Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

The Tax Laws Amendment (Luxury Car Tax) Bill 2008 is a very important bill for the National Party. It is one that I do not believe that the government or the Independents have really thought hard about—what it is going to achieve. Senator Fielding has moved amendments that would exclude farmers and tourism operators from the increased tax, but he has overlooked the fact that there are many, many other people in rural Australia who find four-wheel drives not a luxury but an absolute necessity when living out in remote areas. I suggest to you, Senator Fielding, that some of the people you may have forgotten are people in Aboriginal communities, who always use four-wheel drives. If you ever go to the communities, you will be met at the airport by a Toyota or a Nissan or another four-wheel drive.

Over the weekend I received a letter from the boating industry, saying:

Like farmers and tourist operators, boat manufacturers and distributors rely on the use of large four-wheel drives in the course of their day-to-day operations in order to tow boats in accordance with the law on towing ratios—e.g. a 3.5-tonne boat must be towed by a Toyota LandCruiser or a vehicle of equal power. These vehicles cost in excess of $57,000. There are 1500 boating industry association members across the nation who will be affected by the luxury car tax …

They go on to say:

There are 850,000 registered boats in Australia that are towable.

All these people are going to be hit by the increased sales tax. Then, if you look at the caravan industry, there are similar problems there. Four-wheel drive vehicles are absolutely essential to carrying on the business of caravan and boat distributors. So, although I appreciate the exemption amendment that Senator Fielding has moved, it is not only farmers and tourism operators. There are many, many other people in the western areas that have to have a four-wheel drive to actually live in those areas.

Some time ago, when the Labor Party was previously in power, the National Party experienced a series of car accidents involving its members. Unfortunately, the wives of two National Party members were killed in car accidents in the west: Bruce Cowan’s wife and Noel Hicks’s wife. Tim Fischer, the former Deputy Prime Minister, had a car accident in which two people were killed. John Anderson’s wife rolled a car seven times and was very fortunate to be able to get out with their children. The then Labor Party realised that if you were going to travel out west and do great distances on poor roads then it was essential to be in a car of some substance. That is why the then Labor Party, to their credit, offered people with vast electorates a four-wheel-drive vehicle. They did it not because they thought it would be flash for members of parliament to drive four-wheel drives but because it was absolutely essential that those members had the type of car that would give them some protection.

I say to the Labor Party: if it was good enough for members of parliament to have this allowance for four-wheel drives over $57,000 then why isn’t it for doctors, nurses, stock and station agents, contractors and wheat harvesters, for example, who all use four-wheel drives to travel vast distances? Why are they excluded? Why are they excluded from a safety measure? Those people do not use these cars because they want to be flash or just to have a four-wheel-drive vehicle; they use them because there is no other way that they can safely travel such areas. So I cannot see why the Labor government, after making a declaration that some members of parliament needed four-wheel drives to get around their electorates, would exclude other people who need these four-wheel drives as much as those members of parliament?

There are so many people out there that do require these four-wheel drives for safety reasons—and we are going to exclude them with this bill. We are going to put a tax of 33 per cent on $57,000 cars. They are not flash cars, but once you have to add a bullbar and a few other extras to them they will come in at over $90,000. I just think it is essential that these people who live out in the western areas are not deprived of such vehicles. Their needs are as great as the farmers’; their needs are as great as the tourism industry’s.

For the life of me I cannot see why Senator Bob Brown cannot see that. I cannot see why he would persecute people in the western areas when he, in his amendments, has excluded Audis, Alfa Romeos, BMWs, Jaguars and Saabs. These are flash, expensive cars. They do not offer any protection for people who live in remote areas. How can the Greens, who are always appealing for pensioners and others who are in need, exclude Audis, Alfa Romeos, BMWs, Jaguars and Saabs? It sends out the absolute wrong message.

The Greens do not add the extra tax to those cars and yet you add a 33 per cent tax on the workhorse of Australia—the four-wheel-drives used by people such as the kangaroo shooters, Aboriginal communities and other people out west who must have these cars. I suspect the Flying Doctor would have four-wheel-drives—they certainly have four-wheel-drives but I wonder if they too pay taxes on them. These are the people you are picking up. These are the needy people that you should be helping, not the BMW, Audi and Alfa Romeo drivers. I never see them out there. In towns like Longreach or Roma or west of that, Audis and BMWs are probably there but I do not ever recall seeing them. But lined up in the streets are the Nissan Patrols and the Toyotas—car after car—and they do not all belong to farmers or graziers. They belong to the people who live there, whether it be the local hardware store owner, the local stock and station agent or the butcher. They have got to have those cars. Why are we discriminating against those people? Why are the Greens discrimination against Aborigines, the Flying Doctor and the councils—although I do not think the councils pay tax, but I am not sure of that? All those people use those cars.

There is another reason why this increased tax should not be applied to the cars priced around $57,000. We read in the paper, time and time again, how the car industry in Australia is battling. It is being hit by cheap imports flooding into Australia. It has got to the stage now that the car industry is very, very shaky. And now we are going to increase the tax on 11,000—or 10 to 12 per cent—of the cars that are made in Australia. That will make them less competitive, it will make them harder to sell and it will cost jobs, particularly in the car industry. While we are losing jobs in the Australian car industry, we are giving a tick to the Alfa Romeos, the Audis, the Jaguars and the BMWs.

The Greens are not noted for their support for the big end of town. They say that they represent the people from the small end of town. I ask Senator Brown why he is protecting the big end of town—the millionaires who have $300,000 cars—when the people who make the Australian cars are holding on by their fingernails.

We are debating the 11,000 Australian-made cars that are going to have an increased tax on them. And I do not know why Senator Milne, who is also a battler for the smaller person, would support the millionaires with the Audis and Alfas. They drive cars worth $300,000, and you are supporting them, Senator Milne. But you are not supporting the people who are making Australian cars, who are being hit very hard by imports. I fail to understand why this is the case.

The National Party, through Senator Williams, is going to move an amendment for cars over $90,000, which is about where the average Land Rover or Nissan Patrol, with a few add-ons, such as bull bars and things like that, is priced. We are not trying to protect multimillion dollar cars. We will vote against this legislation, but we are not trying to protect the cars that are very expensive. We are saying to the Senate, ‘For goodness sake, we have a problem with the car industry in Australia.’ We need an Australian car industry and the last thing we need is an increased tax on the Australian car industry, which employs so many workers in Adelaide and Victoria, with a flow-on effect to the accessory and parts manufacturers. This is crazy stuff. I do not know why the Labor Party would have done it. On one hand they try to do some social engineering on the car industry by giving grants to Toyota for a hybrid car and on the other hand they are trying to pull the rug out from under the car industry. They are giving with one hand and taking away with the other.

The result of that is that they are depriving rural and regional Australia of its workhorse. No-one seems to realise that. Through you, Mr Acting Deputy President, I would like to know by what rationale Senator Brown can reduce the tax on the millionaire type car but ping the battlers in rural and regional Australia. If he has any explanation, I would be very glad to hear it.

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Now?

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

You will have your chance after, Senator Brown. If you can turn that pig’s ear into a silk purse, I will be very surprised. If you cannot explain your way out of it, no-one can explain their way out of it.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Boswell, please address your remarks through the chair.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

I am being challenged, Mr Acting Deputy President.

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Baited.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

I am being baited and challenged. We all remember Senator George Campbell. He came down here breathing fire and brimstone—he was going to do everything. But he was not tough enough, as Senator Barnaby Joyce has said; he went soft. So they sent Senator Doug Cameron down, and wasn’t he going to play merry hell! Wasn’t he going to stir the Senate up! Wasn’t he going to come in here and protect the car workers! Well, he has been like a damp squib. He has not even raised his voice. I say to Senator Doug Cameron: the Senate will find you out. You cannot run; you cannot hide. In the end, the Senate finds you out—and it has not taken very long for the Senate to find Senator Doug Cameron out. I do not know whether he said anything in caucus; I do not know whether he stood up for the car industry, but he certainly has not stood up in this public place. He has been like a damp squib.

As Senator Joyce pointed out, Senator Cameron is on the Left. The Left do not get much of a say—they get a bit of a bone thrown at them on social issues, to do a bit of social engineering here and there. But the Right have command of all of the big issues. Senator Doug Cameron ought to think about either changing his faction or standing up in the Senate.

I cannot understand this. To me it is just a no-brainer. The government made a decision 10 or 12 years ago—probably 13 years ago—that four-wheel drives were essential for members of parliament. Every member of parliament with a big electorate drives one, because he has to, whether he be Labor, National Party or Liberal. So, if it is good enough for members of parliament, why isn’t it good enough for every other citizen? If we say members of parliament have to have four-wheel drives because it is dangerous without one and people are being killed, what is the difference? Why should we be a different class than the rest of the people who live out in rural and regional Australia?

If Senator Brown can explain to me why the Audis and the big end of town—the $300,000 cars—should have a reduced amount of sales tax and the workhorses should get pinged, I would be very interested to hear about it. I am sure the people in rural and regional Australia—and there are a few of them who vote out there; a few misguided teachers and so forth—

Bob Brown (Tasmania, Australian Greens) Share this | Link to this | Hansard source

This will put the taxes you’re defending into rural schools and hospitals. You’re not going to have the money for that.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

We will look after the rural schools and hospitals. Just let’s protect the people’s lives and their families’ lives and their kids’ lives when they are driving to school on these rough roads. You are depriving those people of safety and I find it very difficult to understand. I find it difficult to understand the Labor Party’s position on this social issue—or on the economic issue. This will destroy jobs in the car industry, which is doing it really tough at the moment.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

My colleagues have clearly explained why the Tax Laws Amendment (Luxury Car Tax) Bill 2008 should be thrown out. Senator Boswell has just very clearly argued all of the various reasons. So I will not repeat them. I am conscious that this is a budget bill and we want to get through the budget bills as quickly as possible. I am just going to make a very short contribution because, as I say, I know my colleagues have canvassed all of the issues.

I spoke when this bill was first before the chamber, on behalf of people in rural and regional Australia. I have just finished a 4,000-kilometre road trip through north-western Queensland, up in the Gulf Country, out to Mount Isa and back through all the country towns to Townsville.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

How many Audis did you see out there?

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Not many Audis; quite correct, Senator Boswell. I did see a hell of a lot of four-wheel drives. They are four-wheel drives with bull bars, spotlights and Shoo Roos. I should declare an interest: I drive a four-wheel drive with a bull bar, spotlights and a Shoo Roo which, I think, does not work.

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Better get it fixed.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I am not sure that they are as good as they are made out to be. But if you add the extras together, a fairly ordinary four-wheel drive can become expensive. The mums who drive their kids the 40 or 50 kilometres to the nearest school need all those sorts of things. Up in the north-west it gets pretty hot around summertime, and air conditioning is not a luxury; it is an essentiality—it is a necessity. But under the Labor Party’s envy legislation all of those things are said to constitute a luxury car.

There are amendments flying around. I am not sure that I quite understand them. I am not sure whether they apply to the non-farm four-wheel drive that, as I said, I see a lot of mothers driving their children in—not just down to the train station or to the school half a kilometre away, as the lucky people in the cities do, but the 30, 40 or 50 kilometres a day to school and then picking them up in the afternoon and coming home at dusk when the kangaroos are particularly bad. They are the sorts of people that will be impacted by this legislation. There are also the vets; the mechanics, who may have to drive 100 kilometres to get out to a farm to fix a tractor; the farming contractors; the shearers; and the helicopter pilots, so essential in the grazing industry these days, who have to get to their place of work in a four-wheel vehicle—not a luxury vehicle but a four-wheel drive vehicle.

Up where I come from tourism is an enormously important industry. It is a bit difficult at the moment—there are real problems—but a lot of people in that industry make their living out of what, under this legislation, are luxury cars: the sorts of vehicles that international tourists expect will pick them up in Cairns and drive them the 80 kilometres up to Port Douglas. Those cars are also used by those who do adventure tourism, an essential part of the tourism experience in northern Australia. They are the sorts of people that will be attacked by this legislation of envy by the Labor Party.

It is all done, as I understand it, in order to keep the budget in balance. For goodness sake, the Howard-Costello government left the incoming government a surplus of $22 billion. While the coalition, when it came into power, found that it had a $96 billion deficit to deal with, this government has inherited a $22 billion surplus. This legislation is supposed to maintain the surplus, but the surplus was already there. It was given to them through sound, wise economic management by Peter Costello, John Howard and Nick Minchin in days gone by. So the idea that this legislation, amended as it will be, will make much difference at all to the budget, defies any logic. What it will do is put extra burdens onto those people who live in the areas remote from the capital cities. I know if you live in Sydney, Melbourne, Brisbane or Adelaide you do not really see much of what happens outside. But when you get out into these areas, the four-wheel drive is an essential means of conveyance: it is essential for the safety of all people who live in remote areas of the bush.

In concluding, because I do not want to hold up this debate—it is a budget measure, and I do want us to move forward with it—I plead to all those senators sitting opposite and at the cross benches to spare a thought for people who live in remote Australia when dealing with legislation like this. This government—I do not think it is deliberate—does not have a lot of understanding or empathy with those who live in remote areas. I just ask all senators to consider that when thinking how they will vote on this legislation. I hope that, after considering those people, the impact on the industry and the little impact it will have on the overall budget surplus, others join with those on this side in voting this legislation down.

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I would like to support my colleagues on this side of the Senate in opposing the luxury car tax and make a few short contributions, because most of the arguments have been put very well, including by Senator Macdonald and Senator Boswell, the two previous speakers. I want to highlight the concerns I have, particularly for small businesspeople in and around Tasmania. This so-called luxury car tax will put up the tax and will put up the costs, which will make it harder for small businesses to operate and do well. We have some very rugged and rural parts in areas of Tasmania such as the central highlands, northern Midlands, west coast and east coast, where small businesspeople need four-wheel drive vehicles. I am thinking of the builders, tradesmen, electricians, plumbers, contractors and the like who operate in and around these rural and regional parts of Tasmania, and indeed in the cities and the towns of Tasmania. They are going to be under increased pressure as a result of this ridiculous proposal to increase the tax. You have the farmers and the farming communities who are going to be directly affected in an adverse way. Tourism has been mentioned. The tourism industry in Tasmania is particularly important not only in the capital cities but throughout the state. There is a whole range of people, and in particular small businesses, that are going to cop it in the neck.

Another contribution I wanted to make relates to the actual car dealers themselves who have not been referred to much during this debate. The Federal Chamber of Automotive Industries have put forward a lot of good information, including monthly figures on the number of vehicles sold in Australia and the like. The fact is that their members—and I am going to name the one that I know in Launceston, whom I have talked to about this: Bruce Stevenson Toyota—employ hard-working Launcestonians, hard-working Tasmanians. The tax will make it harder for them. It has ramifications across the board.

When this government wants to increase the tax, there are ramifications. As Senator Macdonald said, they have a $22 billion surplus. Why do they want to do it? Why do they want to increase this tax? As was noted in the Senate report put down just last week, this tax would also be inflationary. These are the concerns that I have. It is not about BMWs, Porsches, Audis and those sorts of vehicles; this luxury car tax will hurt—and I am going to name it—the Toyota LandCruiser, the best-selling so-called luxury car. Other targeted vehicles include the Mitsubishi Pajero; the Nissan Patrol; the Chrysler Voyager; the Toyota Tarago, which is a people mover; and the Volkswagen Multivan. Those are a few, and most are working vehicles; they are family vehicles and hardly the choice of transport for the idle rich, which is exactly what this government is trying to paint the opposition into accepting. We will not accept that.

The tax will cost jobs; it will put up prices; and with the unemployment rate rising it could not come at a worse time. That is my contribution. I do not for one minute accept the government’s proposition. I stand with my colleague senators on this side of the chamber to oppose it wholeheartedly.

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

I rise to speak on the Tax Laws Amendment (Luxury Car Tax) Bill 2008 and related bills. The government has agreed to Family First’s common-sense demands to exempt farmers and tourism operators from the increased car tax. Last fortnight Family First was concerned that the car tax would unfairly hit farmers and tourism operators. We have now been able to get that exemption for those people, and that makes a lot of sense. Family First has been able to successfully negotiate with the government, and the government has agreed to concessions worth $40 million over four years. Vehicles purchased by farmers and tourism operators are tools of trade. Some other businesses already get full exemptions for their vehicles from the car tax, so farmers and tourism operators should also not be slugged with the extra tax. They are already struggling with high petrol prices, the impact of the drought and the strong Australian dollar. Farmers and tourism operators can only claim depreciation and GST input tax credits up to the $57,180 car tax threshold. These tax breaks do not cover the extra tax.

The amendments negotiated with the government provide refunds to farmers and tourism operators so they can claim back the extra eight per cent car tax from the Australian Taxation Office once they have purchased their four-wheel-drive vehicle. The amendments allow claims of up to $3,000 per year for primary producers and $3,000 per year for tourism operators. The tourism industry is heavily dependent on the eight-seater Toyota LandCruiser and similar four-wheel-drive vehicles. The extra tax would have unfairly hit small tourism operators in regional Australia as they need their four-wheel-drive vehicles. Farmers are also dependent on heavy-duty four-wheel-drive vehicles, like the LandCruiser, which offer reliability and safety in regional and remote areas, especially on poorly maintained roads. Family First has had a lot of emails and phone calls from farmers and tourism operators to support this initiative. The Australian Tourism Export Council pointed out:

... that the tourism industry basically runs on the eight-seater diesel LandCruiser.

The council also said:

The cost impact is hitting a range of small businesses in regional Australia such as four-wheel-drive tour operators in rural Australia.

The majority of tourism businesses in Australia are small family operated concerns. One regional tour operator made a special trip to my office in Melbourne a couple of weeks ago to tell my staff how important his four-wheel-drive was to his business. He does outback tourism and he said that he needs a reliable car to make sure he does not break down in the middle of nowhere; it is essential as a tool for his work. Another regional tour operator wrote to me saying how important his four-wheel-drive is to his business. He said:

We have exceptional working relationships with all the property owners, in South Australia, who have 4WD tracks on their properties. They have taken the decision to encourage tourism based on the drought and continuing poor returns from what was once their core business, farming.

All of us also tend to travel at least twice the average 14000 kms that city folk do and most of that is on dirt roads and/or over quite long distances.

The Victorian Farmers Federation President, Simon Ramsay, supports the amendments as common sense. He said:

... our industry there is a dependence on transport and obviously given the localities and isolated areas not only within the state of Victoria, but nationwide, is dependent on large robust vehicles …

In Queensland AgForce Chief Executive, Brett de Hyer, said that four-wheel-drives are not a luxury item for farmers. He said:

Many farmers in Queensland (particularly in far western and northern areas) regularly travel hundreds of kilometres to their nearest town for essential supplies, health care and children’s schooling, and they need a vehicle that can handle those conditions—it is a necessity, not a luxury.

The South Australian Farmers Federation has also given its endorsement, with spokesman Peter White saying that he is happy with the changes ‘now that farmers are being looked after’. Last Wednesday I had an email from a farmer in Western Australia who said:

We are one of those farmers you were talking about. Farming in almost any area of the country is under siege. Right from the central midlands of Tasmania to here in the wheatbelt of WA markets, price squeeze, inputs, no infrastructure all take their toll. We do need a 4WD just for safe driving out here.

They are an essential item in our toolkit both on the farm to get about and to drive the vast distances we need to, to do any tasks at all.

Family First is not here to frustrate the government of the day, whether it is this one or the previous one. We are not elected to government but we are elected to vote and to look at issues on their merits. We have put forward constructive concerns to the government to take care of unintended consequences—I do not think they have ever set out to hit farmers and tourism operators—and that is what we have done. I urge all senators to back Family First’s amendments.

Question put:

That these bills be now read a second time.