Steve Fielding (Victoria, Family First Party) Share this | Hansard source

Five seats, someone else mentions. Small businesses in tourism are struggling with high petrol prices, which are also impacting on tourist numbers with the increasing price of aeroplane flights, but now they also have to deal with an increase in capital costs for their business. One tourism operator has a fleet of 30 vehicles and buys five a year. Under the new tax, that business will have to find another $40,000 to cover the extra luxury car tax. Family First wants to help small businesses in the tourism industry by exempting the commercial vehicles or by sitting down with the government and discussing, as we have been, how to overcome the problem for tourism operators. Family First is also concerned that the tax might hit rural and regional people with extra costs because it increases the price of some four-wheel drive vehicles. City based people buy more four-wheel drive cars than rural and regional people, but people in the rural and regional areas are more dependent on their off-road vehicles to deal with difficult conditions. Family First also wants to see an exemption or some other way for four-wheel drive vehicles that are registered in rural areas, in recognition that families in rural and regional Australia are doing it tough. These are two issues on which we are still in discussion with the government.

Another concern is that increasing the tax on the top end of the market may encourage car prices up across the board. Increasing the tax take might change some of the relativities between different types of cars so that prices are dragged upwards. Increasing the tax might also increase demand for lower priced cars and drive up the cost of cars in that bracket. If there are price hikes in the new car market, these might also flow through to the second-hand market. Second-hand cars might end up more expensive, both because the prices of some new cars are higher and because higher prices might mean that people look to the second-hand market for luxury cars instead.

There is also a question of whether the extra tax should be applied to the most fuel-efficient cars, but the same argument could be used for safer cars. Family First is sympathetic to the concerns raised that this tax may be slapped onto the most fuel-efficient cars in the market, and that is an issue to be considered, but, as I was saying, that could also be said for the safer cars. It is also necessary to look at how fuel efficiency tax would affect Australia’s car market. Family First wants higher efficiency standards for new cars, including European fuel efficiency standards, and would support assistance for the Australian car industry to help meet those standards. It is important to consider the best way to encourage and support families to buy more environmentally friendly vehicles, considering things such as rebates for cars that meet efficiency standards. Family First will be considering all these issues when making a final decision on the luxury car tax bill. Family First is really concerned—underlined—about passing a tax that slugs small tourism operators and farmers.

Debate interrupted.