Senate debates

Thursday, 24 November 2022


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

6:37 pm

Photo of Matthew CanavanMatthew Canavan (Queensland, Liberal National Party) Share this | Hansard source

Well, I don't know if it's ideology, Senator Rennick. I think it just comes down to money. It's just that people want to have a subsidised vehicle. Good luck to them, but we're approaching a trillion dollars in debt and we have to get our house in order—and we're coming out of the coronavirus period. I don't think we have the money to provide very, very rich people in this country with a subsidy for a new car. I don't think that should be a fundamental priority of this nation.

I also want to come back to Senator Cadell's excellent point about the fact that electric vehicles are already subsidised, in a sense, or, at least they get favoured treatment in our overall tax system. Electric cars are not subject to any kind of fuel excise. We don't hype that fuel excise. I think it's almost 40c now on petrol or diesel when you go to fill up your car. About 40c of that comes back to Canberra here. It doesn't directly go back to roads, but the basic system is that we put that tax on fuel so that we can have funds to invest back into roads, and especially into rural roads that aren't doing so well. We spend about the same amount of money that's raised from car registration at the state level and the fuel excise on roads every year.

As electric cars continue to be in demand, that revenue source will dry up and we won't get that fuel excise anymore. So there is a real question here about how we fund our roads. Of course, those people buying electric cars already get that benefit. They already get that now. They don't have to pay a fuel excise to drive and run their car. It's an open question how we will tackle this issue going forward, but there actually already is an in-built subsidy to electric cars right now. This bill just perpetuates that subsidy and not in ways that seem as if they will progress any particular public any good.

I think we also need to understand here how these electric cars are made. I said before that they're very carbon intensive, but the other issue here is that the minerals and techniques that are used to create batteries have potentially other environmental downsides as well. It's something that goes complete unremarked, especially by the renewable energy industry, that production of cobalt, nickel and lithium in some countries can be extremely environmentally hazardous. There are ways of doing this properly—and I would argue our mining industry in this country does generally do things properly—but that comes at a certain cost. The production right now of especially minerals like cobalt is done largely in developing countries. Cobalt is produced largely in the Democratic Republic of the Congo, where there are terrible labour standards and also shocking environmental outcomes.

The reason for this is that those minerals that go into batteries—unlike fossil fuels like petrol, oil, gas and coal—aren't easily obtained in the natural environment. Coal, oil and gas, generally speaking, are contained in large deposits and are quite easily extracted without having to do too much to them—maybe a bit of washing with water in the case of coal. In the case of these hard rock minerals, like nickel and cobalt, you have to engage in serious use of chemicals to extract the somewhat rare ores within the overall rock that you've mined. There's a huge amount of waste, a huge amount of energy and, yes, a huge amount of use of chemicals. As I say, if you do that properly, you can protect the environment—but it's costly and it takes significant regulation. However, in countries like Congo, you don't have those regulations and you have terrible environmental pollution of rivers and environmental wastelands.

This bill does nothing to set any standards. While we are doing this, why don't we set standards? Why don't we say we'll subsidise only cars that have ethical standards for the sourcing of cobalt and nickel? Again, it comes back to the money. That's what this is about. We won't set those standards because that would interrupt the money flows that are going to people in the renewable energy industry from the Greens and their voters, and of course the rich people will get a massive big tax cut thanks to this so-called Labor bill.


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