have the uptake of electric vehicles in Australia, and part of the reason for that is that the manufacturers of electric vehicles haven't been supplying them to the Australian market, so the cheaper models of electric vehicles haven't been available on the Australian market. Why? Those manufacturers in the past, under the previous Liberal government, looked at Australia and they said to their boards, 'What is the Australian government doing to incentivise electric vehicles in that country?' The heads of those boards in Australia had to go back to their parent companies in Europe, Asia or the United States and say: 'Well, the Morrison government is doing nothing. The Morrison government is actively discouraging electric vehicles in this country.' And so those manufacturers simply would not supply to the Australian market, and they didn't. That's why Australians have been paying too much for electric vehicles.

These measures finally provide that strategy and that incentive for those manufacturers to start to say, 'Hey, we've got a government in Australia now that means business and is committed to transitioning its fleet of vehicles from internal combustion engines, petrol based cars, to electric vehicles over time in a steady, orderly manner with incentives, and ensuring that there's charging infrastructure to support that change as we go.' And that is a good thing. I still can't understand why the opposition would oppose something like that.

The measures are also part of our Powering Australia plan, which will help deliver emissions reductions of 43 per cent by 2030 and net zero by 2050. The transport sector is one of the fastest-growing sources of emissions in Australia. A stronger uptake of electric vehicles can and will make a substantial impact on our efforts to tackle climate change. We know that, in the absence of climate policy, the Liberals and Nationals relied on COVID and drought to bank emissions reductions, but, as normal economic activity resumed, we started to see increases in emissions again towards the end of that government's years. Now we have a government that is serious about tackling climate change—a government with a set of policies aimed at reducing emissions in the electricity sector and in Australia more generally; at boosting investment in solar, in batteries and in renewables; and now, importantly, at reducing emissions in the vehicle sector. And this policy will help deliver that.

The failure of the previous government for over a decade to come up with any sort of policy on electric vehicles, any sort of incentives or any taxation reductions has been a great shame for our nation, because it's meant that we're starting from behind the rest of world in an important technological advancement. Generally, Australia has been a nation that has been quick on the uptake of technology, particularly when it comes to road safety and the introduction of new vehicles into our country. Under the previous Liberal government, we didn't see any changes to vehicle emissions standards or the uptake of electric vehicles to provide those incentives. But, importantly, this bill changes that.

This bill provides a tax cut for Australian businesses and Australian drivers to ensure that electric vehicles will be cheaper into the future. That will spur many more suppliers and manufacturers of vehicles to start supplying into the Australian market. We all know that it's about the supply of vehicles and ensuring that we have an adequate supply of electric vehicles into this country to ensure that we can reduce prices over time. As I said, Australians are paying way too much for electric vehicles at the moment. This policy will ensure that there are reductions in the cost of those electric vehicles into the future.

This bill also supports the 43 per cent reduction in emissions over the medium term to 2030. Our aspirations for this bill are that the cost of electric vehicles in Australia will reduce, the supply of electric vehicles in Australia will increase, and more Australians will have the incentive to buy electric vehicles in the future. That will reduce their motoring bills, because we know that the cost of fuel has gone through the roof. It will also be better for our environment and our kids' future, in particular, because it will improve the air that we breathe and the overall Australian environment, reduce emissions and represent Australia doing its bit internationally to tackle the existential threat of climate change.

This is a positive bill that delivers on the Albanese Labor government's election commitment to make electric vehicles cheaper in Australia. Coupled with our electric vehicle strategy and the fact we will be rolling out charging infrastructure on highways throughout the country, it will make it all the more attractive for Australians to invest in electric vehicles in the future. That's a good thing for households, businesses, the Australian environment and our kids' future.

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