Jacinta Collins (Victoria, Australian Labor Party) Share this | Hansard source

Yes indeed, Senator Abetz. For those such as you who want to be pedantic, the measure introduced in 1979 was a depreciation limit on luxury cars. In effect it was a differential tax treatment.

Why the opposition has sought to hide its role in introducing differential tax treatments for luxury cars is beyond me. It is a fairly simple concept that is easily observed by anyone who understands the history in this area. If you looked at the report of the Senate committee you would be stunned at the success that the opposition had at trying to move away from their role in relation to luxury vehicles.

The differential treatment was continued, with different rates of wholesale sales tax. Indeed, the luxury car tax was introduced by the previous government on 1 July 2000 when the GST was introduced and the wholesale sales tax was abolished. The previous government did this to preserve the impact of a differential treatment under the wholesales sales tax. In 2000, the previous government thought it was appropriate to tax luxury cars at a higher rate than other cars. Now that they are in opposition, the temptation to wreak havoc seems to be all that lies behind their reversal of policy. Indeed, they have even sought to hide their role in the original introduction of such differential treatment of luxury cars.

With this bill we are not introducing a new tax; we are changing the tax rate on a tax that was introduced by the previous government. A change in the tax rate is appropriate given the economic conditions that we face. Let me revisit those economic conditions in case some of the senators need a reminder of the economic circumstances that Australian families are currently facing. The global economy is in a very difficult position. It faces some of the biggest challenges that have been seen for many years. The world simultaneously faces the global credit crunch and steep rises in oil prices. Either of those factors on its own would create instability and threaten growth.

Rather than work with the government of the day in a sensible approach to try to ensure long-term growth in our strategy with respect to the budget surplus, what does this opposition seek to do? It seeks to eat away at the very surplus we will be using to invest in our future. It seeks to eat away at our capacity to operate the Building Australia Fund for infrastructure, the Education Investment Fund and the Health and Hospitals Fund. This is very surprising given the former government’s position on a range of those areas. We know the difficulties we have had in establishing the appropriate infrastructure for our future and the contribution that that has made to our current economic circumstances. Limited investment in infrastructure is one of the problems of our current economic position in Australia. Similarly, industry getting access to skilled and trained workers is a significant problem in meeting our current economic circumstances. And if the Education Investment Fund is eaten away by this opposition’s attempt to sabotage the surplus, it will have a further negative impact on what we are able to do in this area.

As for the Health and Hospitals Fund, this opposition stands here and says, ‘We are out there for working families.’ Well, you tell those working families that we have limited capacity to roll out the Rudd government’s health and hospital measures, which working families around Australia desperately need, because you felt it was necessary to block a luxury car tax. That is the argument you need to put very clearly to the Australian population.

Then again, as I believe Senator Bishop said, this is an opposition that, when they got the numbers in the Senate and they could work the measures that they had been attempting to get through the Senate for many years, went the whole hog, and the Australian public did not like it. It is no surprise that working families did not like Work Choices. All and sundry could have explained that point to the now opposition, but they were blinded by the opportunity that had been presented to them and they went the whole hog.

Now we are in a different situation again. The opposition is seeking to contain the Rudd government’s capacity to deliver on a range of very important and significant areas: the Building Australia Fund for infrastructure, the Education Investment Fund for the skills and training necessary to boost industry and the Health and Hospitals Fund to provide those services desperately needed by Australian families.

And what rhetoric does this opposition come up with to sustain their argument? It is not really about the technical details of the luxury car tax. No, they cry about the politics of envy, old class warfare and a range of other rhetoric I had thought was long dead, but which has been revitalised in this debate and in the dissenting report from coalition senators. That is their first point.

Their second point is that we are pre-empting the Bracks review and the Henry review—this from the opposition that I have heard nothing else from in recent months than, ‘All you’re doing is reviewing, reviewing, reviewing, reviewing.’ I am sorry, Senator Abetz, but you cannot have it both ways. What the Rudd government clearly saw was the need to enhance our surplus, to improve revenue and to take more immediate action. Certainly we have triggered a longer term approach to dealing with longstanding difficulties and issues with our tax system, and I more than anyone look forward to the Henry review across a range of areas—many of the areas being addressed were subject to a Senate inquiry that I sought to progress some years ago, and it is very important that the Henry review deal with those issues and those matters—but to hold up a fairly simple, straightforward measure to improve the government’s overall revenue and surplus situation on the basis that we are pre-empting the Bracks review and the Henry review, from this opposition, is simply hypocritical.

Now let us look at the other factors that they raise in their report. Lack of consultation, I thought, was a really good one—lack of consultation on budget measures, from this opposition, the former government. Given the range of areas that this opposition has form in with respect to lack of consultation, I found that one particularly galling. In fact, I found most of the report from dissenting coalition senators on these bills somewhat galling, and I have not heard much in this debate now to enhance my assessment.

Let me conclude by summarising the position that I have covered today. In the face of difficult international economic conditions, the government is adopting a responsible, fiscally conservative position. The luxury car tax is part of the overall budget position. The tax is moderate and directed at those most able to bear it. It is reckless of the opposition to play politics with the budget in this matter. Interest rate relief, desperately needed by Australian working families, will come more quickly if this opposition responds more responsibly.