Tuesday, 5 December 2017
Taxation, Automotive Industry
That the Senate—
(a) notes that 2 December 2017 marked one year since the South Australian Treasurer, the Honourable Tom Koutsantonis, MP, called for the abolition of tariffs "such as the luxury car tax" on imported motor vehicles, and also stating he would immediately take that cause to the Coalition of Australian Governments meeting in Canberra;
(b) agrees with the South Australian Treasurer's statement in his media release on that day that there is no longer an Australian automotive manufacturing industry to protect with these measures;
(c) observes that abolition of remaining tariffs on motor vehicles and the luxury car tax would, combined, save Australian car buyers $1 billion per annum; and
(d) calls upon the Government to announce its plans for these tariffs in the Mid-Year Budget Review, if not before.
Senator Bernardi's motion relies on two false assumptions—firstly, that there is no longer an automotive manufacturing industry in Australia and, secondly, that the luxury car tax is a protectionist measure. Unfortunately, Senator Bernardi has not been paying attention. There are still tens of thousands of Australians employed in the automotive industry. While this number will reduce, it does not mean that the industry is, in itself, coming to an end. Moreover, many more component manufacturers than expected have made the transition to global supply chains. More importantly, the former motor vehicle OEMs and component makers are continuing research and development activities in Australia. They are maintaining proving grounds and design and engineering centres here.
Just today I met with Bosch Australia. Their recent investment in automotive R&D means they will employ an additional 30 people in their vehicle safety engineering team. This is not a measure that requires the public to support the discretionary funding— (Time expired)
The luxury car tax was introduced as part of the GST reform package in 2000. Prior to the introduction of the GST, luxury cars had been subject to a wholesale sales tax of 45 per cent. The purpose of the luxury car tax was to ensure that, when the 10 per cent GST was introduced, the price of luxury cars did not fall disproportionately more than the price of standard vehicles. There is no connection between the luxury car tax and protection of domestic car production. The luxury car tax applies to all cars purchased in Australia above the relevant thresholds, regardless of the place of manufacture.
The question is that motion No. 637, standing in the name of Senator Bernardi, be agreed to.
Senator Gallagher did not vote, to compensate for the vacancy caused by the resignation of Senator Parry.
Senator Polley did not vote, to compensate for the vacancy caused by the resignation of Senator Nash.
Senator Williams did not vote, to compensate for the vacancy caused by the resignation of Senator Kakoschke-Moore.