House debates

Wednesday, 7 September 2022

Bills

Treasury Laws Amendment (Electric Car Discount) Bill 2022; Second Reading

7:19 pm

Photo of Colin BoyceColin Boyce (Flynn, Liberal National Party) Share this | Hansard source

I rise to make a contribution to the Treasury Laws Amendment (Electric Car Discount) Bill 2022. Before I begin, I would like to concur with the member for Kennedy: subsidising imports makes absolutely no sense. First of all, I'd like to make it clear that electric and hybrid cars do have a place in our transport future, particularly for short trips and metropolitan urban use. However, even this scenario has ramifications both for the transmission infrastructure required for recharging capability, the power generation sector and the capacity to supply enough power to the grid. Labor's own modelling suggests that 3.8 million EV charging stations will be required. With respect to rural and regional Australia, the government is proposing fringe benefits tax relief to expediate the uptake of electric vehicles. This puts these people—regional, rural and remote Australians—at a distinct disadvantage compared to their city-dwelling cousins, for reasons which I will outline.

Electric vehicles have limitations with respect to their capability to travel long distances, the time it takes to recharge batteries and their ability to be multifunctional vehicles—for example, to tow a caravan or a boat, or to be an off-road four-wheel drive vehicle or a work vehicle for plumbers, builders, electricians and farmers and so on. The fact is, rural and remote regional Australia relies on these sorts of vehicles, and there are many people whose lives and jobs require more than a small car that can travel a short distance from A to B. These are only some of the reasons that many people cannot and will not access an electric vehicle and, therefore, are at a tax disadvantage compared to those who are in different circumstances.

Professor Miranda Stewart, Director of the Tax Group at the University of Melbourne Law School and Fellow at the Tax and Transfer Policy Institute at the Crawford School of Public Policy has stated that the government's policy will deliver the tax subsidy to a rather narrow class of employee beneficiaries and provide the largest benefit to the highest income earners. Given its fiscal loss, it provides unequal benefit and uncertainty about the electric car market. Once again, we see pious virtue signalling and arguments of transition given by the wealthy, who take into no account the ramifications inflicted on those who live in the practical, real world.

At recent Senate Standing Committee on Economics hearings, Mr Martin from McMillan Shakespeare Group stated that in relation to the charging of electric vehicles from a 240-volt home charging plug, one might expect 10 kilometres of travel in an electric car per one hour of charge. I find that revelation quite astounding. To put it into perspective in relation to my travel requirements as the member for Flynn, it has been 110 days since the election and I have travelled approximately 12,000 kilometres in my car around my large electorate in Central Queensland. Given what Mr Martin has said, if I were driving an electric car, I would require 1,200 hours of charging in order to travel this distance. There are 24 hours in a day, and 1,200 divided by 24 equals 50 full days of charging time or 100 12-hour days of charging time.

As I've already stated in the House, the Queensland Department of Transport and Main Roads stated in a Transport and Public Works Committee hearing:

… if EVs are typically charged during peak demand periods, EV charging will be more costly for owners and electricity demand will increase to levels that require our relevant local networks to be upgraded. That cost will ultimately be reflected in increased electricity prices for everyone.

This is the same Australia-wide. The network was not designed for car charging stations at every suburban household. Nor has the power generation sector the ability to provide enough power to meet the demand required for large-scale uptake of electric vehicles. While I'm sure that as we move to the future electric vehicles will become more popular, they will never in the foreseeable future replace all other vehicles. It is simply not feasible with the available technology. If your electric vehicle runs out of charge on the highway, you cannot get a lift to the next charging station and return with a jerry can full of electricity to refill your vehicle and be on your way. It just simply doesn't work like that.

The Ford Ranger, the Toyota HiLux, the Nissan Navara and Isuzu D-Max are among the most popular cars sold in Australia today. They are in many cases the working-man's car, and are not currently available in an electric or hybrid version. I ask: will there ever be an electric version?

The fact is that, if you want to travel long distances, carry a payload, pull a trailer or have off-road capability, the electric vehicle cannot satisfy this need and provide a reasonable outcome.

Financial institutions have already signalled their intention not to lend money to those willing to purchase an internal combustion engine car. I can only imagine that the insurance industry will follow suit, and this will further disenfranchise rural and regional Australia. There are approximately 20 million registered motor vehicles in Australia that are internal combustion engine powered cars. Given the revenue that the government gleans from the sale of petrol and diesel, if we are to convert this fleet of vehicles to electric and offer tax incentives to do so, where will the money to cover the projected revenue shortfall from reductions in the sale of fossil fuels come from? Perhaps the government may have to consider an electricity tax.

It is my opinion that the uptake of electric vehicles and legislation that supports this needs an all-of-the-issue approach. It should be more pragmatic and understand the practical ramifications of trying to achieve a transport transition too quickly. The full cost has not been fully understood by either the government or the consumer. The Treasury has not been able to articulate the long-term expense or benefits of these government measures, given the initial cost of the EV, their limited supply and lack of infrastructure. This indicates that the government's tax incentive is not warranted, particularly given the small number of vehicles that are anticipated to take advantage of this tax relief over the three-year exemption period.

I suppose it is too much to ask the government to explain the full-cycle carbon emissions that will be saved or how much the temperature of the planet will be lowered. The evidence from the Treasury and the Department of Climate Change, Energy, the Environment and Water shows that the impact of this policy on emissions reductions has not been quantified. The third-party evidence suggests it is negligible. I do not support the government's bill.

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