House debates

Wednesday, 7 September 2022

Bills

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

4:00 pm

Photo of Matt ThistlethwaiteMatt 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.

4:12 pm

Photo of Zali SteggallZali Steggall (Warringah, Independent) Share this | | Hansard source

The Treasury Laws Amendment (Electric Car Discount) Bill is an inoffensive bill. It's not too costly and does a little good. It's far than what came before and gives hope of more to come. It's a scale model of this government's approach to decarbonising our economy.

The bill removes the fringe benefits tax from non-luxury, zero or low emissions vehicles from 1 July 2022, designed to encourage in a pretty small way the uptake of electric vehicles in Australia. So it will help the uptake in so far as corporate fleets. I truly hope this little act is an early sign of true action on reducing emissions. For example, in the next budget, perhaps the government will include some sensible suggestions to expand the bill to cover the fuel, electricity and home charger related costs; perhaps it will be broadened to include electric motorbikes; perhaps next month's budget will provide support for the rapid rollout of more charging stations needed to power these vehicles, both for major roads and for people living in home units and inner city houses with no garage facilities; and perhaps the final release of the National Construction Code 2022 will include requirements for charging infrastructure in commercial buildings like those recently implemented in Singpore.

The solutions here will require the support of all levels of government, but clear guidance from this government will accelerate the process. The budget could also provide support for private purchases, the self-employed and SMEs to entice uptake in the non-leasing sector. We could do away with the luxury car tax on electric vehicles altogether, of course, to make them really price competitive. Last month, the minister committed to producing a consultation paper on an electric vehicle strategy. That announcement at the electric vehicle summit opened the door to introducing vehicle emissions standards in Australia—that's good. Electric vehicles are over three times more energy efficient than internal combustion vehicles. They use much less energy because they don't waste energy on noise, heat and cooling in the heat that they make.

We're blessed with an abundance of renewable energy sources. More EVs means that what small, strategic fuel reserves we have—held in Texas—will last longer and one day soon will not even be required. So fuel security can be gained by accelerating this transmission. Energy for EVs is sourced locally. Every EV improves our balance of trade, our carbon footprint, the quality of our lived environment and our national security.

There is widespread agreement from electric vehicle advocates and green groups that vehicle emission standards are the greatest lever that the government can pull to increase the supply and affordability of electric vehicles in Australia. Absent those standards, Australia will remain a supply chain afterthought to major car manufacturers who are using zero-emission vehicles to help meet standards in the rest of the OECD.

Affordability, availability and access to universal charging stations are the key impediments to increased EV uptake in Australia, and I hope the government will engage with that issue of universal charging infrastructure. We are behind the rest of the world but we, at the very least, have an opportunity to make sure that, when we implement that charging infrastructure, we make it universal so there is no difference and no disadvantage depending on what type of EV people purchase.

I look forward to the government introducing fuel efficiency standards soon so we can move from being paired with Russia and join the rest of the OECD in having the standards that drive availability of low-emission vehicles. Widespread adoption of EVs would help reduce the carbon impact of transport, which is our fastest-growing emissions sector; it's some 17 per cent of our carbon footprint. This is low-hanging fruit where we can absolutely fix and reduce our emissions. If just 10 per cent of Australia's light vehicles were to provide vehicle-to-grid power, we could provide nearly three times the overnight power capacity of Snowy 2.0. That is the power EVs can have in our system.

There is no single silver-bullet solution to our future energy needs, but the current demands of the transportation sector, coupled with the many opportunities afforded by a mobile battery fleet, and charging stations to power that during the day, are the types of challenges and opportunities that suit the Australian spirit. It's time we got back to being leaders.

The previous government handed a quarter of a billion taxpayer dollars over to two oil refineries in April just this year. I would argue that that was raiding the bank on the way out of the door. There was $3.8 billion taken from the budget bottom line by the cuts to the fuel excise that is due to finish in just a few weeks. The cost of this bill pales by comparison. Why not match or redirect that subsidy to support a national battery strategy? Let's start supporting our industries of the future. Let's be in the supply chain instead of waiting around at the end of it.

Perhaps that will happen, but the adoption of a target of 43 per cent by 2030 by the government has given me and many in my community much cause for concern. I would argue that a 43 per cent target is small thinking; it's safe thinking; it's 'kick the can down the road' thinking. It's a net result of small acts ticking small boxes, making slight progress. We need commitments that drive this as a floor to ambition, not an aspiration. At the jobs summit last week, Ross Garnaut outlined, as he has done so many times before, the breadth of opportunity offered, and thus far refused by successive Australian governments, in our transition to net zero.

Australia is at a crossroads. We face two paths. One is small thinking, safe thinking, and inoffensive, small actions—it's a seductive path. I know it's a politically safe path, and governments can follow it, but there is so much more potential, so much more opportunity. I urge the government to commit to a steeper, braver, more ambitious path—one that will involve more work, but it is one that will deliver for Australia. It's a path that involves restructuring Australia to take advantage of the massive opportunities offered in the carbon-free industries. This century is a century of renewable energy, and the longer we shy away from that the further we get from our future path and the more opportunities we miss.

Previous Labor governments have indeed been ambitious. They have made changes to security, education, financial systems and superannuation. These changes were not always easy. They weren't comfortable or even popular, but the measure of a great government is sometimes taken some 30 years down the track. It's not with small measures like those in this bill that you are going to really leave a legacy. It has to be bigger and more than that.

When a third of Australia voted for minor parties and Independents in May, they voted not just for climate action; they voted for more vision, for politics over the long term, for more action when it comes to embracing opportunities. Australians are tired of being small, being behind the rest of the world and governments being afraid to embrace opportunities. We know now that there is a unique opportunity in our lifetime to establish our economy for the future, to genuinely set future generations up. The prior government refused to do this. I don't know if it was out of ideology, ignorance or opportunism. There was just an unwillingness to do it. Should this well-meaning government—and we hear a lot of talk, and there have been good actions—fail to act now, out of fear, out of political opportunism, just to hang on, then you also will be judged, and the question will be: who really missed the opportunities? We only have eight years till 2030. We need policies that are ambitious, that make big steps. We can't do it in baby steps. So, whilst I welcome this legislation, there is so much more that can be done when it comes to our transition to clean transport and to electric vehicles. I urge the government to do it without delay.

4:21 pm

Photo of Libby CokerLibby Coker (Corangamite, Australian Labor Party) Share this | | Hansard source

Australia now has a government that gets climate change and understands the steps needed to reduce carbon emissions. After a decade of denial and delay from the previous government, we now have the opportunity to give Australians access to the world's best low-emissions car technology. This is especially important because passenger cars create almost 10 per cent of Australia's CO2 emissions. Serious action on climate must involve serious action on transport emissions. That's why the Albanese government is putting in place the steps to establish Australia's first National Electric Vehicle Strategy. The focus of the strategy will be on improving the uptake of electric vehicles and improving affordability and choice by growing the Australian electric vehicle market.

It's clear that Australians want to move towards cleaner car technologies like electric vehicles. Australia is a nation with a reputation for embracing new ideas and new technologies. After all, Australians led the world in the take-up of mobile phones, ATMs, electronic online banking and a range of other technologies. And we know that Australians care about the impact of climate change and want to play their part in reducing carbon emissions.

As I drive around my electorate of Corangamite, I see an increasing number of people making the change to electric or plug-in hybrid vehicles. It's no longer an oddity to see an electric car sitting in a driveway or pulling up beside you at the traffic lights. Despite a very unfriendly policy setting under the previous government, Australians have managed to edge up electric vehicle and plug-in car sales. They are now two per cent of total car sales, off an appalling base of 0.7 per cent in 2019. While this is a small step forward, it isn't enough. Despite a willingness to embrace new technologies, cost and affordability are holding us back. The cost and limited range of available electric cars in Australia excludes many from giving up their petrol or diesel vehicle.

Australia is significantly behind much of the world when it comes to electric vehicles. I learned recently that, in the United Kingdom, people could choose from 26 low-emission vehicles under the equivalent price of A$60,000. By comparison, in Australia there are fewer than 10 such vehicle options. At just two per cent, our uptake of new low-emission vehicles is nearly five times lower than the international average. In the UK, for instance, electric and plug-in hybrids make up about 15 per cent of cars sold. Australians can't afford to continue to be left behind. Australians don't want to be left behind. Australians are experiencing significant cost-of-living challenges right now, and giving Australians better fuel options for their vehicles is one means of easing those cost challenges.

In 2019 the Australian Electric Vehicle Association estimated there would be, on average, annual savings of $500 in fuel and $100 in maintenance costs for every electric vehicle in the national fleet. Respected UBS estimates projected consumer savings of $1,700 per annum by 2030 on the total cost of ownership of an electric vehicle compared to combustion engine vehicles. The arguments for electric vehicles are strong and well established.

Unfortunately, unaffordability and unavailability issues within the Australian electric vehicle market are, in large part, a direct result of policy decisions of the government—or, more correctly, policy failures by the previous government. The intent of the electric car policy in Australia up until now appears to have been aimed at limiting the availability of electric cars and making them more expensive—a short-sighted approach that lacked logic. Who can remember the ridiculous comments made by the previous government around EVs destroying the tradies' weekends? They wouldn't be able to afford their utes anymore! To me, this should ultimately be a matter of choice—freedom of choice. Policy settings under the previous government were denying Australians real choice for good, affordable, no-emission cars. When asked, more than one in two Australians say they would consider buying an electric vehicle for the next car.

The previous government's policy settings mean we are now behind the pack. Australians are missing out, and without strong federal leadership we will continue to miss out. The Albanese government will provide that necessary leadership. We know from overseas experience that with the right policy settings electric vehicle penetration can increase quickly. Sweden, for example, increased its proportion of EV sales from 18 per cent to 62 per cent in just two years. We know from overseas that once you get to five per cent sales EV penetration in the market can increase rapidly as critical mass is reached. We as a government and as a nation have a lot of work to do to catch up to the world.

The Albanese government is bringing back leadership that has long been lacking. We went to the election with a clear agenda across the board for tackling climate change, including with electric vehicles. The government's Driving the Nation plan will establish a truly national electric-vehicle charging network, with charging stations at an average interval of 150 kilometres on major roads. It will create a national hydrogen highway refuelling network and it will set a low-emissions vehicle target for the Commonwealth fleet of 75 per cent new leases and purchases by 2025. With thousands of vehicles in the Commonwealth fleet, it is big enough to encourage more EV modelling introductions to Australia and will expand a resale market.

We're acting to make electric vehicles cheaper through the removal of the fringe benefits tax and the five per cent import tariff for eligible electric cars. This is significant. Effectively, there will be an electric car discount in the form of a fringe benefits tax exemption. The fringe benefits tax changes mean a vehicle model with a price tag of around $50,000 will be up to $4,700 a year cheaper for someone using a salary sacrifice arrangement. That is an appealing offer—$4,700 a year cheaper for someone. An employer paying for the same model could save up to $9,000 a year. These incentives are critical for fleet buyers and, in turn, the second-hand market.

We also believe we can and should have not only the ability to drive electric vehicles but also the capacity to produce them. Up to $3 billion of the $15 billion National Reconstruction Fund will be put towards activities including clean-energy component manufacturing. There is great potential for the electric vehicle industry to be actively pursuing opportunities for co-investment from that fund.

Those opportunities are particularly relevant to my electorate of Corangamite and the broader Geelong region, which has a proud history in vehicle and high-tech vehicle componentry manufacturing. Manufacturers in my area are already considering the possibilities that will emerge in electric vehicle component manufacturing. They're coming to me and asking me about this fund. They want to be a part of it, and I'm going to encourage them, under the National Reconstruction Fund, to get involved. There will be no shortage of opportunities and activities in regard to electric vehicles under an Albanese Labor government. The key to linking all of this activity together is an overarching strategy, which is why our government is committed to the development of Australia's first National Electric Vehicle Strategy.

The government's objectives in relation to electric vehicles are clear. We are moving to make electric vehicles more affordable, drive more choice in the market, drive electric vehicle uptake and reduce emissions. Other benefits will include savings on fuel for car owners and potential local manufacturing opportunities. The Electric Vehicle Strategy will be our road map to become a leader in reducing emissions from car transportation. If Australia doesn't show leadership through a strategy of this type, international manufacturers will prioritise other markets.

We know many of the challenges. They include lack of charging infrastructure, limited range, high costs, long waiting times and lack of availability. These are big challenges. While the solution to each challenge is different, the solutions ultimately will come back to one thing: strong, decisive policy leadership from government—leadership the Albanese government will provide.

The bill before us today is part of that leadership Australians have been looking for on climate action. We will provide that leadership in a way which brings Australians together on the journey. Our Driving the Nation policy for a fast charger every 150 kilometres, for example, is designed to ensure Australians in rural and remote communities like my electorate of Corangamite will have real choice when it comes to their next car purchase. Electric vehicles are not and cannot be the preserve of the well-off and urban dwellers. We are implementing policy settings that make electric vehicles affordable and attractive to all. This bill is important. It will be an important catalyst for reducing carbon emissions through the increased uptake of electric vehicles.

4:32 pm

Monique Ryan (Kooyong, Independent) Share this | | Hansard source

I commend the government for moving to improve affordability of electric vehicles via the Treasury Laws Amendment (Electric Car Discount) Bill 2022. Electric vehicles are at the forefront of a major transformation of the world's transport sector. Widespread use of EVs in the Australian transportation fleet will deliver significant economic, environmental and health benefits to Australian consumers and to our society. It will also create new opportunities for Australian industry.

Global EV sales are growing rapidly, driven by government policy and large consumer markets in Europe, Asia and North America. EV uptake in Australia has previously lagged behind that of comparable countries due to a lack of support from Australian governments. The greater cost of EVs, concerns about driving range, deficiencies in our recharging infrastructure and limited range of available models have all been key factors hindering uptake of EVs in this country.

The No. 1 barrier to transport electrification in Australia is the poor supply of EV models across all vehicle segments. There are hundreds of EV models available overseas. Only a small fraction of those cars are being supplied to Australia. This supply issue has been policy driven. It has been due to Australia's lack of fuel efficiency standards and of any other supply policies, such as sales mandates. To achieve net zero, Australia needs to significantly increase its EV uptake. This will only be achieved through increased supply.

There are many ways to increase EV uptake in this country. The Albanese government policies being announced today and debated in this chamber are a step in the right direction, but only a small step. We need to support Australian manufacturers in engaging with EV component manufacturing and assembly. New industries such as charging-infrastructure manufacture and installation; battery manufacturing, recycling, repurposing and related mining and processing activities; and EV research and development are emerging as growth sectors for the Australian economy.

We would benefit from clarity regarding EV sales targets, which would deliver certainty to businesses and to consumers. This government should set EV targets for the Australian government fleet. It should work with state and local governments to coordinate fleet procurement. It should partner with businesses to manage and facilitate the rollout of charging infrastructure, to establish consistent national standards and to ensure that all new building developments and our electricity grid are EV charger ready. This government should help industry to develop its domestic EV manufacturing and supply, and its value chain capabilities. The bill presented today removes the five per cent import tariff on some imported EVs and the 47 per cent fringe benefits tax on electric cars provided by employers. While these steps will make EVs more affordable, growing sales and long waiting lists for EVs in Australia have long demonstrated that our EV uptake is limited not by consumer demand but by supply constraints.

How can we address those supply constraints? Fuel efficiency standards are used to regulate the average carbon dioxide emissions of manufacturers' fleets. They serve to reduce both fuel consumption and carbon dioxide emissions. They've been adopted in most countries worldwide. Australia, Turkey, Indonesia and Russia are the only G20 countries with no mandatory standards for fuel efficiency. Put simply, this means that manufacturers have no incentive to put their best cars on our market. We've become a dumping ground for vehicles that fail to meet efficiency and emission standards in Europe, the US and Asia. We get the cars no-one else will take, because our governments have never previously moved to set fuel efficiency standards—and related fuel quality and vehicle emission standards—comparable with other major markets around the world. Fuel efficiency standards will incentivise manufacturers to bring their low- and zero-emissions vehicles to Australia, and will penalise them for failing to do so. Adopting fuel efficiency standards will open the Australian market to EVs.

What else will it do? It will save us money. Modelling has shown that legislating targets for fuel efficiency for vehicles sold in Australia will save us money. The average car user in Australia will save between $237 and $519 a year from using less petrol. Those calculations were based on a fuel cost of about $1.30 a litre—much, much less than the current price of petrol. And that did not include the additional $140 per vehicle per year of healthcare costs related to vehicular pollution.

Addressing supply constraints with fuel efficiency standards will also reduce our greenhouse gas emissions. Emissions from passenger and light vehicles represent 57 million tonnes—10 per cent of Australia's total carbon emissions. There are about 24 million cars on Australian roads, and less than one per cent are electric. The average car sold in Australia stays on our roads for 15 years. Electrified transport can be powered by renewable energy. The zero emissions from running these vehicles will decrease our carbon emissions by 10 per cent.

Australia has the dirtiest petrol in the OECD. Every year in Australia, more people die from respiratory diseases related to vehicular pollution than from road traffic accidents. Transitioning away from internal combustion engine vehicles will improve our air quality. It will reduce pollution related diseases and improve our health. The price of petrol has skyrocketed. We've all felt the pinch from that in the last 12 months. Australia has only two fuel refineries. We've struggled in recent years to comply with the International Energy Agency's minimal stock-holding requirements for liquid fuels. Boosting EV uptake and investing in renewables will help address our fuel insecurity. It will reduce our reliance on imported fuel. Cars like the Ford F-150 Lightning can tow up to 2,000 kilograms. They can work as a mobile generator for tradies. They can power our homes. They are enormous mobile batteries with a free car thrown in. They won't kill our weekend, but they will slay in the camping ground.

In the short term, we need our government to shape the direction in which our EV market is moving. The Albanese government has to introduce robust fuel efficiency standards equivalent to global best standards. These will cost us nothing, but they will ensure that manufacturers supply a greater range of affordable EVs to our market, rather than offering us only polluting internal combustion engine vehicles that no-one else wants and the luxury end of the EV market. The government has signalled that it intends to canvass the community regarding fuel efficiency standards. It needs to do more than that; it needs to act. Yes, we also need expanded charging facilities. Yes, our corporate and government fleets should commit to large-scale EV purchases, increasing the supply of second-hand vehicle in this country in the second half of this decade. Yes, we need package incentives. Yes, we need better vehicle emission standards for non carbon dioxide emissions, which will also have implications for our health. Each of these steps will contribute to our move to cleaner, healthier transport options.

Anyone interested in an immediate decrease in our carbon emissions achievable by rapid electrification of our transport system will welcome the bill that we're debating today, but these changes are only baby steps. The FBT scheme has been costed at only $20 million for the first year, implying that the scheme will benefit only around 2,000 vehicle owners. The fringe benefit tax is available only to employees who have the ability to salary sacrifice; it's not available to all people looking to buy a new car. The FBT saving applies only to those cars priced below the luxury car tax threshold for fuel-efficient vehicles, which this year is $84,000-plus. It excludes more expensive EV models which constitute a very significant part of the existing EV market in this country, and it has no immediate impact on the second-hand car market in this country.

The next move for this government must be the immediate setting of international best practice fuel efficiency standards to improve our health and improve the quality and range of cars offered for sale into this country. We need ambition and vision from this new government, and we need it now.

4:42 pm

Photo of Josh BurnsJosh Burns (Macnamara, Australian Labor Party) Share this | | Hansard source

I am very pleased to follow the member for Kooyong, and I'm pleased to inform the member for Kooyong that the government does have an electric vehicle government fleet policy. It's to get 75 per cent of government fleets electric by 2025, unless I'm much mistaken, as well as having 1,800 charging stations around the country on our national highways, so that, in a few years time, people will be able to take their electric vehicles from one part of the country to another part of the country with confidence, knowing that they'll have access to efficient publicly available charging stations. I do agree with the member for Kooyong that fuel emission standards are a gap in Australia's policy framework, and I was very pleased and very heartened to hear the very forward-leaning comments made by the Minister for Climate Change and Energy in the significant work on fuel emissions standards he has done since coming into office just over 100 days ago. I look forward to the government doing more work and having constructive engagement with members like the member for Kooyong to help achieve this for our country.

In Macnamara, in Port Melbourne, we have a proud history of manufacturing Australian cars. Holden was based in Port Melbourne for decades. I was actually in this building working as a staff member on the very famous day in 2014 that then treasurer Joe Hockey famously goaded the Australian car industry to leave our shores. At the time, we had quite a high Australian dollar and the price of our vehicles was high but we knew that that was going to pass and that the Australian products were going to become competitive again as they had been during fluctuations throughout history. Instead of backing in Australian manufacturing and instead of backing in Australian jobs and Australia's research and development industries, the then government goaded the car industry to leave, and that's exactly what happened. And, in Macnamara—

I could get into an argument with the interjections from the member for La Trobe about the ways in which they have spent millions of dollars. These are the people who spent $5.5 billion not to build a submarine. Let's not get into that debate.

When talking about the car industry, in Macnamara we are talking about what was the largest employer not just of people on the floor of our auto manufacturers—really good, solid jobs assembling pieces of Australian machinery—but the largest employer of researchers and developers in the country. This industry, our car manufacturing, employed more engineers and research and development people than any other industry. It was a massive investment in Australian capability, in Australian thought, in Australian science and in Australian engineering, and it's gone. We have a lot of work to do to get it back. But electric vehicles, components of electric vehicles and subsidiary businesses that can feed into supply chains for electric vehicles are a really exciting chance for Australia to be able to get back into the manufacturing of vehicles.

This bill, the Treasury Laws Amendment (Electric Car Discount) Bill 2022, goes to taxation reform. It goes to taxation reform because electric vehicles are too expensive for Australian consumers but the demand by Australians is massive. If you go to Toyota right now and say you want either a hybrid or an electric vehicle, you're talking about a two-year wait at least. To get a Tesla it's a 12 month wait. To get an electric vehicle from Hyundai it's a two-year wait. The supply chains are quite pressed. But it's also because Australia hasn't been welcoming. Due to a range of issues—like fuel emissions standards and incentives for car companies to produce affordable electric vehicles for the Australian market—we are in a position now where we have one of the worst ratios of electric vehicles to fuel combustion vehicles anywhere in the developed world. You stop and ask yourself: why on earth are we in this situation in Australia, a relatively wealthy and successful nation that likes its car? If you've been in an electric vehicle, you know it's a pretty exciting, turbulent ride in some of them. Why on earth are we in this situation where Australians don't have access to affordable electric vehicles? Part of it is because of the price, and this bill obviously addresses some of the tax concessions.

Let me read you some of the politics that have occurred in the electric vehicle realm or ecosystem over the last years. In November 2021, we were reminded that in April 2019 the then Prime Minister, Scott Morrison—the member for Cook—said:

Bill Shorten wants to end the weekend when it comes to his policy on electric vehicles …

I don't even know how an EV ends the weekend, but that was the attitude of the former Prime Minister, who then had the gall to deny in a later video that he had ever said that, as if we couldn't get the footage of him saying that and put it next to the footage of him denying saying that in the same video. Then there was the former Attorney-General Senator Cash, who said this:

We are going to stand by our tradies and we are going to save their utes.

I don't even know what that means, but it's absolutely absurd. Most recently, there was a doozy made by the new Deputy Leader of the Liberal Party, the former Minister for the Environment, who said:

And no one in the world is making an electric ute, by the way, and even if they were it would be unaffordable.

Well, it is astonishing. Mitsubishi and, I think, Ford are making electric utes. There are a number of car manufacturers, including General Motors, making electric utes. Those opposite have not only had a history of goading the car industry off our shores—

I take the interjections from the member for La Trobe. I am not talking about the member for Kooyong or the member for Mackellar; I'm talking about him and his ridiculous team's attitude towards electric vehicles over the last decade, which meant that we not only lost car manufacturing in this country, including in my electorate with the Holden plant, but also lost progress, opportunity and the possibility for Australian manufacturers, as well as Australian consumers, to have access to electric vehicles.

We are going to change that. We are going to make electric vehicles more affordable. As the member for Corangamite correctly said, there are no electric cars available in Australia under $40,000. In a time of high inflation and stretched household budgets, it is simply not an option for Australian households to be spending more than $40,000. In fact, $40,000 is way too expensive.

Think about some of the young people as well. When I walk around Macnamara and I speak to young people—and I'm sure members in this Chamber would have had a similar experience—you find that the idea of treading softly on our planet and leaving as small a footprint as we possibly can is something that is deeply personal to our fellow Australians, including our young Australians. Yet they have absolutely no ability to purchase an electric vehicle. They are completely priced out of the market, and many of them rely on a vehicle to work and to go to their place of employment. We need to change that. It needs to be affordable for young Australians.

A part of that is making it cheaper, and the other part of it is producing and purchasing as many electric vehicles as possible as part of government fleets. We use government fleets for about three years and then we put them into the second-hand market. We need good, reliable, relatively new cars to be entering the second-hand market to produce downward pressure on car prices and to address some of the supply chain issues.

I hope that for young people we're able to address the affordability of electric vehicles, because other countries have. Other countries have had an aggressive policy where they have sought to pursue incentives for car manufacturers to increase fuel emission standards but also to incentivise electric vehicles and to have a range of policies that make electric vehicles more affordable and more accessible for their citizens. We in Australia need to catch up, because we should be making car components in Australia. We should be making all of the components.

There is a famous score called the Harvard score of economic complexity which basically looks at how much value we are adding into our economy. Right at the top you have Japan, a high-tech economy, constantly looking at ways to add science and mechanics to their products. You then have South Korea, Singapore, Germany and Switzerland. These are the countries at the top of the Harvard score of economic complexity. Even the United States, with Silicon Valley; and the United Kingdom, with many of their advanced technologies, are at No. 10 or No. 11. Australia, I believe, currently is at No. 86, in between Paraguay and Uzbekistan. No offence to our Uzbek and Paraguayan friends, but we really should be better than that. We really shouldn't just have an economy where we dig things up and sell them off to another country to add value over there. We should be adding value in Australia.

To incentivise and engage constructively with industry and to make electric vehicles a product that Australians are not only making but purchasing is something that is so important for Australian businesses, for the future of Australian manufacturing and for the future of our efforts to tackle climate change. Vehicle emissions account for roughly 10 per cent of our emissions as a country. We need to change that. We need to put more electricity into the grid so we that we can have access to them, and a good way to start that work is via this bill. I would encourage all members of the House to support it. It's an excellent piece of legislation, and I commend it to the House.

4:53 pm

Sophie Scamps (Mackellar, Independent) Share this | | Hansard source

Electric vehicles represent an incredible opportunity for Australia. We can transport Australians using electricity generated from the solar panels on our rooftops and from our enormous renewable energy zones. This will transform our relationship with energy and reduce emissions simultaneously. Only last month, this House passed the Climate Change Bill 2022 and the target of 43 per cent emissions reduction by 2030. That is less than eight years away. The time is ticking.

Each sector must do its bit, and the cost of reducing emissions in the transport sector is comparatively low. Transport makes up nearly 20 per cent of Australia's emissions, and these emissions are rising. Transport emissions have increased by 14 per cent since 2005. This is a big truck to turn around. But we can achieve what has already been done in other countries, and that is making electric vehicles affordable, accessible and reliable for everyday Australians.

To do this, however, attendees at the recent national EV summit agreed that ambitious policies from the government are required. At that summit, ministers from New Zealand, and the US ambassador, told us about what was happening in their countries. They told us of a future with EVs of unlimited upside; a future in which innovative Australian businesses pave the way to net zero; a future where we mine, process, and manufacture batteries using our critical minerals, cheap renewable energy and skilled workforce; a future where our Aussie sunshine and wind provide secure and stable energy; a future where everyday Australians use their car batteries to power the country; a future where EVs are affordable for Australian families and businesses; and—we've all been using the same line—a future where electric vehicle utes make the weekend fantastic. Other nations are already living this future. In Norway, over 70 per cent of new cars sold are electric.

The Treasury Laws Amendment (Electric Car Discount) Bill 2022 shifts Australia into first gear when it comes to electric vehicles. This bill removes the fringe benefits tax for new electric cars purchased by employers for use by employees—cars that are under the threshold for the luxury goods tax. This will increase the number of affordable EVs in the Australian market, particularly as these vehicles move to the second-hand market over time. It is estimated that business buyers account for over 40 per cent of the new light vehicle sales in Australia, but their uptake of electric vehicles is shockingly low, with a mere 487 electric vehicles acquired by business fleets in 2020.

To ensure we increase the use of electric vehicles in this country, we need this legislation to focus on electric vehicles and not cars that use fuel. Cars that use fuel include hybrid vehicles. Plug-in electric hybrids are, in fact, petrol cars that happen to also have electric motors. Despite plug-in electric vehicles having the potential to run 85 per cent of the time on electricity, research has shown that, in practice, they run 85 per cent of the time on their fossil fuels. This research includes the experience of the ACT government, and it shows that plug-in hybrid cars emit vastly more emissions than expected when driven as fleet vehicles. The reason is simply a behavioural one. Quite simply, employees don't bother charging the car. Effectively, if plug-in hybrids are included in this bill and included in the fringe benefits tax exemption, the unintended consequence will be that this bill further subsidises fossil fuel use. I am hopeful that I will be supporting an improved version of this bill on its return to the House from the Senate—one that excludes hybrids.

With this legislation, employers have the potential to save $9,000 per vehicle. That is significant. It will drive the market. It is, however, not enough on its own to deliver cost parity. The upfront cost of owning an electric vehicle is the biggest hill to climb. I am voting in favour of this bill, but I would have more confidence if it were part of a broader strategy that is multifaceted and comprehensive. I call on the government to implement additional policies that will fix Australia's electric vehicle supply problem—to ensure that there are enough electric vehicles on the market here so that every business and person who wants an EV can actually get an EV.

Vehicle fuel efficiency standards are next off the rank—a focus that my crossbench colleagues and I are also championing. The standards discussion paper announced by Minister Bowen moves us closer to being in line with best practice globally. These standards need to be ambitious and aligned with the Paris Agreement. However, only a few weeks ago, we saw leaked reports of the automotive industry's cynical plan to undermine the push for fuel efficiency standards. Vehicle particulate pollution is responsible for thousands of deaths in Australia each year. Research also shows that exposure to particulate pollution impacts our cognitive function. If a young person, say in their 20s, is exposed to a high-pollution day, their cognitive level will be increased by 30 years. A 20-year-old will have the cognitive function of a 50-year-old—not that I think that's too bad!

Ordinary Australians want us to get on with the job. Australians do want electric vehicles. In fact, only last month new electric vehicle sales hit a record high, and many thousands more are on waiting lists. But electric vehicles currently make up only 4.4 per cent of cars sold here in Australia because of the significant lack of supply. Mackellar, my electorate, gets it. Our famous B-Line buses are going electric. EV charges are being rolled out across the Mackellar electorate. People in Mackellar want cleaner air, they want to reduce their petrol costs and they want to play their part in reducing emissions. Mackellar wants to see more electric vehicles on the roads.

It's not only about making electric vehicles affordable and accessible for everyday families—it's also about positioning Australia as a renewable superpower. For this we need to look at what is happening in America. In the US the Inflation Reduction Act is a game changer. It's big and bold—it's not just tiny tax tweaks. It will unleash a deluge of electric vehicle models and innovation. It's time to put our foot down and accelerate EV policy here in Australia. As parliamentarians, let us collaborate, coordinate and capitalise on electric vehicle opportunities. After years of inaction, let's lead. This bill is the first gear, but it's a welcome start.

5:01 pm

Photo of Josh WilsonJosh Wilson (Fremantle, Australian Labor Party) Share this | | Hansard source

It's great to speak on the Treasury Laws Amendment (Electric Car Discount) Bill 2002, another instalment in the rapid progress that the Albanese Labor government is making to help decarbonise Australia and make sure that Australian households and businesses are able to participate in one of the great changes of the 21st century. To some degree, you could say that this is enabling households and businesses to get on board with a trend that is without question a significant part of our future and the world's future, but in many ways it's not really in the distant future—it's happening today in lots of other countries to a massive extent, but not in Australia.

We've fallen terribly behind. It means that Australians miss out on savings in terms of running costs, especially in the face of volatile fuel prices. It means we're not getting the benefits in terms of emission reduction, and we need to make emission reductions in lots of parts of Australian life. So far, the reductions that have been made—which have not been enough—have been in the energy generation space and in foregoing planned land-clearing, but we've made virtually no progress in terms of emission reductions in other sectors like transport, agriculture, industry and others. This will contribute to that.

There's no doubt, as the previous speaker said, that vehicle pollution is a big issue. It's a massive issue around the world, but it's a big issue here in Australia, not least because we don't have some of the fuel standards and related emission standards that are pretty common in other parts of the world. We shouldn't kid ourselves just because we live in Sydney, Melbourne, Perth, Adelaide, Hobart or Darwin. We might think, 'It's not Mexico City or New Delhi—it's not a megalopolis which we tend to associate with the impacts of poor air quality, vehicle emissions and pollution.' The reality is that, by many measures, people in Australian cities are being exposed to unhealthy levels of vehicle emissions. That is something that we will address as we move to decarbonise our transport sector, moving off hydrocarbons and into electric vehicles and, potentially, hydrogen vehicles.

It's also really important for liquid fuel security, something I've spoken about throughout my time in parliament. We really should hold on to that. Australia is extraordinarily dependent on liquid fuel. We are the only nation that has been way out of compliance with the IAEA fuel stockholding requirements for a long time. It's very hard to see when we'll ever get back into compliance. We've made a commitment to do that by 2026, but the previous government didn't do much on that front. Mining and agriculture in Australia is 90 per cent reliant on liquid fuel and our transport sector is 99 per cent reliant on liquid fuel.

Of course, when it comes to electric cars at the household level—for passengers, in households around the country—we are in a woeful position. We are by capita the third-highest owners of vehicles in the OECD, but we have one-seventh of the uptake of electric vehicles of car-loving countries like the United States and Canada. Really, there is only one reason why we are in that terrible state, and it is because of this bizarre blind spot, if you want to be kind, that the previous government suffered. You can see it is a blind spot. You can see that it is irrational, delusional and all of those things by the way the members of the former government and members of the current opposition talk about this issue—even after the election. In recent weeks, the Deputy Leader of the Liberal Party boldly made the claim that there were no electric utes available—that they were not in production, that they couldn't be bought and that they didn't exist on planet Earth. That is just bizarre as well as categorically wrong.

You can only make those kinds of statements when you have gone off into a kind of 'la la land' where you have taken a particular, twisted, baseless sort of view of world and you're going to prosecute that over and over in the face of science, evidence, rationality and everything else. It is a pattern of behaviour that we saw from the former government in lots of areas. We certainly saw it on almost anything to do with climate change or renewable energy, and we certainly saw it in relation to electric vehicles—these wild claims that they would end the weekend; that they did not exist; that they weren't viable; that they would never happen—while the rest of the world marched ahead.

So what is the result? If you look at our performance in an area like household solar, we see that we are literally the world leader, because the former Labor government decided it was time to make a change and get us on the path of sensible renewable energy at the household level, and that kicked off a home solar revolution. We went from having fewer than 12,000 households with solar PV in Australia in 2007, at the end of the Howard government, to two or three million plus now. We have the highest level of household solar penetration in the world, and it has begun to make a significant difference both in reducing our reliance on power that is generated by hydrocarbons but also in decentralising our power system and giving households relief from cost pressures. Electric vehicles will do exactly the same.

We had to change the government to get something done because, until that happened, Australia was being steered by people who were literally making things up and inflicting their weird daydreams or nightmares or whatever you want to call it on the Australian people. Apart from the fact that it has meant that we now start from this position behind many other countries in the OECD, it has meant that, while we talk about cost-of-living pressures at the moment, many more Australian households and businesses are at the behest of global fuel prices. If only a sensible approach had been taken to this issue a decade ago, many fewer businesses and households would be exposed and vulnerable in that way.

It has also meant that, at various times over the last three or four years, we have had liquid fuel coverage, in terms of petrol and diesel that is not much more than three weeks—somewhere around 21 or 22 days. If for any reason there was interruption to our supply of liquid fuel, there would be a crisis in this country—and I say this cautiously—that would make some aspects of what we experienced through the pandemic actually look pretty mild by comparison. Our transport sector is 99 per cent reliant on liquid fuels and most of what moves around in this country moves around by road or by rail. We've gone from having five refineries not that long ago to having two refineries, so we can't import crude and refine it ourselves to the same degree. We're more reliant on imported, refined fuel, which of course has a shorter shelf life. That's made our liquid fuel insecurity more fraught.

So there are lots of reasons to make this change. It's not, as the other side would have it, so that people can indulge in some personal consumer choice. That has literally nothing to do with it. It is so that we can be part of a global industrial change that has marched on a long way already, and we are miles behind. We are miles behind because of that delusional stance by the previous government, and it's had an impact on people's bottom line and it's made us more vulnerable. This government's not going to do that. This government is doing something about it within a short time. We're beyond the 100-day mark now, but not much beyond it.

This bill will make electric cars cheaper and will increase the supply of electric cars. In keeping with the approach that we've taken to a number of areas, we're doing something right now, but we're also looking at the changes that need to be made in the medium and longer term. We've got the discussion paper out on the National Electric Vehicle Strategy. We've said that we're going to use the weight and the influence of government procurement contracting, leadership in government procurement contracting, for a target to ensure, quite rightly, that 75 per cent of government fleets are electric by 2025.

We've made a commitment to a national charging network, which is obviously critical as people take up electric vehicles and need to be able to go further and further afield. I can say as someone who comes from Western Australia that that is critical, not just because once you leave metro Perth you are in rural and regional Western Australia but also because we are the largest and the most remote state. I know from electric car purchasers and car-owner groups in my electorate and in Western Australia more broadly that they want to see that network extended. Some of them have actually crowdfunded and used other fund-sourcing methods to put charging-point infrastructure out in rural and regional Western Australia so that they can drive their vehicles further.

All of these things are being done to address what has been a terrible blind spot in our technological and transport policy settings.

I welcome this bill. I think it's momentous. I know that people in my community will benefit from it. I know that businesses will benefit from it. And I know that it actually improves our liquid fuel security, which is a serious vulnerability that, for all the chest beating that sometimes happens on the other side, has been neglected for 10 years.

5:12 pm

Kylea Tink (North Sydney, Independent) Share this | | Hansard source

I rise today to speak to the Treasury Laws Amendment (Electric Car Discount) Bill 2022. The time for climate action is now, and I believe we should be pulling all levers available to ensure a rapid and efficient transition to a net zero economy. Every aspect of our economy must contribute to Australia's target of a 43 per cent reduction in emissions by 2030 to help get us on a trajectory to no new fossil-fuel vehicles by 2035. Electric vehicles are an important step towards meeting our climate ambitions and reducing the growing contribution from the transport sector, which currently accounts for 16 per cent of Australia's greenhouse gas emissions, with light vehicles alone accounting for 10 per cent.

The truth is that Australia has fallen far behind our international peers when it comes to EV use, with one of the lowest rates of adoption of electric vehicles among the OECD countries. Having said that, however, it bears reflecting on whether this outcome is a true reflection of consumer desire or sentiment, or whether it is a reflection of and an outcome that is a direct consequence of a lack of appropriate federal government leadership over the past decade.

Very few people in Australia can currently access an EV, even if they have the financial resources to do so. At this point in time, there are only 10 electric and plug-in hybrid cars on the domestic market that are selling for less than $60,000. A key barrier to increasing the number of makes and models of cars for people in our country is that our market is one of the last markets in the world where manufacturers can literally sell their least efficient vehicles, powered by some of the dirtiest fuels, and one where manufacturers currently only supply a handful of EV models at high prices, creating a vicious circle of low supply. A key barrier to increasing the number of makes and models of cars for people in our country is that our market is one of the last markets in the world where manufacturers can literally sell their least efficient vehicles powered by some of the dirtiest fuel, with manufacturers currently only supplying a handful of EV models at high prices, creating a vicious circle of low supply.

The bill we are debating today aims to help ensure and encourage greater uptake of electric vehicles and reduce our transport emissions as part of the government's broader climate agenda. By reducing the upfront costs and ownership costs of electric vehicles, the bill is addressing a significant barrier to buying them. As an outspoken advocate for faster, cleaner transport for all, while I support the intention of this bill, I think there are some improvements that could be made to it to ensure the opportunity and benefit from this reform is available more equitably across Australia.

To achieve faster, cleaner transport for all, it is imperative we do two things. We need to increase the volume of electric vehicles and ensure that the incentives and infrastructure are there to accelerate the uptake of the available EVs. In this context, the bill currently drafted allows second-hand cars manufactured after 1 July 2022 to be eligible for the fringe benefits tax exemption. Given this, while the bill as it stands will eventually lead to lower priced second-hand electric vehicles for Australian consumers, the process of building that second-hand market will have unnecessarily been delayed by three to four years. With three out of every four vehicles bought in Australia every year being second-hand and in the face of the climate challenge we are facing, we can and must do better.

I will be moving an amendment to the bill that will extend the FBT exemption to imported second-hand vehicles that meet two main criteria. Firstly, my amendment would cover second-hand cars that were manufactured on or after 1 January 2020. This ensures the technology is of the highest quality and ensures the second-hand vehicle will comply with relevant Australian safety standards, as in force at the time, which is currently an ANCAP five star rating. Secondly, my amendment stipulates that second-hand cars are imported into Australia. This ensures we are growing the pool of available EVs in the Australian market. Making a higher number of EVs available will significantly accelerate the uptake of EVs at a much faster rate than the government's proposed three- to four-year time frame. The reality is that the stock of low mileage second-hand EVs internationally is sizeable, and Australians are currently missing out. In Japan alone, there are up to 20,000 second-hand EVs available per annum and up to 150,000 vehicles from the UK. An increase in the supply of affordable second-hand vehicles could be immediate if this bill were extended to include the FBT exemption to imported second-hand cars. It would also increase the type, variety and quality of models available in Australia, increasing employer and employee and, ultimately, consumer choice.

For my electorate in North Sydney and many small businesses around the country struggling with increasing costs, the inclusion of second-hand EVs would allow employers and employees to make clean, green choices at a lower cost. By extending the FBT exemption to imported second-hand EVs, small-business owners, like my mother and my father, and many in my family and amongst my friendship and community group, will potentially equally benefit from more affordable EVs.

Moving forward, I commit to continuing to work with Minister Bowen to have input into the delivery of the government's national electric vehicle strategy to ensure the rollout of any EV strategy ensures equity for all. If we work together and get it right, something as seemingly simple as an EV policy can deliver on many fronts, from saving motorists money on fuel and car purchases to increasing the scope of consumer choice on EV models, reducing our reliance on imported foreign oil, improving health outcomes by reducing pollution and, importantly, reducing transport emissions.

5:19 pm

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

Deputy Speaker, before you have a heart attack: yes, I am supporting electric vehicles. People know that I've been a petrolhead all my life. I've been involved with cars and am very passionate about our motor cars. But if someone like me can sit there and look at the technology that we see today in motor vehicles—where places like EV West in the United States are taking Tesla type engines and fitting those to classic vehicles so that we can still enjoy our weekends, tow our boats and go for a cruise on a Saturday when it's a nice, sunny afternoon—then I think anyone can. That's the importance of really understanding what technology's about and what it leads to.

So I'm speaking in support of the Treasury Laws Amendment (Electric Car Discount) Bill 2022, a bill that exempts from FBT the use of eligible electric cars made available for employees. FBT is something that has been, I guess, a bit of a problem in trying to introduce electric vehicles and bring those into the country, but it's also been a bit of a barrier for people to be able to do it, because of the cost. So, through many organisations where you can salary-sacrifice and have the ability to purchase an electric vehicle, we should be taking every opportunity.

The one thing that we have to do in this place is to make sure that we leave the country in a better condition than it was in when we got here, and we do that by ensuring that we do things that lessen our impact on the climate, the environment and the future for our kids and grandkids. That's the most important thing we can do, and we do that by cutting pollution. Whether we are talking about carbon pricing or about anything else, the most important thing is that what it's about is cutting pollution and making sure that in the future our farmers can farm, our businesses can grow, we've got clean drinking water and we've got the opportunity to have cleaner air that's just going to take away a whole heap of medical things—hay fever and the like.

So it's important that we do that, and it's important that we have a government that says, 'Right, we're going to get on with this and develop the technologies and give people the support to be able to use electric vehicles and make them affordable so that families can have them,' because this is one of the biggest costs in areas like the one that I have the honour of representing, the seat of McEwen. We don't have a great range of public transport in outer suburban rural areas. We have a couple of train lines and a few buses, but that's about it. So we rely heavily on motor vehicles to get to work or to travel across the 30 towns to sporting grounds, to dance classes, to community events or to RSLs. Wherever we go, the motor vehicle is very much key to what we're doing. In fact, we have one of the highest numbers of cars per household in all of the nation. With the expansion of our communities, that's created more issues on our roads. It's created issues that have been neglected for the last 10 years by the previous federal government. Every promise they made on roads they failed to deliver. With more cars on the road and more people moving, it creates more congestion.

When we look at what the government is doing in relation to electric vehicles, the removal of the FBT means that people will have the opportunity to purchase a vehicle at a more affordable price. With fuel hovering around $2 a litre for 91 to 95 ULP, that puts a massive impost on households. I think the ability to have an electric vehicle and charge it at home—which means that you have a vehicle that costs less to run and pollutes a hell of a lot less—is a very positive thing, and we should be doing everything we can to support this. We should be embracing this technology, and we should be embracing the opportunities that it brings.

It really pains me to think that at the moment we have an opposition bereft of policy that's sitting in the Senate deciding on whether or not they're actually going to support the concept of making motor vehicles cheaper. We know they have a problem with motor vehicles. They shut the automotive industry out. They haven't seen a car manufacturer they haven't wanted to kick out of the country, and they successfully did that. But now we have this issue we've faced through the pandemic with global supply chains.

An opposition member: You said that with a smile.

Well, it's an absolute truth: the entire automotive industry and the thousands upon thousands of jobs that went with it were removed because the former government tried to be big and brave and macho. We all remember the former member for Spence's magnificent speech where he said that Joseph Benedict Chifley introduced the first Australian motor vehicle to this country, and Joseph Benedict Hockey made sure the last one was produced in this country, and they all went offshore. I think those words should always be available to remind us and those opposite of the massive impact they had on manufacturing.

We're now in a situation where all motor vehicles are imported. Fringe benefits tax and the cost of importing make it dearer and harder for families to get motor vehicles. This FBT exemption forms part of our government's electric car discount, which also removes the import duties on electric and low-emission vehicles. That's a very big, important point in what our government is saying. We're looking for electric and low-emission vehicles. No longer should we be the dumping ground for leftover vehicles manufactured outside this country. We should be ahead. We should be in front of the game. We've had 10 years where this market has slowly been growing internationally, and the former government sat stagnant on it.

Right across this country, I've met with companies like NHP, who put the infrastructure in place. One of the big barriers for people is actually having the charging points, the infrastructure, available to move. Also there is the growing fear that we have with our service station industries about what's going to happen in the future. I think of AA Holdings, who develop and run BP service stations on the Hume Highway. They're already ahead of the game. They're already sitting there thinking, 'We need to change our business model to suit electric vehicles.' That means charging stations that you don't just drive nose into or reverse into. That's very difficult if you're towing a caravan or a boat. Also, there need to be more and more charging stations in place to maximise the opportunity for people that need to stop. Charging a vehicle doesn't take eight minutes like it does to fill your car and get out of there. It takes a bit longer. They want to be able to develop their sites so that, when customers come in and charge their vehicles, they've got something to do rather than just sit at Macca's for half an hour, get a burger and then scoot off.

It is important to listen to the voices of the people who are in the industry, people have actually put their cash into it—small businesses that are growing and that employ people right across our regions. You'd think that the so-called party of small business would be listening to them, but they're not. They're failing. That's why we're working closely with the Victorian government to work with these visionary businesses to bring these developments to reality, support electric vehicles and bring more jobs into our communities. It's just so important that we do that.

We do that because our government, the Victorian government, the business community and the workers are all working together to say: 'These are the opportunities we have. This is where we're moving, going forward. Let's work together, embrace the technologies and build on that so that we build a cleaner, greener future.' If companies can develop electric vehicle engines to fit in 1957 Chevs, then I think the opposition have a duty of care to support the price reduction of electric vehicles and the removal of FBT to make them cheaper and more affordable for people to get. It's so important that we do this now, for the future, so that our future generations get every opportunity they can and the opportunity to have a better future, because that's the key in what we're supposed to be doing in this place.

Look at what we're doing with electric vehicles as part of the whole Powering Australia plan. We have set the targets. We've got to deliver the emissions targets of 43 per cent by 2030 and net zero by 2050. We've put this in place because we want to be able to say, 'Let's measure what's going on, where we're going and how we're going to achieve it.' We're not going to do it by keeping on flitting around. We've had 10 years of the climate wars. We've had 10 years of energy policy that's been all over the shop. It's time that we face what we're doing and head forward, and the only way that we do that is with a government that listens.

I think that's the breath of fresh air that people have seen with the election of the Albanese Labor government. It's a government that's actually on their side, a government that's going to work with them together to create a better Australia, not sit there where with every single measure we look at—whether it's education, health or communications—we've been falling down the rankings. This is actually a government that wants to go forward. We actually think that being at the forefront of emerging technologies and development is so important for our future, and it's something that the opposition needs to get on board with.

So I fully support what we're doing here. I think it's a great step on the path to a better Australia and a great step on the path to a cleaner Australia. Working together with governments, businesses, and individuals makes a real difference to our environment. So supporting initiatives like these is so important. With that, I commend this bill to the House.

5:30 pm

Henry Pike (Bowman, Liberal National Party) Share this | | Hansard source

The Treasury Laws Amendment (Electric Car Discount) Bill 2022 seeks to amend the Fringe Benefits Tax Assessment Act 1986, to exempt from fringe benefits tax cars that are zero or low emissions held by the provider and used by, or made available for the private use of, employees. It is a classic Labor government market intervention cheered on by rent seekers who hope to get a free ride on the backs of other taxpayers. I support the greater rollout of electric vehicles in Australia, but this bill is a very clumsy attempt to get there and, as such, I won't be supporting it.

Firstly, a bit of background: the previous government's Future Fuels and Vehicle Strategy detailed a technologies-led approach to reducing transport emissions while ensuring that Australians can drive their preferred type of vehicle. We didn't seek to pick winners in the market. Three principles underpinned the former government's policy: firstly, partnering with the private sector to support uptake and stimulate co-investment in future fuels; secondly, focusing on reducing barriers to the rollout of future fuel technologies; and, thirdly, expanding consumer choice by enabling informed choices and minimising costs of integration into the grid. In government, the Liberals and Nationals committed $2.1 billion to help increase the uptake of low- and zero-emission vehicle technologies. This included about $250 million to ARENA to roll out fast charging stations across the country. Round 1 of the program resulted in a sevenfold increase in fast chargers in our cities and regions.

Listening to some of the speakers this afternoon, it would appear as if there are no electric vehicles operating in Australia, but that's far from the case. Off the back of this investment we've seen very good results. We've seen the sales of plug-in electric vehicles triple from 7,000 in 2020 to more than 20,000 in 2021. The coalition's approach was estimated to create the environment for 1.7 million electric vehicles to be rolled out by 2030. The electric vehicle market is strong and it is growing. In my maiden speech on Monday, I spoke to the need for governments to only intervene where there is a need to. There is absolutely no demonstrated need for this legislation.

This legislation throws up many different questions. Firstly, how much will it cost? The government's explanatory memorandum says that it will cost $205 million over the forward estimates, but the Parliamentary Budget Office's post-election review contains a medium-term projection of $2.3 billion over the decade, with a per annum cost culminating in $639 million by 2032-33. That is a huge economic opportunity cost for government, and this bill is not fiscally responsible.

What will the market impact be? I note that EV demand skyrocketed under the previous government, as I mentioned, almost tripling between 2020 and 2021. It did not take either an elaborate market intervention or endless buckets of public money to achieve that. Supply of EVs is already increasing in line with natural market forces. EVs currently maintain their largest ever market share, and multiple major car companies, including Mazda and Nissan, have committed to becoming fully electric within the next decade. The latest figures from the Federal Chamber of Automotive Industries, who were in the building yesterday, show sales of pure battery EVs last month represented the highest market share ever recorded. This bill won't make a difference to the trajectory of this growing industry.

Another question this raises is: will this lower costs? The Institute of Public Accountants say it won't. Their evidence on this bill says:

Private buyers and sole traders of EV's cannot access these significant savings … The Governments assertion that this initiative makes the take up of EV's more affordable is misleading …

There was further evidence to say that this bill:

… will deliver the subsidy to a rather narrow class of employee beneficiaries and provides the largest benefit to the highest income earners.

The next question I have is: what will be the environmental impact? The evidence of the Treasury and the Department of Climate Change, Energy, the Environment and Water failed to quantify what the emissions reduction impact of this bill would be. The Institute of Public Accountants stated the policy will have negligible impact on reducing carbon emissions from the transport sector—a negligible impact. That's $2.3 billion over the decade for a negligible outcome. So it begs the question: what will be the economic impact? The bill will attempt to artificially stimulate demand in what is already a growing market, and even the most rudimentary understanding of supply and demand will tell you that this bill will only add to inflationary pressures that are already being felt across the country. A number of experts have raised serious questions about the equity, fiscal sustainability and price pressures on the EV market that this bill will bring about. This bill certainly poses more questions than it does answers.

I note the comments from the previous speakers, the teal Independents who've already spoken before me, applauding and welcoming this bill, and outlining their support for this bill—with a few caveats, I note. It's alright for them to support this bill, it's alright for big companies employing executives in their electorates who will benefit from this bill, but it does little for the workers in my electorate and their infrastructure needs. It does nothing for everyday working Australians. No matter which way you slice it or dice it, this bill benefits the well-off and places a disproportionate financial burden on the already strained backs of everyday Australians. This bill is robbing Peter to pay Paul. It is robbing Port Pirie to pay Point Piper—and I challenge any member to say that three times fast.

The government has also drafted the bill at an almost frantic pace, without considering its specifics or broader impacts. I've touched on some of the submissions that have been received and some of the commentary from third-party groups. Labor cannot say, let alone confidently predict, what impact this bill will have on carbon emissions, on the EV market and on localised electricity infrastructure—or even outline a way of measuring its success or even make a prediction on the long-term financial implications beyond the forward estimates.

If this Labor government is serious about helping to facilitate a sustainable and affordable uptake of EVs in this country, then it should take a leaf out of the coalition's book and make targeted investment in critical EV-friendly infrastructure, instead of being seduced by the siren song of direct intervention and market manipulation in this industry. I would like to see the federal government instead turn their focus to delivering real cost-of-living relief to everyday Australians, and perhaps they can start with honouring their pre-election commitment of an energy price reduction.

This is a high-cost, low-impact bill, thrown together on the fly without sufficient consultation, and which threatens to divert piles of public money in complete disregard of the cost-of-living pressures that continue to cause so much unnecessary pain under this Labor government. I encourage members to vote against the bill.

5:38 pm

Photo of Andrew LeighAndrew Leigh (Fenner, Australian Labor Party, Assistant Minister for Competition, Charities and Treasury) Share this | | Hansard source

It's no great surprise that the party that claimed that electric vehicles would end the weekend continues to be campaigning against this bill, the Treasury Laws Amendment (Electric Car Discount) Bill 2022—campaigning against a measure that would make electric vehicles cheaper. I switched to a Tesla Model 3 at the start of the year, and it is an absolute joy to drive. It is an extraordinary piece of technology. It's very quiet, environmentally sound and it does things that I've never before thought would just be natural for a car. You approach it and it unlocks, because your phone is in your pocket. It gets dark and the lights come on automatically. It rains and the windscreen wipers come on automatically. As an EV user I'm not unusual in driving a Tesla Model 3—according to the Electric Vehicle Council, they accounted for 60 per cent of all EV sales last year, followed by the MG ZS EV and the Mitsubishi Outlander PHEV.

Teslas are terrific fun but they're too expensive right now, and this bill seeks to address the challenge of affordability. It is extraordinary, when we have a cost-of-living challenge like we do in Australia right now, that the coalition would be arguing against a measure which makes electric vehicles cheaper. At last count, consumers in the United Kingdom could choose from 26 low-emission vehicles under $60,000. In Australia, that number is only eight. The global average of EV uptake is five times higher than Australia's level of two per cent. Today, the ACT is outperforming the national average, with five per cent of new vehicle sales electric. But as we move to ensure that Australia has sufficient uptake of electric vehicles to curb carbon emissions and to reduce the cost of living, it's important that we make electric vehicles cheaper. We know that the running costs are significantly lower. A petrol car working at an average of 11 litres per 100 kilometres, costs $14. The average electric car costs $4 per 100 kilometres. Right there, for every 100 kilometres that the typical household drives they will save $10 by driving an electric vehicle instead of a petrol car. We need to also ensure there are more fast chargers available, and that is why the government is committed to working with states and territories to expand the network of fast-charging stations.

This measure is about making an orderly and systematic transition away from petrol and diesel cars and towards electric vehicles. Apart from Russia, Australia is the only OECD country not to have or be in the process of developing fuel efficiency standards. That's why the Minister for Infrastructure and the Minister for Climate Change and Energy are developing a National Electric Vehicle Strategy which will explore options about how an Australian fuel efficiency standard would work, and will work with states and territories to reduce household costs from bringing electric vehicles in. We've committed to our Driving the Nation plan, which will establish a national EV charging network, with charging stations at an average interval of every 150 kilometres on major roads. We have committed to creating a national hydrogen highways refuelling network and set a low-emissions target for the Commonwealth fleet of 75 per cent of new leases and purchases by 2025.

I imagine that, looking a decade forward, the car parks in this building will be filled with electric vehicles. We in this building will probably need more spots to plug in electric vehicles. Right now, down in the parliamentary car park, my Tesla is plugged in to the wall, happily charging away, and it will be at 100 per cent by the time I drive home at the end of today. There are only a couple of power points in the wall there, and I expect this building—like many other buildings around Australia—will be updating and providing more charging stations. The simplicity of electric vehicles is that you don't have to worry about stopping at the petrol browser, but it's also an important cost of living measure for Australians.

It is striking that the coalition, having seen a swathe of its formerly safe seats taken by teal Independents, voted in the last parliament against Labor's measure to put in place a 43 per cent emissions reduction target. They now have a spokesperson who claims that there is no electric ute, despite clear evidence to the contrary, with carmakers such as General Motors developing exactly such a product. In the United States there is huge excitement over the Ford Lightning—a vehicle which is zippier than the Ford F-150 but which also acts as a resource for tradespeople. One of the key selling points of the Ford Lightning is that tradespeople can use it as a mobile battery. They can plug their tools into the Ford Lightning and ensure that they're able to work on the job. As we work to allow electric vehicles to feed back into the grid, they'll help to improve the sustainability of the grid by providing a whole set of mobile batteries that can be drawn on at times of high demand. That will be a part of the steady move towards having more batteries in households and having more community batteries, as Labor has committed to. Community batteries are rolling out in the ACT, including in Casey, in my own electorate.

Labor understands that dealing with climate change will require significant electrification. To look at books such as Bill Gates's How to Avoid a Climate Disaster is to realise the benefits of widespread electrification, as we deal with climate change. But we don't have to choose between cost of living and dealing with climate change. We don't have to choose between jobs and dealing with climate change. We don't have to choose between a car that's fun to drive and dealing with climate change. With electric vehicles you can have all of those things. These are vehicles which are a lot more fun to drive. My boys have never before campaigned so strongly for dad to drive them to school than since our household got an electric vehicle. They are also quieter, more energy efficient and cheaper. It's absolutely vital that we ensure that more Australians can get access to electric vehicles, and that we work with organisations such as the Electric Vehicle Council to expand the number of models that are available. In 2021, electric vehicle sales in Australia were just over 20,000. That's triple the level that they were in 2020. So Australians are keen to get hold of electric vehicles, but they don't have enough choices, and they don't have vehicles which are as affordable as they should be. By working with the electric vehicle manufacturers and ensuring that we remove these additional imposts, we're able to expand the uptake of electric vehicles.

I commend the hard work that the minister has done on developing this policy, and I just note to the House that the absurdity of the coalition's position will become clearer and clearer as the years go by. They will be in the annals of history as the party that claimed electric vehicles would end the weekend. The Liberals will be in the annals of history as the party that voted against a measure to make electric vehicles more affordable. The Liberals are the 'useless box' of Australian politics. A useless box is a machine whose only purpose is to turn itself off, and that is the approach that the coalition takes. Probably the only time I will associate electrification with the coalition is to note their great similarity to a useless box: 'Turn it off, and don't worry about the new technology.' It is extraordinary that we have a party which claims to support a technology led approach to tackling climate change but which is opposing the widespread rollout of that technology to their very own constituents, opposing a measure that will deal with cost of living and opposing a measure which will help electrify our vehicle fleet and reduce Australia's carbon emissions.

I commend the bill to the House.

5:49 pm

Photo of Rowan RamseyRowan Ramsey (Grey, Liberal Party) Share this | | Hansard source

I thank the member for Fenner for his contribution, and I'm pleased that his boys like him taking them to school in his new car. Given that it was cheaper than another equivalent, I'd be interested to know what model you bought, Member for Fenner, but we'll put that to one side. But the world—not just Australia—is very interested in, and excited by, the oncoming wave of electric vehicles, and their adoption and use will increase. That is a given. But I have to say that I do have doubts about the short-term penetration into the market in my seat of Grey, which covers 92 per cent of South Australia. It starts 30 kilometres out of Adelaide and continues to all of the borders except Victoria's.

One would expect me to bring up the issues of regional difference and possible regional disadvantage that any new government policy might include. I know I am not a typical example but, in my role as the member for Grey, I drive somewhere between 80,000 and 90,000 kilometres a year. Sometimes I drive over 1,000 kilometres a day and, quite frankly, I don't have the time to stop and charge up electric batteries, and I also need access to very fast charging. If it is to come up to anything like a comparison to filling up the car with fuel, I think we have a long way to go with these technologies.

I realise, as I said right from the start, that I am not typical—in fact, I am atypical; or special, as my friend says—but I do know plenty of people who drive 40,000 or 50,000 kilometres per year, living in the country. It is quite true that their cars double up and they use them to take the kids to school or to go and do the grocery shopping or whatever. But, when you live 200, 400, 700 or 1,000 kilometres from your capital city—and, in South Australia, we only have one truly major city and that is the capital city, with the next biggest municipality in South Australia around the 25,000 mark—many of us are drawn to Adelaide on quite a regular basis for good reason. So that car that also has to take the kids to school and do the drop-offs and pick-ups for sports training and all those things also has to be quite capable of getting to Adelaide as quickly as is safely possible, with a minimum amount of fuss. And, if you take the time to drive down the street of any country town, you will find that most of the cars that people are accessing are generally large four-wheel drives, normally powered by diesel motors. That is why I say it is likely that adoption will be slower in country regions. I'm not saying it won't be done, but I think the technology will have to evolve somewhat further before we get to that point.

The reason I've raised that is that, while I can understand why governments will want to subsidise certain things to excel a great technology take-up—and I have a good simile that I will come to later—I think the method that the government has chosen in this area of reducing the fringe benefits tax on electrical vehicles is curious, to say the least. It seems one of the least appropriate ways to do it, in my opinion. Insomuch as the government is calling this an electric car discount, it's not. It's not an electric car discount at all; it is a reduction of a selective tax, a fringe benefits tax, applied to higher-income salary earners as opposed to wage earners.

I can tell you that there are not many retail workers, cleaners, nurses or bricklayers—and I could go on and on—who get a car as part of their remuneration package. The people who get a car—and consequently the companies and governments employing them that get a car—as part of their package are salary earners generally in the area of, say, $80,000 plus a year. They and those companies are the ones that choose to pay the fringe benefits tax to include the car as part of their package. Consequently, this taxation deduction—which is what I shall call it, as opposed to an electric car discount—by definition, benefits the higher-paid salary workers and larger businesses.

I can't quantify what the long-term cost of this policy is another, and neither it seems can the government. We have a number for the forward estimates, but we don't actually understand—we have some estimates from others—how much it will cost the taxpayer in the longer term that will go to these higher income earners, not to lower income earners. And we don't understand how much it is likely to reduce CO2 emissions. If we introduce a policy like this that costs a substantial about money, knowing the numbers, outcomes and estimates are very important.

There is a similarity here that I said I would bring up. It's not exactly the same, but there is no doubt that the policy surrounding rooftop solar in Australia is incredibly popular. Australians are in love with rooftop solar. We have the highest rates of uptake in the world. I would not for one moment say that the subsidies involved are a small part of that. They've been a large part of that accelerated uptake. Interestingly, in this area, the subsidy is provided through the SRET, the small renewable energy target, which then generates small-scale technology certificates, or STCs, which go to the installer of the equipment and reduces the price. They will degenerate in time through to 2030, which is the final target for the closure dates on the SRET.

The problem I've always had with the program is not the fact that it is a subsidy for rooftop solar; it is the fact that it is a subsidy for rooftop solar that actually takes from the poorest people—because it's not a government subsidy; this is a consumer subsidy—in our communities and gives it to the richest people. The only people that can afford to put rooftop solar on their houses in the first place are the people in the higher income bracket. Those who don't own their houses, who are in rentals, who are in houses they're struggling to pay off, are the people who cannot afford rooftop solar. In a way, it's even worse than this selected discount, if you like, or abolition of the fringe benefits tax on electric vehicles, because it's actually coming out of the pockets of the poorest people in our communities and going into the pockets of the richest.

That's always been my objection to the rooftop solar scheme. I don't blame people for taking it up—good on them. If governments are to put these things in place, it is naturally accepted that you should take advantage of them. And I encourage people to take up the subsidies on rooftop solar and put them in. I've just never been happy with the way those subsidies are obtained. The paid parenting scheme is a very good example of where we choose not to take from the employer for public benefit. In this case, we needed a public benefit. We wanted the solar cells on roofs; it should not have come from the individuals who can't afford solar cells. It's not quite the same, but it is the same when it comes to this fringe benefits tax. It is a tax break for the rich and a bigger slug for the poor. That's why it is wrongly founded. It is flawed in its concept.

I would have suggested that it would have been far better for the government to suggest that, if they're willing to put this amount of money into subsidising electric vehicles, why not knock it off the price of everybody so that a self-employed person can access in the same way as somebody employed by a larger company can get it through their wages package. It just doesn't make sense to me. I don't know why the government has chosen to go down that path.

That rounds up my directed objections to the legislation as it stands, but I have a couple of associated issues. I'll lay them on the table because there'll be ample time for discussion about this in the coming years in this place. One of the things I flagged in my electorate and in a couple of speeches in these chambers already is that I think it's time for governments to start giving serious consideration to fuel excise as a tax. There are people who will argue that fuel excise is not hypothecated for road construction and maintenance. I would argue differently. If you look at the origins of the tax, you'll see that it actually came in as a road user charge. In fact, miners, farmers, diesel electricity generators and trains do not pay this excise. What do they all have in common? They don't use the road. So, essentially, the only people who pay fuel excise are those who are actually using the fuel on the roads. I would say that's a road user charge.

As the number of electric vehicles builds up, those receipts for excise will fall away, and I don't think it is fair or right or proper that we continue with the same system. I'm not saying that it's broken yet or that the government needs to act on this as if it were an emergency, but the government should exercise itself in thinking about what the replacement tax is going to be. The sooner we get going on it and make a move on it the better because, for people who will be buying electric cars over the next few years, it will come as a large shock to them a few years down the track when they suddenly have to start paying a road user fee, because something they would have factored into the decision to purchase is that they aren't going to be paying fuel tax anymore. So I think it's important we address this sooner rather than later.

There is another issue that I want to bring up. I don't know what the answer to it is, and I don't know what we should do about it, but I checked this out before I came up to the chamber. You can buy, let's say, a 2006 Corolla that has done 200,000 kilometres for about $8,000. That is the entry level for students. It's the entry level for people in the workforce that live, perhaps, with mum and dad or who are going out into a flat for the first time. It's the kind of car that people will buy for a second car in the family, so that one of the parents can ferry kids to and from school. That's fine. That's a good thing. But, if we now transpose ourselves 10 or 15 years down the track, those vehicles will be gone and the cars that will be coming into the second-hand market, on my assumption, will be worthless because the batteries will be worn out.

So, if we've got a similar car that has done a couple of hundred thousand kilometres and it needs a $10,000 or $15,000 battery refit, that person is not going to buy that car because it will be simply unaffordable. I don't have a solution for that. I'm not saying that we shouldn't have electric cars just because kids starting uni won't be able to buy a car 15 years down the track, but I do think we have to get our heads around where we are going to source vehicles from and how we find cars that are cheap enough for those kinds of people to get into the entry market. There's an indication that, despite what the member for Fenner told us a little while ago, electric vehicles aren't cheap. They're generally a bit dearer than the others, and, if internal combustion vehicles are phased out as quickly as others suggest, then we'll be facing the wall very quickly.

The other issue I would touch on briefly, which the member for Fenner also mentioned, is the talk about Ford developing an electric tradies vehicle, if you like. My understanding is that, in Australia at the moment—let's be careful what we say here—there is nothing available in that sort of workman's electric vehicle category that is right-hand drive. As is the way with the world, right-hand drive vehicles are in the minority. We're probably pretty lucky that the Japanese drive on the left-hand side of the road, but we may find that sourcing new EVs in Australia with specific qualities to suit certain markets is going to be pretty slow and a hard slog.

Generally speaking, I support electric vehicles. Bring it on; I don't mind that. But I do think the government has chosen the wrong mechanism to accelerate uptake in this case.

6:04 pm

Photo of Peter KhalilPeter Khalil (Wills, Australian Labor Party) Share this | | Hansard source

Real action on climate change—that's what the Albanese Labor government's all about. It is committed to delivering this by reducing taxes on electric vehicles. The Treasury Laws Amendment (Electric Car Discount) Bill 2022 is the first step in achieving this, by providing a fringe benefits tax exemption for eligible employer provided electric vehicles. Put simply, what this means is that, when an employer allows an electric vehicle to be used privately by an employee, it will no longer attract a fringe benefits tax. This will incentivise greater uptake of electric vehicles, which are rapidly becoming a more efficient and cheaper form of transport; it will reduce transport emissions, contributing to the government's plan to reach net zero by 2050; and it will make electric cars more affordable for families and businesses across Australia who are currently locked out of the market due to very high costs.

This is really important as a reform for people and businesses across my electorate of Wills in the northern suburbs of Melbourne. My community, like many across Australia, are acutely aware of the existential threat posed by climate change. Every day, in many ways, they make decisions to reduce their own carbon footprint, whether that be through where they shop or source materials, how they power their homes or shops, or just how they travel from A to B. This tax exemption for electric vehicles will provide more sustainable options for so many more Australians, because as a government we know that Australians not only deserve choice but want it. They need it.

We've heard a whole lot of nonsense from the opposition, who seem to be living in the past—years in the past. Let me just run through a few examples. Scott Morrison, when he was Prime Minister, said electric vehicles would end the weekend. Remember that? They would end the weekend; it would be gone. He then pretended at the last election that he had said nothing like that, so suddenly he forgot that he had actually said that. He must have forgotten that video clips existed even in 2019 and that you will be recorded when you say something. He said:

It's not going to tow your trailer. It's not going to tow your boat. It's not going to get you out to your favourite camping spot …

Just two weeks ago, the new Deputy Leader of the Opposition, in a sign that things really haven't changed that much with the Liberal Party, said that no-one in the world is making an electric ute—no company. Well, it took fact checkers all of five seconds to determine that was wrong. She must have forgotten that Google exists in 2022. For the benefit of the deputy opposition leader, there are not just one, two or three but at least five electric utes being manufactured and sold overseas. That's a fact. Then, when she was faced with this unavoidable fact, she said:

… even if they were it would be unaffordable.

Well, let's be glad that the other side are no longer in power with that kind of misinformation and positioning.

Rather than just spreading misinformation and complaining, we are really taking action on climate change. This is what this government is about. With this bill, we will make it more affordable for Australian employers and workers to drive an electric vehicle if they choose to. In fact, a number of experts have said that people using electric utes for work gain added benefits. For example, the electric utes can be used as generators on worksites, charging up electrical tools. So, if you're on the job, your electric ute actually helps you do your job. You can also use an electric vehicle to charge a laptop, so it's not just the tools. If you want to put in an invoice, you can do that as well. There you go—just another example of why businesses might utilise them in high numbers if they were made affordable.

My question to the opposition is: why not give businesses and Australians the choice when it comes to choosing the vehicle they drive? For the so-called party of personal choice and responsibility, the Liberal Party are sure committed to making it harder for Australians to make their own choice when it comes to the car they drive.

The Albanese government, however, is committed to giving Australians greater choice by bringing down the costs of electric vehicle ownership. This exemption will apply to electric vehicles below the luxury car threshold—including battery, hydrogen fuel cell and plug-in hybrid electric cars—that are made available for use after 1 July 2022. In addition to this, the Albanese Labor government will remove import duties on electric and low-emission cars. These fees have been a significant—in fact, tremendous—barrier to the uptake of electric vehicles in Australia. This barrier has meant that just 1.5 per cent of cars sold here are electric or plug-in hybrid vehicles, compared to 17 per cent in the United Kingdom and—wait for it—85 per cent in Norway.

This not only represents a loss of opportunity in emissions reductions and lowering household costs around fuel; it also represents a lost opportunity in rebuilding Australia's automotive and manufacturing industries. That is an issue that is so important in my electorate of Wills, in the northern suburbs of Melbourne, where thousands of workers and their families were left out of a job, out of job security, out of a living, with the closure of the Broadmeadows Ford factory and associated factories that fed into the automotive industry, including small and medium-sized engineering firms, innovative firms, that made little parts of the cars that were being made in Australia. Some of you over there—some of the new MPs—might not remember this, but there was a Liberal Treasurer who dared the car companies to leave Australia. In fact, they basically shoved them out the door by removing support for the industry; yet the Liberal Party—

Opposition Members:

Opposition members interjecting

Photo of Peter KhalilPeter Khalil (Wills, Australian Labor Party) Share this | | Hansard source

That is a fact. That happened. I will take the interjection. The Treasurer at the time, Joe Hockey, dared them and pushed them out of the country and removed that support. Yet the Liberal Party continue to be the biggest opponents of Australian manufacturing. It is remarkable.

Unlike that lot, the Albanese government is getting to work and is committed to bring manufacturing back home by reducing taxes on electric vehicles. We will make them more affordable, encouraging their uptake and incentivising businesses to build them here in Australia. We will also establish a new driving the nation fund, invest in highways and build a national electrical vehicle network. This will include a $39.9 million investment to delivering 117 fast-charging stations on highways across Australia and up to 16 hydrogen refuelling stations on very busy freight routes between the capital cities, matching investments already made in states like Victoria.

All Australians are feeling the pressure at the petrol pump, particularly over the last few months with what we have seen happening overseas with the war in Ukraine and the invasion of Ukraine by Russia. We cannot afford as a government and as a nation to be short-sighted in our policy responses to the rising costs of living. That is how we have ended up in this situation—that short-sightedness by the previous government—after nine long, tortuous years of a Liberal government that had no vision, no plan, no foresight and nothing on offer. They kicked everything into the long grass. That was their tactic: I see nothing; I know nothing; I'm just going to kick it off into the long grade and hope somebody else takes care of it later. That is how we have ended up in this situation.

The Albanese Labor government will take the ambition action needed to provide cleaner and more affordable options as our technology options improve. We will not allow Australia to be left behind as the rest of the world realises and takes advantage of the opportunities of investing in renewable energies. The opportunity to create hundreds of thousands of jobs, to unleash billions in investment, to reduce those cost-of-living pressures and reduce household costs is before us now, and we are taking action to make it a reality. We will make electric vehicles more affordable, we will take real action on climate change and we will bring Australian manufacturing back home.

6:13 pm

Photo of Adam BandtAdam Bandt (Melbourne, Australian Greens) Share this | | Hansard source

We are in a climate crisis which requires the rapid shift to net zero emissions through the electrification of all the sectors of our society. With light vehicle transport alone responsible for 10 per cent of Australia's emissions, electrifying our transport system must be a high priority for this parliament and this government.

Listening to previous speakers, you might think that this bill, the Treasury Laws Amendment (Electric Car Discount) Bill 2022, was about to bring electric cars within reach of everyday people and see a massive investment. It is a step towards electrifying our transport fleet, but it primarily applies, in this bill, to people who salary package their cars or who are on forms of leases or for big corporations that are buying cars and using them for their staff. It is important that we tackle that. It is important that we take a step towards electrifying our transport fleet. But let's be clear. Despite the rhetoric from the previous speakers, there is still a long way to go to ensure that we fast-track the electric vehicle revolution here in this country. If we're serious about taking steps that would see the electrification of our transport fleet across this country, we need policies to push out old, dirty and obsolete vehicles; we need policies to bring in cleaner, better and more efficient electric vehicles; and we need the infrastructure to power-up Australia's new electric vehicles and our vehicle-manufacturing industry. Let's just go through those one by one.

The US, China, Japan, and Europe have had mandatory vehicle emission standards for decades—that is, standards about how much pollution your car can emit. We still do not have those in this country. It is clear what needs to be done. We don't need more reviews or consultations; we just need to get on with it. At the moment, Australia is already a dumping ground for dirty, expensive, inefficient vehicles, and it's only going to get worse. Without these standards, consumers will continue not to be offered the range of electric vehicles that are already available to most of the world. The fuel excise discount is about to end. We're in a cost-of-living crisis, with high fuel costs driven by our dependency on the rest of the world for fuel security. Surely there is no better time to be introducing pollution standards that will save people money. Surely it makes sense to depend on the sun, not the ongoing extraction of climate-destroying, planet-killing fossil fuels.

The Greens want to see fuel efficiency standards, or CO2 emissions standards, starting with 105 grams per kilometre and ratcheting down to zero by 2030, and a ban on new petrol and diesel vehicle sales by 2030, to bring us into line with leading countries like the United Kingdom as well. At the election, it was only the Greens pushing for these vehicle emissions standards, to stop us becoming the dumping ground for dirty cars that the rest of the world can't sell anywhere. Since the introduction of the bill, there have been steps towards the Greens' policy by the government, saying that they will look at fuel efficiency standards. We're going to keep pushing until Australia starts to align with the best practice in the rest of the world and we have fuel efficiency standards that will not only drive EV uptake here but stop us being the dumping ground for cars from the rest of the world that they can't sell anywhere else.

People have got to understand the significance of what happens if we don't have these fuel efficiency standards. If everyone else around the world has them—if everywhere else they've got policies in place that say your car can't be too polluting—and they've got electric vehicle targets, and Australia is one of the few places where those rules don't apply, then all of the dirty cars that are made everywhere else are going to be dumped here. Right now, with the cost of fuel dependent on coal, gas and oil rising because of international events like a war—when a dictator decides to invade another country, it has massive flow-through effects here—we're seeing the absolute craziness of continuing to rely on those forms of fossil fuels. Even worse, if we don't have fuel efficiency standards, the average Australian is going to be even more on the hook, because the cars that are going to be flooding the market here will be the ones that they can't sell in the rest of the world and that require you to spend even more money on petrol, because they won't be efficient. So that's why we need fuel efficiency standards. It is the way that we're going to start bringing down costs, including the cost of living, and also drive the uptake of EVs and make them more affordable here.

We also need proper electric vehicle subsidies, in combination with efficiency standards, to turbocharge both supply and demand. We've been pushing—we pushed during the election—to invest $1.2 billion to support manufacturers of electric vehicles and electric vehicle components in Australia, to build the Australian EV-manufacturing industry. The prospect of remaking manufacturing while simultaneously addressing the climate crisis is actually quite exhilarating. We've had so many opportunities here, many of which have slipped through our fingers because of the neglect of the previous government.

The previous speaker referred to the former Liberal government's decision to axe the Automotive Transformation Scheme, which saw jobs and industries disappear in the blink of an eye. What they don't realise and didn't seem to realise at the time is that it wasn't just the makers of the cars, the big names that everyone knows because you see the brand name emblazoned on the car. It was so many of the smaller manufacturers and component manufacturers underneath them, in places like South Australia and in my home state of Victoria, that were there producing, manufacturing, employing people and ready to switch over to electric vehicles. It was this massive opportunity that we had here in this country.

During the term of the former Liberal government, as they were talking about the future of the transformation scheme, I met with people and companies who were prepared to make electric vehicles here, including utes and four-wheel drives, and they were just saying to the government, 'Can we get a bit of support—a fraction of the support that's been given to the coal and gas industries, and a fraction of the support that's been given to petrol cars—and we can start taking our component manufacturers that we've got here, and integrating them into supply chains and making EVs here?' The former government said no.

We now find ourselves a fair way behind, when we could have used the last five years to integrate existing component manufacturers—which are in many places around Australia but especially in South Australia and Victoria—into making EVs here. We would have avoided massive dislocation and we would be producing the products that now Australians want to buy and the rest of the world wants to buy. And that's why an investment to support manufacturers of EVs and EV components in Australia is absolutely critical. It's not in this bill, though. It's not in this bill, so let's be clear-eyed about the small step this bill is taking. But that's what we need to do.

We also think that the requirement to put charging stations into new road infrastructure, which a previous speaker mentioned, is good, but we're going to need a much more intensive and extensive network of charging stations than the small allocation of funds that was referred to, $30 million odd, is going to support. Think about where there are petrol stations and how many petrol stations there are across the country, and the infrastructure that exists to support internal combustion engine cars. We're going to need a version of that to support electric vehicles, and not just private cars. Trucks, freight—we can move freight around using electric vehicles, but we're going need the infrastructure to support that.

We want to see $2 billion invested in a publicly owned EV fast-charging network. That is the kind of thing that would give people confidence—which they can have at the moment, in many instances, because when you investigate it you understand that the range anxiety that exists with respect to EVs is actually overcome with existing technologies. But build that charging infrastructure and make it publicly available and visible, and the uptake will happen much, much more quickly, because people will know they can charge their car wherever they go. It's something that the government should invest in because it's building a common network that then everyone can benefit from. As I say, time is running out to tackle the climate crisis, and government has to take the reins. Government stepping in and building the backbone, the network that everyone then knows they can plug into and be part of, is going to fast-track the uptake of EVs.

It's also time to look at redirecting the massive subsidies that currently go to coal and gas in this country. Close to $12 billion a year, between various levels of government, is spent subsidising fossil fuels in this country. Instead, we need to look at saying, 'You've had your day. Many of you are big, tax-dodging corporations anyway; you don't need public handouts.'

Let's stop the subsidies to fossil fuels, and let's instead work out how we can make EVs within financial reach of everyday people in this country. We need subsidies for people to get their first EV. A $10,000 subsidy on every first electric vehicle could be put in place and could be funded in this upcoming budget—not by asking everyday people to pay more but by stopping giving coal and gas corporations the handouts that they are getting, and perhaps even by not giving billionaires like Clive Palmer a $9,000-a-year tax cut with the stage 3 tax cuts. The money is there. Instead of giving Clive Palmer a tax cut, let's make it easier for the average Australian to go and buy their first electric vehicle, a $10,000 subsidy on every first electric vehicle. What you would do is decrease that over time as the uptake of electric vehicles across the country increased.

You could also—and we will be pushing for this—have the government provide low-cost finance to remove the cost barriers to consumers and ensure equity. Now, these measures aren't controversial in the rest of the world. Subsidies to help people get their first EV exist elsewhere. Subsidies would put Australia in line with leading countries like the United States, who are extending out to 2032 a $7½ thousand subsidy for new electric vehicles.

This package of policies that I've just outlined, implemented together—so, much more than this small step being taken by the bill, which, as I say, is primarily aimed not at everyday buyers of electric cars but at larger fleets and at people who salary-package—would mean there's no reason that Australia can't rapidly accelerate towards an electric vehicle take-off, just as other countries have done. And when people say, 'Well, where's the money coming from,' I repeat the point: all of this that I've just outlined that would fast-track the electric vehicle revolution in Australia would cost just a fraction of the over $200 billion that the government is spending on stage 3 tax cuts to give the likes of Clive Palmer a $9,000-a-year handout. Don't give Clive Palmer a $9,000-a-year handout that he doesn't need. Instead, give everyday people a subsidy to go and buy their first electric vehicle. That is a better use of public money.

The Greens will push in this parliament to see the government take the ambitious action that's needed. We know it's affordable, and, with Australia's transport sector and light vehicles accounting for about10 per cent of our pollution here, it's something we've got to do if we want to tackle the climate crisis in the time available to us.

6:27 pm

Photo of Patrick GormanPatrick Gorman (Perth, Australian Labor Party, Assistant Minister to the Prime Minister) Share this | | Hansard source

I will never forget my first time in the front seat of an electric car. It was love at first drive—accelerating at 100 kilometres an hour down the Mitchell Freeway in my first drive in an electric vehicle. I had decided that it was time for me to take that jump and get rid of the much-loved Mazda CX5 that had done so well for me and the family, and shift to an electric vehicle. And in doing so I had one key criterion, which was that the electric car we would get had to fit the double pram that Leo and Ruby relied upon day to day to get around with me and Jess. As I took my double pram down to the car yard, I folded it all up and I crossed my fingers that that pram would fit in the car. And indeed it did.

Two days ago I celebrated one year as the owner and driver of an electric vehicle—9,436 kilometres later. That vehicle has gotten me everywhere on every day of the year, be it a weekend, a Monday, a Tuesday. These cars are the future. My electric vehicle came with me when I visited Maurice Zeffert Home last week, where I celebrated Dora Caverson's 108th birthday. She's someone who has seen so much technological change in her lifetime, and there's so much more to come in the many exciting years ahead for Dora. It's taken me to the Bassendean Men's Shed, where members of my community work tinkering with old electronics and building things. It's not exclusively a men's shed, despite the name. Again, they're people who've seen that huge technological shift in our cars, in our radios, in everything. They're embracing that change. It's driven me to places like Miller and Baker, a fabulous bakery in my electorate. It's taken me to the Australian Vanadium workshops, which are also looking at new battery technologies to ensure that we can meet the climate challenges ahead of us. It took me to the press conference that allowed me to talk about not just the future but the ancient history in this land, announcing with Premier Mark McGowan the Aboriginal cultural centre that we will build at Terrace Road car park in the centre of the Perth CBD. It took me to the announcement with the Prime Minister, where we announced that Bayswater and Dianella would be beneficiaries of community batteries, allowing people to store the energy they are producing on their roofs to charge their electric vehicles or to provide stability in the grid.

I come to this knowing that this is a complex debate for the people who work in the automotive industry. I was at the Motor Trade Association's awards night at the Crown Casino a couple of weeks ago. I spoke with them and their CEO, Stephen Moir, about what this transition means for people who've had investments for decades in the motor vehicle industry. I spoke to young apprentices who are learning about all of the technology that they will need to service the cars of the future. There was an opportunity to talk about how we make sure that we get the policy settings right, not just for new cars but for families who wish to hang on to a vehicle for many years to come. But we can't escape one very clear fact: Australia trails the world when it comes to electric vehicle uptake. This isn't the fault of Australians. Australians want to do their bit. From surveys, we see that 54 per cent of Australians are open to buying an electric vehicle as their next car. The problem is that our current policy settings make these vehicles too expensive for everyday Australians.

There are no electric vehicles under $40,000 available in Australia, and only eight models available under $60,000. The parliament can change the policy settings to make these things more accessible and more available. The reality is that less than two per cent of vehicles sold in Australia are electric or plug-in hybrids. We know that not only does that have to change, but it will change. We know that the transition to electric vehicles is essential to meet our commitments. I'm looking forward to it becoming the law of Australia when it passes through the Senate so that we can reach net zero by 2050.

Over the last two years, we saw the now opposition go through a process of changing all of their economic settings when they were in government. They used to complain in opposition about debt. They were very happy to pile on the bulk of that debt before the pandemic hit. They campaigned against debt. They embraced debt. I also remember when I used to campaign against taxes and say that they wanted to have lower taxes. This legislation is about getting lower taxes for families who want to choose an electric vehicle. But the party of choice has chosen to rip away choice. The party of taxes has chosen to keep a high tax on electric vehicles for purely ideological reasons. This bill will remove the fringe benefits tax for battery electric cars, the fringe benefits tax for hydrogen fuel cell electric cars and the fringe benefits tax for plug-in hybrid electric cars. This will build that second-hand market. It will make sure that people might experience driving electric vehicles in their workplace so that some of those worries they have might disappear when they get behind the wheel and hit the accelerator, always driving at the speed limit, when they discover that these cars are as good, and, in some cases, better, than the car that they might be thinking about replacing.

Mr Katter interjecting

This bill is an important part of the government's wider electric car discount and Driving the Nation Fund policies, making electric cars cheaper, increasing sales and expanding the used car market. This will all lead to the necessary reductions in greenhouse gas emissions. Currently passenger transport makes up almost 10 per cent of Australia's carbon dioxide emissions. Our transport sector is one of the largest emitters, and we want to work with the transport sector to make sure that we can bring those emissions down and make the replacement products as affordable as possible.

I invite the member for Kennedy—and, indeed, any member—to visit the Perth electorate, and I will take them for a drive and show them the battery that is in my house, the charging cable and the solar panels on my roof. I am sure you will find it is entirely sustainable to have an electric car on renewable energy, and it is cheaper. That is an unavoidable fact. This is the cheapest type of fuel to put in a car today, and it will continue to be so for many years to come. Indeed, the Australian Electric Vehicle Association estimated that it would save some $500 in fuel and $100 in maintenance every year for average families who own an electric car. The data tells us that a standard electric vehicle is about 70 per cent cheaper to run than its petrol equivalent and 90 per cent cheaper if—as I am fortunate enough to be able to do—it is powered from rooftop solar.

On the story of rooftop solar, I think it is worth noting the contribution that former Prime Minister John Howard made on the question of rooftop solar. The incentives that former Prime Minister Howard put in place took us from about 200 rooftop solar panels across Australia when he put those incentives in place in 2001, and we now have millions of households that have rooftop solar and families who are saving as a result of those visionary policies of former Prime Minister John Howard. Indeed, in years to come, people will realise that the important work that has been done to make sure that electric vehicles are affordable for families—

It will go to making sure that we have more affordable vehicles, just as former Prime Minister Howard did when it came to solar panels—a legacy that is being trashed by the opposition at the moment.

But this is not just about passenger vehicles. I want to talk a bit about how this ties into the broader commitment of the Albanese Labor government in terms of making sure that we have a plan to rebuild our manufacturing industry and also make sure that our transport sector has a role to play in the renewable energy transition. We have committed some $15 billion into new manufacturing projects, prioritising the use of Australian made goods, building up our sovereign capacity and making sure that, as much is possible, Australian made content goes into the cars, buses and trains of the future.

As we roll out these plans to invest in a future made in Australia, one of them is about making electric buses in Perth. At the moment the bulk of the buses that I catch—the 950, the 960, the 60 and the 652 that gets me to the Fremantle dockers; and hopefully I will have a few more dockers game to go over the course of September—are diesel. I have been to the Volgren factory where they are produced. The people who make these buses do a fantastic job, and I want to make sure that those good, secure jobs that they have relied on for decades are there for decades to come. That is why we are investing, in partnership with the McGowan Labor government, some $250 million in an electric bus manufacturing facility in Perth. This means that the buses that will take my kids to school will be electric. It means that the cost of fuel for those buses will be less for the taxpayers of Western Australia and less for the taxpayers of Australia. It means that we will have 130, in the first run, Perth-built electric buses—not only protecting the jobs that are there but also creating 100 new jobs. That helps the 300 workers who are currently in the industry transition into green job. This is a great success story. These are the things that we can achieve when we work together. Again I say, when it comes to this renewable energy transition that is going to happen in Australia over coming decades, the more we work together, the better off the Australian people will be.

But I can't talk about this legislation that's happening today without talking about the wasted decade that precedes it. We are delivering on this within the first year of this government, after nine years of nothing. We had the 2019 claim by the then Prime Minister that electric vehicles would 'end the weekend'—an absolutely irresponsible and immature statement. We have some of the most narrow options for people who wish to purchase a car, because the former government sent the wrong messages to the world, saying, 'We don't want this stuff.' What we are saying now, as the new government, is 'Please bring your electric vehicles here; give consumers more choice.' To incentivise that, we will make sure the tax settings are as favourable as possible, in the constrained fiscal environment we face, to make sure that more people can experience the joy of driving an electric car on the weekend.

I will conclude my remarks by saying that this is one part of a broader Driving the Nation plan—a truly national electric vehicle charging network, with 117 new charging stations. I look forward to being able to drive across the Nullarbor, being able to get from Perth to Canberra, in my electric vehicle. I have promised the Minister for Climate Change and Energy that I will do exactly that once that network is built. I welcome anyone who is here to join me on that drive. It would be a lot more fun if you were to join me, Member for Kennedy! I look forward to you joining me for that drive.

We'll have a national hydrogen highway refuelling network. We'll set a low-emission vehicle target for the Commonwealth fleet of 75 per cent of new leased and purchased vehicles by 2025. We'll combine that with our commitment to get the Australian Public Service to net zero by 2030; an 82 per cent renewable energy mix by 2030; significant investment in the country's electricity grid, community batteries and solar banks. And we'll have those 9,000 households in Bayswater being able to access a community battery, if they choose, to charge their car.

I hope that, before this comes to a vote, those in the opposition find it within themselves to vote for a tax cut. I know they find it very hard to vote for a tax cut. It's not something that would be naturally in their political DNA to vote for a tax cut, but, on this occasion, I urge the opposition to find it within themselves to vote for a tax cut so Australian families can get the affordable cars, the cars of the future, the electric cars that are going to power us towards net zero by 2050.

6:42 pm

Allegra Spender (Wentworth, Independent) Share this | | Hansard source

I rise in support of the second reading of the Treasury Laws Amendment (Electric Car Discount) Bill 2022. The shift to zero-emission vehicles is essential to Australia's climate ambitions, to our fuel security and to easing cost-of-living pressures on households. With global supply likely be constrained for several years, Australia must act immediately to create a viable mass market for electric vehicles. Transition to EVs is an absolute priority for the community of Wentworth, from which I come. This bill is a step in the right direction, but it is only a very small step. It must be part of a much wider package that includes fuel efficiency standards, rapid investment in our charging infrastructure and a broader set of financial incentives that make EVs more affordable in Australia.

Transport is responsible for 19 per cent of Australia's emissions. The bulk of this comes from road transport, because failed government policy over many years has left us with one of the most emissions-intensive vehicle fleets in the world. On average, our passenger vehicles are 45 per cent more emissions intensive than those in Europe. Rapid decarbonisation of our transport sector is, therefore, essential for us to reach net zero by 2050.

However, this is not just about climate action; this is about energy security. Australia imports over 90 per cent of its liquid fuel from overseas. I was at an event with the former Chief of the Defence Force Chris Barry, who said that climate change was the greatest threat to Australian security, and that was absolutely identified because of fuel security. Recently, our fuel stockpile was reported to be just 32 days, well below the 90-day IEA requirement.

Our fuel imports are heavily exposed to East Asia. Given significant global uncertainty and tension in the region, this poses a real national security risk. Why import dirty foreign oil when we can power our cars on clean Australian sunshine? Because we are importing so much of our fuel, we are vulnerable to global price shocks. Even after the poorly targeted vehicle fuel excise tax, Australian families are paying through the nose at the bowser because of Putin's war on Ukraine and our dependence on expensive foreign oil. The transition to EVs must also be a priority for reducing the cost of living for Australian families in the medium term.

Despite these imperatives, Australia's being left behind. Research by the Grattan Institute suggests that if we're to achieve net zero by 2050 we need EVs to make up 100 per cent of light vehicle sales by 2035 at the latest. But where are we now? Well, EVs are 86 per cent of new cars in Norway, and 17 per cent in Europe. In Australia they are only two per cent. Despite more than half of Australians indicating they would consider buying an EV, a decade of policy value and scaremongering means Australia is a long, long way behind.

Last week, I met with the UK Secretary of State for International Trade, the Electric Vehicle Council, and Tritium, which is an Australian-born EV battery charging company that is second in the world in making chargers for batteries across Europe and the US. I spoke also to several prominent car manufacturers to discuss how we could support the EV market in Australia. Their message was really clear: Australia is not an attractive market for international car manufacturers looking to sell EVs. Talk to anyone in my electorate trying to buy an EV and they will tell you the same—it's six to 12 months on a waitlist. That is because we don't have the right policy settings. In a supply constrained world, as we are currently in, this is a real challenge. And in an environment where global supply will be constrained for several years to come, care manufacturers are choosing to send their cars to the UK and Europe, not to Australia. We are right at the back of the queue, and there is a real risk that if we don't get the policy settings right, Australians will miss out on cheaper, greener forms of transport. Federal leadership is needed to turn this around. We must be bold, we must be ambitious and we must act now.

So what should EV policy look like? The first thing we should do is what almost every other developed country does—introduce proper fuel efficiency standards. Over the last decade, fuel efficiency standards have been committed to by many Australian governments and recommended by multiple inquiries and reports. They are effective and they are free for the taxpayer. But they are not in place. Yet the absence of government actions means all we have in place right now is a weak and opaque industry-led voluntary standard. This is a long way from the best practice seen in Europe. Sixty-five per cent of Australians support the introduction of standards in line with those in Europe. If we had adopted efficiency standards back in 2015, Australian families would have saved an estimated $5.9 billion in fuel costs and emissions equivalent to a year's worth of domestic flights. Why didn't we act then? Well, we can't change the past, but what we can change is the future. Action on this is a no-brainer. I'm pleased to see the government has taken on board feedback from myself and other crossbench members on this matter and is at least considering this, but they needed to move very swiftly and decisively to bring in fuel efficiency standards.

Secondly, we need real action on EV charging infrastructure not just in our highways but also in our cities. In my electorate of Wentworth, a high concentration of strata housing means that many people do not have garages or driveways. Many people are renting, and they're in apartments. They do not have the infrastructure to charge vehicles, nor the solar necessarily on the roofs. This needs to be addressed. Evidence from the US has found that charging infrastructure is one of the most cost-effective measures of driving EV uptake, and it is one that the government must invest in even more strongly. Some people in my electorate have taken creative approaches to solving this problem. The other day I was going for a run and I came across an electric cable strung from somebody's house, tied around a parking sign and down to their car, because they had no charging infrastructure options but they wanted to charge their EVs. We need to do better.

Finally, we need to have real incentives to make EVs affordable and to encourage supply constrained manufacturers to bring their cheap and clean cars to Australia. In Germany, rebates are available at 9,000 euros for each vehicle. In France, it's 6000 euros. Similar examples from other countries abound.

One of the most valuable parts of this bill is that it will actually encourage the second-hand market for EVs. I think that's absolutely crucial, because we need to make sure that EVs are available to those who can afford the higher prices which are currently being paid, but also that EVs become more affordable for Australians across the income spectrum. In this respect, I think the bill before the House is a reasonable start. And I welcome the willingness of the Treasurer and the Minister for Climate Change and Energy to discuss the bill with me and other members of the crossbench.

But let's be clear. The majority of vehicles do not attract fringe benefits tax, and so they're not eligible for the discount proposed by this bill. The impact on EVs across the country will therefore be modest. On its own, this bill will not promote sufficient sales to align with Australia's climate change targets or even the government's pre-election modelling. On its own, it will not be enough to significantly enhance our fuel security or to lower bills for families in the medium term, and these are absolute priorities.

However, my message is clear: we must decarbonise our transport system and we must act decisively and ambitiously in pursuit of this goal. It will be good for our climate, good for our security and good for Australian families. This bill is a step in the right direction, but it is only a small step. I look forward to working with the government on a much broader range of measures in the coming months, and I thank them for their constructive engagement thus far.

6:51 pm

Photo of Bob KatterBob Katter (Kennedy, Katter's Australian Party) Share this | | Hansard source

I applaud the contribution by one of my crossbench colleagues. I'm absolutely fascinated by this place. It never ever ceases to amaze me. I go home and I'm the hero in the pubs when I tell them the latest news from Canberra. Well, the latest news is we're going subsidise imports. We're going to subsidise imports! Stand back from this decision and understand that you are subsidising imports.

There is a bloke called Ben Chifley who is in a lot of books, but, in my book, he is the Prime Minister without peer because he built the Australian motor car for Holden, and he did a number of other wonderful things. But, if you proposed to Ben Chifley, or 'Red Ted' Theodore, that a Labor government should subsidise imports, they would absolutely destroy you. They would not forget your name. They would pursue you until you were destroyed.

This country proudly, once upon a time, built its own motor cars. When we were given the opportunity to buy an Australian motor car, 62 per cent of the motor cars sold in Australia were Holdens. Then, later on, when other manufacturers opened up, that went up to 72 per cent of the cars sold in Australia. What happened was that they moved the dollar, they propped it up, and, when it fell through the floor, the price of cars doubled. The Productivity Commission said that, if we removed the tariffs and subsidies, there would be a 23 per cent intrusion into the Australian market within 15 years. Well, within five years, it was a100 per cent intrusion, when Mr Keating removed the support levels and let the dollar float—or pushed the dollar up, and then it collapsed.

I just want to go back to the basic premise here. We're going to subsidise imports. For heaven's sake, why would you not build the cars yourselves? I'm very confident all the crossbenchers will be moving to that effect. The other members and the major parties can decide to either join us in building our own motor cars or continue to subsidise imports. They'll be given that choice.

If you are serious about cutting emissions, I think the book you should read—and it's a textbook available throughout the world—is Al Gore's book. I describe myself as an anti-Green. I refer to the Greens as 'gangreens'. They don't refer to me very nicely either, I've got to say. But read Al Gore's book. The first solution is ethanol.

You don't have to be Mr Albert Einstein to figure out that if you burn petrol, or you burn coal, or you burn coal to make glass that goes on your roof—because there's some sort of thing. Oh, it's a miracle! You just put the stuff on your roof and there's no emissions. Well, just hold on a minute. You've got to make superpure silicon. As a mining man who mined my own copper from my own mines, I can tell you that it is extremely complicated to produce superpure silicon. I speak with very great authority, because, if you ask who was the person who put the first standalone solar energy system in Australia—I won, arguably, a national science prize that year—it was me. Right back in 1983, we put the first system in, and it is a wonderful system for Normanton or Julia Creek or Kowanyama. But, if you start putting glass on roofs in the cities, it would be really silly. It would be criminally silly from the point of view of CO2.

I haven't got time, in a short speech, to be able to tell you how to make superpure silicon. The reason I'm an expert in the field is that we negotiated with GE. The head of GE for the world came out for the opening of the first standalone system in the Southern Hemisphere, which was on Coconut Island, and the reason he was so interested was that there are some 300 islands in Indonesia that will need to be electrified with solar power. Now, we wanted to sell the silicon. We've got the best silicon resources in the world, and we export it. We were exporting it for $56 and buying it back for $3 million a tonne as optical fibre or as solar panels. We exported it for $56 a tonne and we imported at $3 million a tonne. Well, how much longer?

Our economy is a primitive economy. We're not an industrialised nation. Our exports now are almost exclusively coal and iron ore. And how do you get iron ore? You smelt it. How do you smelt it? With coal. So you burn coal to get iron ore. The solar panels on your roof must be pure silicon. How do you treat silicon to get it to be pure? You have to smelt it. What do you smelt it with? Iron ore. There's another nasty little intrusion in silicon, because you've got to put it under electromagnets, which use a huge amount of electricity. Silicon is the second-hardest element on earth. It's second to diamond in hardness. To crush it is not a lot of fun. I can tell you, as a mining man, that putting it in a bore mill is hard yakka. But then you've got to smelt it, and you smelt it with coal. So what do you think? This glass gets on your roof without any CO2 going up in the atmosphere? And, in 20 years time, you'll take it all off again. I don't know how much energy you burn up putting it on the roof and then taking it off again. Now, I'm not knocking it, because I think that it's wonderful in remote situations, but to use it in a city is an act of madness.

You have heard speakers here say that the power is cheaper—that it's cheaper to run electric car. Yes, it is. And solar is cheaper, yes. But, for using intermittent solar power, the baseload power resultingly rises, because the power station that was once producing 100 per cent of our electricity can now only sell 70 per cent of its electricity. So, of course, for it to be able to work profitably, the price of baseload power must go up. The state with the most solar on the roof is Queensland, as it should be; we've got the most sunlight. But did the power prices come down? Did the price of electricity come down? No. The price went up 400 per cent. So let me tell you what the net result is of this glass on your roof. Four out of five of our neighbours in Charters Towers are pensioners, so they can't afford the capital outlay to put solar on the roof. The banks won't look at them because they're advanced in years, so they can't put solar on the roof. But rich people like the Katters can. My wife put solar on the roof, so we don't pay anything for our electricity, but pensioners subsidise us. Our pensioner neighbours subsidise us. If it's so wonderful, how come the price of electricity in Queensland has gone up 400 per cent since I was the minister in Queensland? It was $674 for 11 straight years. There was no justification for putting it up. Last time I looked, it was $3,240 a year.

I just find it almost impossible to vote for legislation that subsidises imports. A number of crossbenchers have discussed this at great length and we prepared legislation which was to go before the last parliament. What we're proposing is that we build electric cars in Australia. The simple way to do this, without any cost, is for all government cars in metropolitan areas to be electric and all buses, which we do make in Australia, to be electric. It's very simple to do that. Why wouldn't you do that? More people die in Australia from motor vehicle emissions than from motor vehicle accidents. You can cut that out by simply putting five to 15 per cent ethanol in your petrol tank, which every country on earth has done except Australia. Look at the map of the world. The European agreement is that every country goes to a minimum of five per cent—and I'm not going to go into the details. If you move from a rural centre into Sydney, then your chances of dying of lung cancer or heart disease double. Those are the long-term findings in America, out of California. From that point forth, America immediately moved the Clean Air Act and put ethanol in their petrol tanks.

These answers are there. Australia will be producing our own petrol. We export all of our oil. What sort of a moronic country exports all of its oil and imports all of its petrol, diesel and avgas? Are we complete morons in this place? When I sit here and subsidise imports, I think that we are. My colleagues on the crossbenches have been working to formulate a program that will return the building of motor cars to Australia. Sophisticated secondary industries will be restored to this country, and those industries will be owned by the Australian people. Ben Chifley was the Prime Minister without peer. He is so far out in front that there is no-one one that could compare, but Ben did make a mistake: he let General Motors build motor cars in Australia. They should have been built and owned by the Australian people, and that would have been a very simple thing to do at the time. His government was destroyed because they wanted to nationalise the banks, so he was not going to be a person that had the political ability to go in a different direction.

Having said all those things, we are moving an amendment that has been circulated in my name. I move:

That all words after "whilst" be omitted with a view to substituting the following words:

the House notes:

(1) this bill seeks to encourage a greater take up of electric cars by making them more affordable by, under certain conditions, exempting them for fringe benefits tax; and

(2) that to achieve real and effective affordability and self-sustainability the bill should include detailed measures to provide:

(a) Australian manufacture by Australian majority owned companies of electric vehicles and buses, and their component parts including battery production;

(b) framework to require, by 2035, all vehicles in metropolitan areas purchased by local, state, territory and federal governments to be electric vehicles manufactured in Australia from Australian made component parts; and

(c) framework to facilitate the purchase of all new commercial and government buses in metropolitan areas to be electric buses manufactured in Australia from Australian made component parts".

I just want to add: when I hold this map up to everyone and I say, 'What's that a map of?', they all say, 'Australia.' Well, no, it's not actually. It's a map of Australia shorn of the eastern coastline. It's shorn of Victoria—but who'd miss Victoria—and a little dot around Perth. There are only a million people living there. Our biggest export is iron ore, and guess where it comes from: the golden Australia where there's no-one living. Our second-biggest export is coal, and guess where the coal comes from: the golden Australia where no-one is living. Guess where all the water is: in the golden Australia where no-one is living. Guess where all the cattle are: in the golden Australia where no-one is living. Guess where all the aluminium is: in the golden Australia where no-one is living. And how much longer do you think that's going to go on for?

If you give us a little skerrick of the $170 billion that is coming into superannuation funds, we will build small dams, which will create an enormous improvement in our environmental conditions, where 15 million hectares has gone under prickly acacia tree, and the place is overrun with pigs. We can deal with those things if you give us a little skerrick of money to build a series of small dams with thread irrigation. If you fly over it, you won't see much green, but it will improve our lot immensely. Then we can give you back all the petrol you will ever need, free forever.

When you burn petrol, CO2 goes up into the atmosphere. When you burn ethanol, CO2 goes up into the atmosphere, but there is one huge difference: the next year, the sugar cane or grain, sorghum, pulls it down again. So it goes up and it goes down. But it doesn't go up and stay up. That's why no less a person than Al Gore, in An Inconvenient Truth, gives us the first solution: ethanol. If you look at the European agreement, they all have to go to five per cent. That is actually for medical reasons, not so much for environmental reasons, although that was part of it. Japan is on five per cent. China is going on five per cent. India claim they are going on five per cent. America is on about 15 per cent. Brazil is on 40 or 50 per cent. These are the leading economies on earth. They're all doing it, with one exception. Where in the world does a government subsidise imports? Tell me any country that subsidises imports. But that is what we are doing here.

Photo of Sharon ClaydonSharon Claydon (Newcastle, Australian Labor Party) Share this | | Hansard source

You have run out of time. Is there a seconder to the amendment?

Photo of Angus TaylorAngus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | | Hansard source

I second the motion moved by the member for Kennedy and reserve my right to speak.

7:07 pm

Photo of Nola MarinoNola Marino (Forrest, Liberal Party, Shadow Assistant Minister for Education) Share this | | Hansard source

I support the amendment moved by the member for Hume to the Treasury Laws Amendment (Electric Car Discount) Bill 2022. In government, the coalition's Future Fuels and Vehicles Strategy was a technology led approach to reducing emissions in the transport sector. It directly involved working closely with the private sector to increase the uptake of hybrid, hydrogen, electric and biofuel fuelled vehicles. Designed to make it easier to roll out future fuel technologies, it focused on giving people choice in the vehicles they need to drive or want to drive. A critical part of that strategy was to ensure that our electricity grid, a key part of the infrastructure required, had the capacity for more electric vehicles and the greater demand on the system, which demonstrates why our opposition to this bill is based on the fact that this is poor legislation, lacking in careful planning. This is something we saw repeatedly the last time Labor was in government.

When we look at this bill, the Labor government has even failed to outline the emissions benefits and long-term costings, facts I would have thought were essential in a bill of this type. Labor also failed to consult with industry, state and territory governments and civil society. Again, I would have thought that genuine and extensive consultation would be a prerequisite and deliver a better result in the application and effect of such legislation. Without that detail, the result we see in front of us is a high cost to taxpayers and a low impact on reducing emissions. The proposal costs $205 million over the forward estimates, according to the bill. However, the Parliamentary Budget Office post-election report costed the medium-term projection at $2.3 billion over the decade, and at over $639 million per annum by 2032-33—a clear demonstration of the cost to taxpayers.

The Labor government cannot quantify how the measures in this bill will deliver emissions reductions. Evidence from the Treasury and the Department of Climate Change, Energy, the Environment and Water showed the impact on emissions reductions has not been quantified. In fact, third-party evidence suggests it's actually negligible. The government has not detailed exactly what measures in the bill will deliver to, or impact on, the EV market. The government should be delivering well-designed, well-targeted and quantified details and should be partnering with industry, particularly given it will cost taxpayers over $2.3 billion.

We know demand for electric vehicles is increasing. However, two per cent of the total number of vehicles sold in Australia in 2021 were EVs. To my knowledge, none of them were utes. The top-selling vehicles in Australia are the Toyota Hilux and the Ford Ranger, both utes. It's a completely different market to much of the rest of the world. Whether those utes are for tradies, farmers or other people in outer metro, rural and regional areas, these are the top sellers in Australia.

We know we need a managed transition to the increasing electric vehicle uptake. The demand on and availability of power and the infrastructure needed—the very issues referred to by the member for Hume, the shadow Treasurer, in his amendment—are why the process needs to directly involve the states and territories. For instance, in Western Australia, solar panel companies and electricians are raising concerns that Western Power policy is having real impacts on homeowners. When homeowners are fitting solar panels to their homes, Western Power now requires regional and rural homes to install a main switch with a 32-amp circuit breaker. By comparison, in metro areas, people have access to 63-amp circuit breakers.

We know that most Australians want to charge their electric vehicles at home. Some homes will use a level 1 AC slow charger trickle feed, which generally is two kilowatts of charge through a normal 10-amp socket. Depending on the battery size, this means it can take up to 40 hours to charge. There are many different types of commercial options available to reduce charging times. There is a real need to know what the cost of EV chargers in homes will be, what the cost of upgrading the electrical systems for individuals and homeowners will be, and whether the extra power needed will be available. These are real issues. I know that costs range from $1,000 for a seven-kilowatt option through to $3,000 for a 22-kilowatt option, plus installation and associated costs to ensure the house can deliver the power required to meet the daily needs of the home as well as charging the family or business vehicle, or more than one vehicle.

Clearly, the difference between power delivery for rural and regional areas in WA and delivery for Perth metro areas is stark. What it does for me is to highlight the fact that the WA state Labor government is focusing on the metro at the expense of rural and regional areas, where the wealth is generated. It also highlights the fact that the $2.3 billion cost of the measures in this bill could be better spent on looking at the various EVs on the market and the information provided, much of which focuses on charging, at times, with public chargers—times ranging from 30 minutes upwards. But, at home, charging times for a regular wall socket range from 11 to 20 hours, and, as I said earlier, depending on the battery, can be up to 40 hours.

These are examples of the need for good consultations and a managed transition—exactly what the Labor government hasn't done with this bill. Consultation definitely needed to involve industry, particularly the automotive industry, given what I heard from the sector last night at an automotive vehicle emissions meeting here in Parliament House. One point made there resonated with me: by 2030, the demand for vehicle batteries globally will be 100 million, and the estimated supply available at that time will actually be 40 million only.

Other experts have raised serious questions about the equity, fiscal sustainability and price pressures on the EV market currently. The government has failed to quantify these issues and failed to consult. The Institute of Public Accountants has said that the policy will have a negligible impact on reducing Australia's carbon emissions from the transport sector. I will also be very interested to see who benefits the most from this measure. Will it be rural, regional and remote Australia or will it be predominantly metropolitan and city-based beneficiaries? This is something that I will certainly be following closely.

I have already touched on the problems of access to power for rural and regional WA. There are any number of practical measures the government could have directed the $2.3 billion taxpayer funding towards, given the challenges ahead in the transition to more EVs in Australia: the infrastructure challenges; the increases ahead in transmission availability and capacity; the increased demand for and access to fast-charging stations; and the impacts on small, regional and remote communities with existing limitations on power capacity. Some of our roadhouses are still using generators in their patches. These will, I suspect, need to be points of fast charging.

I was talking to a local car dealer, and he is concerned about some of the smaller communities that have a limited capacity right now, if you are driving long distances, particularly around Western Australia and to the north, and the additional demand that will place on a local town, like Tom Price or somewhere similar. We don't want to see those communities suffer from a blackout because there are a whole lot of cars being plugged in and dragging on the local power system.

There is also the cost of retraining our current mechanics. Will they actually need virtually the same qualifications as household electricians to be able to deal with 240 volts, for instance? There are also issues facing car dealers and car service centres around EV battery management and the warranties on the batteries. I don't want to see that responsibility sit with our local car dealers and not with the manufacturers. More broadly, there are many issues facing businesses, like one in my electorate that is installing a significant quantity of solar panels but is also having to provide a fireproof building to house the batteries.

There is so much ahead as we transition through the process. However, one of the first steps that we are seeing from Labor with this bill is poorly implemented policy with no consultation. There will need to be greater scrutiny on this ahead, particularly on where the benefits of the $2.3 billion actually go. On the most telling assessment of where the benefits will go, I think it is worth repeating the words of the Shadow Treasurer, who also quoted Professor Miranda Stewart. Professor Stewart—a respected tax expert, a director of the Tax Group at the University of Melbourne Law School and a fellow at the Tax and Transfer Policy Institute at the Crawford School of Public Policy at ANU—said that the design of the measure must be changed 'given its fiscal cost, unequal benefit and uncertainty about the electric car market and the best policy to transition Australia'. Professor Stewart also said that the policy will 'deliver the subsidy to a rather narrow class of employee beneficiaries and provides the largest benefit to the highest income earners'—damning indeed. Clearly, the benefits in this bill will not flow to lower and modest income earners, whose taxes will help pay the $2 billion plus cost of this bill. I will be following very closely to see whether the benefits actually flow to rural, regional and remote communities, one of which I represent.

7:19 pm

Colin 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.

Photo of Sharon ClaydonSharon Claydon (Newcastle, Australian Labor Party) Share this | | Hansard source

There are three minutes until the Federation Chamber will be adjourned. I'll give you the call, member for Fowler, just on the understanding that we're about to reach time. You will have time again tomorrow.

7:27 pm

Dai Le (Fowler, Independent) Share this | | Hansard source

Thank you, Deputy Speaker. I rise to speak to the Treasury Laws Amendment (Electric Car Discount) Bill 2022, which provides fringe benefits tax exemptions for zero- or low-emission cars. I stand in support of the honourable member for Kennedy's amendment, which provides a framework for how a transition to renewables can benefit low-socioeconomic communities like my electorate of Fowler, who are the backbone of Australia. In keeping with this, I will also be speaking to an amendment to include hybrid electric vehicles—that is, vehicles that do not require an external electricity source to be charged.

This government and this parliament have strongly endorsed progress on Australia's climate policy and climate awareness, and I stand largely in support of this movement. I believe Australia should strive for a green and renewable future. It is imperative that we do so to support the wellbeing of future generations and preserve this beautiful country we call home. Handled correctly, a transition to renewables presents rich and diverse opportunities for the Australian economy that will be sustainable into the future. Furthermore, I commend the government for its desire to reduce transport emissions and make electric cars more affordable for families and businesses. Encouraging the uptake of battery electric cars, hydrogen fuel cell electric cars and plug-in hybrid electric cars is in theory a positive step. However, the government's amendment bill only helps a narrow group of employee beneficiaries and disproportionately supports high-income earners.

Recently we have seen the impact on household budgets that a spike in energy prices caused. Prices increased as much as 18.3 per cent in New South Wales, heavily impacting our most vulnerable. I would ask the chamber to consider the impact that increasingly extreme summer temperatures will have on the household budgets of low-income families. Some will struggle to afford necessary amenities such as air conditioning, something a lot of us take for granted. I raise this example to show that it is hardworking people in electorates like my own, as well as regional electorates, who bear the brunt of climate change and climate policy.

I therefore strongly support steps towards a greener future, but we must be careful to ensure it is not at the expense of those already doing it tough in places like Fowler. My constituents will be completely unaffected by this fringe benefits tax exemption for electric vehicles. Even with this exemption, electric vehicles are still simply too expensive for small businesses in Fowler. This exemption is only useful for employees or employers who can offer salary sacrifice. Electric vehicles cost between $15,000 and $20,000 more than the equivalent petrol and diesel cars, a huge upfront cost to expect small businesses to pay.

Furthermore, the amendments don't apply to hybrid vehicles, or HEVs, which are at a lower price point than other EVs. HEVs are the third-most-sold types of cars in Australia after petrol and diesel vehicles. If we are to convince normal, everyday consumers to start making the switch, we also need to ensure HEVs are included in any subsidies. Thank you.

Photo of Sharon ClaydonSharon Claydon (Newcastle, Australian Labor Party) Share this | | Hansard source

The time being 7.30 pm, the debate is adjourned, and the resumption of the debate will be made an order of the day for the next sitting. Member for Fowler, your speech was interrupted, so, if you seek leave tomorrow, permission will be granted for you to continue your speech.

Dai Le (Fowler, Independent) Share this | | Hansard source

Thank you, Deputy Speaker.

Photo of Sharon ClaydonSharon Claydon (Newcastle, Australian Labor Party) Share this | | Hansard source

I take it that you foreshadowed those amendments, and you will be able to move them at a later date as well.

Federation Chamber adjourned at 19:31