Simon Birmingham (SA, Liberal Party) Share this | Hansard source

Senator Conroy, you should be embarrassed. You should be embarrassed as senator for Victoria. Your state relies on the automotive industry just as much as South Australia does. It is amazing that you are happy to sit back and let them take this slug. It is little wonder that Ford has decided to stop making a Fairlane in Victoria, Senator Conroy. They know that, under the politics of envy, in your government those types of cars are going to be put out of business anyway.

That brings me on to the damage the luxury car tax will do to the Australian automotive industry. They came in quite clearly to the inquiry by the Senate Standing Committee on Economics and made their views known. In your own state, Senator Conroy, the Victorian Automobile Chamber of Commerce said:

... this tax hits a segment of the local vehicle manufacturing industry that has been growing ... or maintaining sales ... while sales in other segments have been falling, and any increase in this tax will simply exacerbate that situation.

Senator Conroy, you were slammed by the Victorian Automobile Chamber of Commerce. Representing the Federal Chamber of Automotive Industries, Mr Andrew McKellar told the inquiry:

When this tax was originally introduced it was a thinly veiled protectionist measure for the local industry. These days it actually adversely impacts the industry, because it means the level of competition that those local brands are facing is more and more intense.

The industry recognises that this tax rise will actually do them harm. As they make premium vehicles they are trying to compete with imported vehicles and others, but the tax rise that pushes up the price of the premium vehicles that Australian industry is making in Victoria and South Australia will do them very clear damage.

Senator Hurley wanted to talk about the vehicles that are affected. The truth is there are a number of vehicles affected. She used every different example in relation to a Tarago and tried to sweep off the one that is actually affected. Of course, she did not go anywhere near the LandCruisers that are important to our rural communities; she did not go anywhere near some of the other vehicles that are important in those rural sectors; she wanted to talk about utes. Utes are important, certainly, but in our country communities, in agricultural communities, four-wheel-drives are particularly important and they are nearly all hit by this tax measure.

Unlike Senator Hurley, I receive very strong representations from people who are concerned about this. In South Australia, the local member for Stuart, Graham Gunn, representing a large part of the state, has made very clear to me that this tax impost will hurt local communities in his remote and regional areas. It will hurt farmers and those living in remote areas. It is an unnecessary tax impost directed very much at them. He has been supported in those representations by the new candidate for Stuart, Dan van Holst Pellekaan, who has actually made it very clear to me, in very strong and passionate terms, the number of people in areas like Port Augusta and elsewhere in rural and regional South Australia who have raised the tax rise with him. They have raised it with him because they are concerned that they are not going to be able to afford the types of vehicles they need to run their businesses, get their children to school and actually do the day-to-day things that are required when you are living in a remote or regional area.

The tourism industry in particular has highlighted this to me. Michael Pengilly, our state member for Finniss in South Australia, has put me in touch with Paul Brown from Kangaroo Island Wilderness Tours. In Kangaroo Island, the Flinders Ranges and many other regional tourism centres, a large part of the tourist product is actually four-wheel-drive tours. They are four-wheel-drive tours that are trying to cater to high-yield tourism markets and are trying to actually deliver a quality product to people coming to Australia, spending tourism dollars and generating economic activity in these areas. They need to upgrade their vehicles every couple of years to ensure, firstly, that the wear and tear is not too great on them and, secondly, that they are maintaining the high standards of quality product that consumers in their industry expect. What is going to happen now? They are going to face an even higher tax slug when they upgrade those vehicles. They will probably have to upgrade them less frequently. Tourists are going to get a lesser-quality experience as a result of that, or the operators’ profit margins are going to be hit. It is a direct hit on those types of tourism business.

It is a direct hit on larger families, as I said before, but it is also an amazing hit from this government on environmentally-friendly cars. A lot of the cars on the market that are hybrid cars or use low-emissions technologies are hit by this luxury car tax. Those cars are now going to cost more as a result of this. This was one of those little hidden whammies for the environment and for the government’s so-called ambitions to tackle climate change that were buried away in the budget. Their means-testing on the solar panels rebate clearly hit the solar industry hard and was a negative impact on measures to tackle climate change, and this tax measure, which will hit hybrid vehicles and those using low-emissions technologies, is another hit to climate change—another whack from the government out of this budget.

You do wonder, as they were constructing this budget, whether they were thinking at all about the overall objectives the government had in areas like climate change or whether they were ignoring it altogether. Of course, we know they were not thinking in a large, strategic context, because well before the budget was handed down they had commenced the Bracks review into the automotive industry. So they had a review looking at factors impacting on the automotive industry well underway before bringing down the budget, but, when considering the luxury car tax increase, did they say, ‘Hang on a minute, we’ve got the Bracks review happening. We might just wait until it reports to see whether or not we should consider this tax rise’?