Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Standing Committee on Economics I present the committee's report entitled Advisory report on the taxation of alternative fuels bills 2011, incorporating a dissenting report, together with the minutes of the proceedings.

In accordance with standing order 39(f), the report was made a parliamentary paper.

by leave—This is a report into four government bills that affect the tax treatment of alternative fuels. Three of the bills apply an excise on liquid petroleum gas, compressed natural gas and liquid natural gas. The fuels were not previously subject to excise, which will now be applied at 50 per cent of that applied to petrol. The fourth bill continues a grant scheme for the next 10 years where the amount of the grant offsets the amount of excise levied on biofuels such as ethanol and biodiesel. The majority on the committee support these bills, and it is worth looking at what some people have said about the proposal that goes with them. I go back to May 2003, when the then Treasurer—the former member for Higgins, Peter Costello—announced the then government's alternative fuels tax arrangements as an long-term important reform, saying, 'Australia must have a more consistent and sustainable fuel tax regime.' In December 2003, the then Prime Minister, John Howard, said, 'These reforms will result in a more consistent and neutral tax regime for fuels used in vehicles.' The then Deputy Prime Minister, John Anderson, at the same time emphasised the importance of investment certainty and that the measures then introduced would achieve that certainty in an identical manner to the way in which it will be achieved by the bills considered by the committee in the present report. Furthermore, Mr Costello stated in his press release:

… today I am announcing important long term reforms to the excise treatment of fuels. The reforms establish a broad sustainable taxation framework for fuels, by addressing a number of anomalies in the current fuel tax system and providing increased long term certainty for investors, while meeting Government commitments and providing time for industry to adjust.

You will not often see me get up here and say that the former Prime Minister was right, that the former Treasurer was right or that the former Deputy Prime Minister was right; but they were absolutely right about those reforms and the effect they would have. Today we have an absolute policy vacuum on the other side. The member for Moncrieff, the deputy chair, who is going to speak next, and particularly the current member for Higgins,-who was an adviser to the former Treasurer at the time those reforms were introduced, must really be severely conflicted about what they are going to say here today in opposing the bills that the committee considered.

These bills are in the national interest. They had bipartisan support. The former government thought they were necessary. But because we now have Mr No in charge of the opposition, good public policy on these issues does not matter anymore; those on the other side are just saying no to the sake of saying no and this is probably the worst example we have seen of the positions that the Leader of the Opposition forces them to take. It does not matter what the issue is now, whether the former Treasurer introduced identical reforms to the ones in these bills or whether the former Prime Minister was a strong advocate of the reforms in these bills; those on the other side say, 'We're not going to support them because we don't support anything that the government puts up.' It is an absolute disgrace that they are taking this position on Australia's long-term fuel interests and trying to score a cheap political point. What is more, it is hypocritical. We hear day after day about the government's not being able to make cuts to the budget, to the deficit and to the bottom line, but this budget measure saves over $500 million, and what are those on the other side saying? They are saying, 'No, you shouldn't do it.' Hang your heads in shame—the position that you are adopting on these bills is disgraceful.

How can the member for Higgins come into this place and, for the sake of political expediency and supporting an opposition leader who will say no to anything, oppose these bills, despite having worked for the former Treasurer and given him advice that his reforms were good policy? It is unbelievable that we are in this situation, and it is a great shame that hangs over the heads of the opposition. We even have the unusual situation of Senator Minchin, who is not known for great policy development—in fact, his position is probably best characterised as extremely pragmatic and political—saying that this legislation should be supported by those on the other side. So a long history of bipartisanship on the way in which the measures in these bills should be dealt with is being trashed completely because those on the other side are not interested in what is good for the Australian people, in what is good for this industry or in making sure that we set up a fair regime for alternative fuels. All they are interested in is saying no and opposing what this government wants to do to make sure that Australia is better placed on these alternative fuels and on our budget bottom line.

These are important pieces of legislation, and both we and those on the other side have known the implications of them since 2003; they have not suddenly been rushed on the parliament. The Prime Minister and the former Treasurer made their statements in 2003 and set in place the policies that these bills are trying to implement, and it is an absolute disgrace that some eight years later we are seeing a complete reversal and a complete absence of policy from those opposite. The only argument that they are going to put forward here today is that it is going to affect cost-of-living issues. They are now going to try to mount another scare campaign on what is essentially their own policy, undermining it by arguing that these measures are going to affect consumers in their adjustment to the cost of living. Where is that cost-of-living adjustment going to come about? They are going to say that taxis will be more expensive, but the increase on an average $20 taxi fare, if it is passed on by the various state governments who regulate the cost of taxis, will be about 80c. So, for the sake of the opposition's attacking and undermining Australia's sensible budget and fiscal stance and undermining policy on alternative fuels, we are having an argument about 80c in a taxi fare.

The opposition stand condemned for their persistent negativity about any bill that comes here, particularly these three bills. The majority of the committee—the government members on the committee—took the sensible approach, advocated by the former Prime Minister Mr Howard, the former Treasurer Mr Costello and the former Deputy Prime Minister Mr Anderson and supported by Senator Minchin. The government has taken the sensible approach. The government members on the committee recommend these bills to the House, and that recommendation is contained in this report.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

by leave—Mr Speaker, I would like to start on a positive note and say it is good to see you in the chair today after what occurred yesterday. I turn to the subject of the debate before the House, and that is the report that came from the House of Representatives Standing Committee on Economics. It was interesting to note the passion that the chairman of the committee had with respect to this particular report and the passion that he had about defending the integrity of the government's budget position. I must say that for members on this side of the House it was a little bemusing. The reason it was bemusing is that the lecture that we got for five minutes from the chairman of the committee was about the importance of budget integrity. The lecture from the chairman of the committee was about how this was coalition policy and how it ought not be changed.

The interesting thing about that for all members of the coalition is that this came from a member of the Labor Party whose Prime Minister sits at the table and, only eight days out from the election, swore black and blue that there would not be a carbon tax under the government that she would lead, and then, seven days later, changed her position. So I say to Labor Party members: if you want to lecture us about changes in position, why don't you address the fact that you had a change in eight days as opposed to our change, which was years and years later and reflects one very fundamental aspect—that is, this is not the time for this change. The reason it is not the time for this change is that there are families across this country facing some very difficult choices. They are facing hard choices because the government has presided over a massive increase in the cost of living.

I noticed as well that the chairman of the committee almost fobbed off the very genuine and real concerns of struggling working families. Members opposite, do you remember those struggling working families in Western Sydney who have to budget to the last dollar? The member opposite completely fobs off their concerns and says, 'This is about 80c on a $20 cab fare.' That is exceptionally disingenuous. For example, we know that there is a fleet of some 700,000 vehicles that have been converted to LPG or run on LPG. The taxi component of the 700,000 vehicles is 18,000, so there are about 682,000 vehicles out there that are not taxis and have been converted to run on LPG because families need to embrace the savings. The evidence that was put to the committee demonstrated that those people would be slugged with an extra $250 to $500 a year as a result of this policy change. That is the reason why the coalition will stand up for those families; that is the reason why the coalition will not support this change. But it is about more than that. It is also because the reforms that the government has laid out will see increases in CNG and LNG. The most vulnerable people in our society are going to be slugged with this new tax.

Government members stand up and say: 'But this is about protecting budget integrity. Why won't the coalition be with us? There are savings of $500 million, or thereabouts.' No, there are not. Do not use economic jargon in here and say that this is about savings of $500 million. Let's call it what it is: a direct tax slug of nearly half a billion dollars. The government say, 'Where is the coalition?' I will tell you where the coalition is: we stand against higher taxes. That is where we are. We stand against this kind of activity because it is about taking money straight out of the pockets of the most vulnerable in our society. That is why we turn our backs on this. We turn our backs on this because the government need to get their house in shape, the government need to make policy changes and the government need to make savings. We will then consider what we can do to have policy integrity, but it will not be through the sweat off the brow of working families in Western Sydney. It will not be off their sweat; it will be because the government start to tighten their belt. When the government do that, we will be serious about so-called policy integrity.

I must say that there is one aspect of this that we are comfortable with. We are very happy to support the fourth bill. That particular bill goes to ensuring that there is equitable treatment when it comes to ethanol and other alternative fuels like biodiesel. We are supportive of that. It is not all about 'No, no, no,' despite what the Labor Party say. We are happy for that bill to go through, but that requires the government to do something. It requires the government to stop being quite so tricky. It requires the government to recognise that the first three bills need to be put to one side and then the final bill will be passed by the House. At the moment, the government are into playing tricky games and are insisting that all four bills be passed or none be passed. As the coalition and the dissenting members of the committee said, we are happy to support the passage of the fourth bill, but we will oppose the first three.

I call upon the member opposite to take that message back. He and all Labor members need to concern themselves with the passage of the fourth bill, which is the one for which time is of the essence—that one can go through the House and up to the Senate—or they can stand in their tricky political way against all four bills and refuse to allow them to go through. We will not support that. We make no apology for the fact that we will stand up for those Western Sydney families, we will stand up for those 700,000 vehicles that have been converted to LPG and, most importantly, we will stand up for the environment. The reason we will stand up for the environment is that we know that this policy will make environmentally-friendly vehicles—those vehicles with a smaller carbon footprint—less attractive. This government policy will see the emphasis return to traditional fossil fuels. This government policy will see the hundreds of millions of dollars that has been invested in the conversion of vehicles from traditional fossil fuels to, for example, LPG effectively junked.

I reinforce the point to the chamber and, through the broadcast, to those listening. Remember that it is the coalition that stands for a smaller carbon footprint, it is the coalition that stands for being environmentally-friendly and it is the coalition, through its position on this bill, that will stand up for those who are trying to do the right thing by the planet. The coalition and all the members of the coalition on this committee stand by our dissenting report because we know that we will look after working families and we will look after the environment. We still allow passage of the bill for which time is of the essence, but we remain steadfastly opposed to the first three bills because they are wrong for Australia at the wrong time. In fact, tax reform needs to be part of a comprehensive energy platform.