Monday, 21 June 2021
COAG Reform Fund Amendment (No Electric Vehicle Taxes) Bill 2020; Second Reading
I'm really pleased to be rising today to speak to my COAG Reform Fund Amendment (No Electric Vehicle Taxes) Bill 2020, which aims to neutralise the impact of discriminatory taxes against electric vehicles, such as the one that has just been introduced by the Victorian government and which has been described as the worst electric vehicle policy in the world. Hopefully, if passed through the Senate, this bill will warn off other states and territories thinking about going along the same misguided route. We need to be supporting electric vehicles, and in this place we need to be doing everything we can. The government has been missing in action, so it's up to us to be doing what we can to support electric vehicles and to support state and territory governments in encouraging the uptake of electric vehicles.
I went for a drive in an electric vehicle this morning with Daniel Bleakley. Daniel's an electric vehicle campaigner. He took me out for a ride in his Tesla. Daniel is famous for taking his Tesla to different places—he's been driving around the country—and letting people get behind the wheel of his Tesla. I understand Senator Patrick will be taking a drive with him tomorrow. It's a very practical demonstration of how great electric vehicles can be and exactly what our government, the Liberals and the National Party, are holding us back from. I'm not a revhead. My approach to cars is they are vehicles that get you from A to B. I enjoyed my ride this morning. It was a very nice car to drive, and it has a lot of oomph when you put your foot down. But the reason Daniel Bleakley and I are equally passionate advocates for electric vehicles is that shifting our private passenger transport to zero carbon vehicles as quickly as possible is incredibly important.
Daniel grew up in coal country, in Queensland. In fact, some members of his family are still very big advocates of the coal industry. So he knows the reality of the fossil fuel industry in Australia. But he learnt about the climate crisis, and he decided that he needed to do something practical and be part of the shift to a zero carbon society as soon as possible so that we can get out of mining coal and gas and oil and Australia can be playing its part, its role, in shifting the world to a pollution-free safe climate future. He's very aware of what the issues are, what the challenges are and how we need to be supporting Australians, ordinary working Australians, in the transition. That's the beauty of electric vehicles; they enable us to do that.
In our conversation this morning as we were driving around, Daniel shared a couple of things with me. One ongoing issue people seem to have with electric vehicles is range anxiety—'I couldn't possibly drive an electric vehicle because I've got to drive long distances.' In fact, he mentioned that this is an excuse that Angus Taylor, the minister for energy, has recently trotted out as to why he couldn't possibly have an electric vehicle. He told me the minister's office is 300 metres from an electric vehicle charger and that, with the current chargers, you can get a charge of your vehicle for 400 kilometres in about 20 minutes. So range anxiety is basically: how far can you go in an electric vehicle before you need to charge? How long is your bladder going to last out? You have to stop for a wee, and 20 minutes later your car can be charged up with 400 kilometres ready to go.
The other thing we talked about this morning was how much having a rollout of electric vehicles is going to improve the health of our cities. So much of the pollution in our cities comes from petrol and particularly diesel. There is no safe level limit for diesel pollution. Every diesel particulate is carcinogenic; it causes cancer. If we shift to electric vehicles and get that transition happening, we are going to have massive improvements in the health of our cities. In fact, Daniel told me about how the air quality in Oslo, with its uptake of electric vehicles, has improved dramatically over the last 10 years.
So, look, it would be really good if I didn't have to be introducing this bill today. It would be really good if we had a federal government that was actually showing some leadership and recognising that electric vehicles are so critical that we need to be taking every action we possibly can to incentivise their uptake. This government, by failing to take a leadership role, is what's leading the states and territories governments to decide they have to go out on their own. However, we know that the approach that the Victorian government is taking has been described as the worst electric vehicle policy in the world. We know it's going to stymie the uptake of electric vehicles by putting a discriminatory tax on electric vehicles.
The argument of the proponents of such a tax is that the electric vehicle owners are not paying excise; therefore, they should be paying the extra road user charge to make up for that. I want to tell people just to look at the amount electric vehicle owners are already paying. At the moment, out of the goodness of their hearts, because they want to be part of the shift to zero-carbon transport, they are paying on average an extra $20,000 to $30,000 for their electric vehicle compared to the equivalent internal combustion vehicle. By doing that, by paying that extra $20,000 to $30,000, they are paying more in stamp duty and GST, and that adds up to about the equivalent of five years of fuel excise. So they are already more than paying their way—five years worth of paying their way. Come back to me in five years time, when electric vehicles are actually up to around the 20 or 30 per cent mark, and then let's have a conversation about road user charges to replace fuel excise.
Let's start planning that uptake now. Let's do the work. Let's work out what is an appropriate regime of road user charging that's going to be fair, equitable and sustainable and will encourage the type of transport that we want to be encouraging and not discourage people from using public transport. Absolutely let's have that discussion and work out what is the road user charge that, I agree, is probably going to be introduced in the future. But let's do it properly. Let's not impose discriminatory charges as the Victorian government is doing.
We need to do everything we can here at a federal level to stop the states and territories from imposing those charges. My bill basically neutralises the revenue that would be raised by these discriminatory taxes. It would mean that every dollar that is raised by, for example, the Victorian government would be a dollar that that state wouldn't get from the federal government in the grants to the states and territories and that every dollar the Victorian government didn't get we would redistribute to other states and territories. It's the carrot-and-stick approach—a stick to the Victorian government and other governments that are doing the same thing, and a carrot of extra money to the states and territories to encourage them to take action, to encourage them to put money into the rollout of fast chargers. That's the nub of this bill.
The other thing I really want to talk about today is: why does it matter that we shift our fleet of passenger vehicles to zero-carbon-polluting electric vehicles as quickly as possible, side by side with changing our energy generation to be 100 per cent renewable? It matters because transport is now almost 20 per cent of Australia's carbon pollution and it's the fastest-growing area of pollution in Australian society and the Australian economy. This matters because Australia needs to be playing its part in tackling the climate crisis. Not only is this government failing us on the shift to electric vehicles; we know that it is totally failing us on doing anything else with shifting our society, shifting our economy, to a zero-carbon future. This matters because we are in a climate crisis. We are facing a future where global average temperatures are going to be three, four and even more degrees above what is safe for humanity and the rest of life on this planet.
I just want to remind people what this means. If we reach a future where we are three or four degrees higher than preindustrial temperatures, it will mean no more growing wheat in Australia—or pretty much anything else in the areas that are currently our major agricultural production zones. It will mean metres of sea level rise, flooding cities and towns where millions of Australians currently live. I find it hard to believe, but it will mean wildfires that are even more extreme, hotter and more frequent, over a longer fire season than we had in 2019-20. So it will mean thousands of properties being destroyed. It will mean, undoubtedly, many, many Australians dying, whether it's from the fires or from the heat. It will mean uncountable numbers of plants and animals across the world going extinct. It will mean billions of people around the world who will be climate refugees, homeless, without a way to feed themselves and looking to find anywhere on the planet where they can possibly survive. And it will mean billions of people living absolutely wretched lives, struggling to survive. It sounds really, really, really bad.
This is what the science is telling us. This is not over the top. This is not extremism. This is what the science is telling us. This is what we need to listen to. This is why we need to take urgent action to reduce our carbon pollution to zero as quickly as possible. There is no time left for delay or for half-measures. Other countries around the world have accepted the challenge. We've just had the G7. Let me remind you what the G7 agreed to, just over a week ago. They agreed that they would halve their collective carbon pollution from 2005 levels by 2030. That's in nine years time. They agreed that they would end fossil fuel subsidies by 2025 and they would achieve overwhelmingly decarbonised power systems in the 2030s. Australia needs to be up to the challenge as well.
The thing with electric vehicles is that they are a technology that we know we can literally be rolling out on the roads today. Other countries are doing it. In the UK they have got a commitment to have a ban on sales of polluting internal combustion engine vehicles by 2030. Similarly, 20 per cent of Norway's fleet is now electric vehicles. Seventy-five per cent of all new sales are electric. This is being rolled out around the world. Australia could be part of this electric vehicle revolution. But no. We are laggards. We have less than one per cent of our fleet being electric vehicles. We're being left behind, and we're being left behind in the opportunities for workers, for industry, for growth in manufacturing of electric vehicles or components or batteries.
Internal combustion engine vehicles have no place in a future where we need to be shifting to zero carbon as quickly as possible. Shifting to electric vehicles is a practical, easy response to address a huge part of our carbon transport pollution. It should not be about party politics. As I said, I've just quoted what the UK government are doing. They are a conservative government, led by Boris Johnson. The Norwegian government is a conservative government. We could be doing the same here. This should not be an issue of party politics. It's a matter of common sense. It's a matter of our common humanity. It's a matter of us working together to do what we can to create a safe future or us and our children.
Another example of why it's not an issue of party politics is an announcement over the weekend by the New South Wales government—a Liberal government—of a major new electric vehicle policy. I will come to the detail in a minute, but this highlights the devastating inaction and refusal to act that we've seen from the Commonwealth Liberal government. The New South Wales government have proposed subsidies of $3,000 for 25,000 new cars, waiving stamp duty for new and second-hand electric vehicles, $171 million in charging infrastructure, and access to priority lanes for EV drivers. In particular, on the issue of a road user charge, they have said, 'When the number of electric vehicles gets to 30 per cent, or in six years time, we will consider it.' This is exactly the way forward, and it should be coordinated at a federal level.
It's crazy to have a different system of road user charges right around the country. Nobody wants to see that. We need federal leadership, and we need support from the Labor Party as well. We need both the Labor Party and the Liberal Party to put their money where their mouth is. If they say they're concerned about carbon pollution, do something about it. I'm not sure whether the Labor Party are in support of this bill, but I urge them to be so. It's an opportunity to put your votes where your values are. If you say you want action on climate, here is an opportunity to do something about it, to act to reduce our carbon pollution and create a safe future for us all.
It's my pleasure to rise and speak on the COAG Reform Fund Amendment (No Electric Vehicle Taxes) Bill 2020. I say 'it's my pleasure'; this is a bill that the government does not support, because we consider it to be piecemeal and not in the national interest. I'm really disappointed that Senator Rice didn't mention any of the very substantial incentives announced by the New South Wales government just yesterday in relation to electric vehicles. Some $490 million has been committed in the 2021-22 New South Wales budget in relation to cutting taxes, incentivising uptake and reducing barriers for electric vehicle purchases. These include a stamp duty waiver, rebates of $3,000 to be offered on private purchases of the first 25,000 eligible electric vehicles, $171 million for new charging infrastructure across the state and $33 million to help transition the New South Wales government passenger fleet to electric vehicles where feasible. So we're seeing some very good action in some states.
Very importantly, the New South Wales government and the South Australian government have deferred any road user charge because the Liberal governments in New South Wales and South Australia recognise that it is important to have a nationally consistent approach where there is proper consultation across the board. It is a shame that the Andrews Labor government has gone ahead with this tax—yet one more tax from the Andrews Labor government. On that point, the Greens and the Morrison government are in unison. We do not agree with the huge array of additional taxes being imposed by the Andrews Labor government. I note the significant difference between the New South Wales and South Australian governments with respect to a road user charge for electric vehicles, and, disappointingly, the Victorian government, which is persisting with this tax, which, frankly, is not an incentive to drive the uptake of electric vehicles in Victoria.
I want to reiterate that this government is committed to lowering emissions and protecting our economy, jobs and investment. Despite the many attempts by the Greens and Labor to mischaracterise the efforts of our government in the many different initiatives that we are delivering to drive down emissions to invest in our environment and, at the same time, protect jobs and the strength of our economy, this government has a very strong record in meeting and beating emissions reduction targets without sacrificing the health of our economy. In contrast to the Morrison government, we know that Labor is bitterly divided on its energy and climate policies—bitterly, bitterly divided. They are a complete and utter mess. The blue-collar workers, the coalmine workers and all other workers in the oil and gas industries in this country know that they do not have many friends in the Labor Party. Their friends are in the Morrison Liberal-National government. We understand the importance of oil and gas to this economy.
The key to this success has been the fact that our emissions reduction plan is driven by technology, not by taxes. It's one thing to have these lofty ideals—the rubbish that Mr Shorten took to the last election—the 50 per cent renewable energy target and the 45 per cent emissions reduction target, which said to every worker working in coalmines, in oil and gas, and in construction and building sites that Labor had deserted these workers. Mr Fitzgibbon has it right: he's worked you mob out. That's why Labor is such a mess when it comes to its energy and climate policies.
Proudly, Australia is only one of a handful of countries that has beaten our Kyoto commitments. We didn't just beat them; we beat them by a very substantial 459 million tonnes. Our emissions have fallen faster than the G20 average, faster than the OECD average and much faster than similar developed countries, like Canada and New Zealand. Between 2005 and 2019, they fell by more than 15 per cent, while New Zealand's fell by only four per cent and Canada's barely moved at all. In contrast, our emissions fell by more than 15 per cent. The latest figures for 2020 have us at 20.1 per cent below 2005 levels. We are well on our way to meeting and beating our 2030 target, which is to reduce emissions by 26 to 28 per cent below 2005 levels. As the Prime Minister said, our target is net zero emissions as soon as possible, and preferably by 2050. This is realistic and sensible. Net zero emissions is a worthy goal but it is not one that ought to be pursued at all costs. We will not sacrifice jobs, we will not sacrifice industries in regional Australia for no benefit and we won't increase taxes with no thought to the effect on families and businesses. (Quorum formed) I'm sorry that Senator Ciccone saw fit to interrupt my contribution. I think that Labor senators are imposing a bit of disruption on the chamber. Nevertheless, I will continue.
As I was saying, technology, not taxes, is the way to go. Australians are practical people, and this is no more apparent than in the context of technological adoption and adaptation. Australia's experience has always been that, when new technologies become economically viable, businesses and households rush to adopt them. We can see this happening right now with the adoption of renewables in Australia at 10 times the global average under the Morrison government. It is four times higher than in Japan, the US and Europe. We now have the highest solar capacity per person in the world. What an achievement!
That's why we have developed our technology investment road map. It is a comprehensive plan to invest in the technologies that we need to continue to bring emissions down here and around the world. It's driven by the most incredible investment in renewables happening here, on the watch of Prime Minister Morrison and under the leadership of the Morrison Liberal-National government. Our investment is accelerating technologies like hydrogen, carbon capture and storage, soil carbon measurement, low-carbon materials like steel and aluminium, and long-duration energy storage. Getting these technologies right will support 160,000 new jobs by 2030 and maintain Australia's position as a world-leading exporter of food, fibre, minerals and energy. Widespread global deployment of those technologies will reduce emissions or eliminate them in sectors that are responsible for 90 per cent of the world's emission—some 45 billion tonnes. This is about setting practical goals for the technologies that offer the most abatement potential where Australia has real advantage.
The government is also driving investment into consumer choice when it comes to new vehicle and fuel technologies. We have already committed around $1.4 billion to help increase the uptake of low- and zero-emissions vehicle technologies, including over $74 million through the Morrison government's Future Fuels package. This is proactive investment in future fuels, in future technologies for vehicles in this country. The Future Fuels Fund is the centrepiece. It will enable businesses to start integrating new vehicle technologies into their fleets and address blackspots in public charging or refuelling infrastructure. We're developing a Future Fuel strategy that considers all of these new technologies, not just in relation to electric vehicles. This includes hydrogen fuel cell vehicles, hybrids and biofuels to support fuel consumer choice. We've released a discussion paper for consultation to help inform our final strategy and shape the design and rollout of our investment programs. The strategy will be finalised later this year, once this feedback process is complete.
Australians are already making the choice to switch to new technologies such as hybrids. Hybrid sales have almost doubled in the last year. Hybrids have immediate emissions reduction benefits, even over battery electric vehicles, across many parts of Australia. In contrast to the Morrison government's integrated national plan, this bill from the Greens is, as I mentioned before, a piecemeal measure that would do little to provide the taxpayer with value for money. To bridge the gap over the 10-year lifespan of an electric vehicle purchased today would cost an estimated $195 to $747 per tonne of carbon dioxide equivalent. To put that into some perspective, the Emissions Reduction Fund price is $16 per tonne.
This bill, if it were ever to be implemented, would add yet another set of rules to an already dizzying number of local and state regulations that add nothing to what is incredibly important in this sector, and that is national consistency. We do not need more piecemeal regulations across different states and territories. Regrettably, this bill does not facilitate a nationally coordinated strategy for electric vehicles. It does not solve any problems that are not already being solved by the government's Future Fuels package and the Future Fuels Fund. It creates more red tape for local and state governments and delivers no value for Australian taxpayers. With this bill, the Greens rush without pausing to consider some of these bigger issues at a national-interest level. Unfortunately the Greens have not considered the better alternatives, including I think a lost opportunity to provide for a nationally coordinated strategy. This is very much legislation on the fly. It may be good enough for the Greens, but it's certainly not good enough for this government, and it's certainly not good enough for Australian taxpayers. When it comes to effective emissions reduction legislation, driven by incredible investment in renewable technologies in this country, we need the Morrison government's nationally coordinated scheme, not the piecemeal approach of the Greens. For these reasons, I do not commend this bill to the Senate.
I seek to make some comments about the COAG Reform Fund Amendment (No Electric Vehicle Taxes) Bill 2020. We know that Australians will need to transition to cleaner forms of transportation if we are to make meaningful reductions in our carbon emissions and avert the worst effects of climate change. Transport emissions make up 18 per cent of Australia's total greenhouse gas emissions. This makes transport the third-largest sector by emissions, and it is also the fastest growing source of emissions. Although transport emissions dropped during COVID, they have rebounded quickly as movement restrictions have eased. Based on the latest figures, passenger motor vehicle emissions make up 55 per cent of road transport emissions and eight per cent of total Australian emissions. Australia needs to change this. In the first instance, this means prioritising active transport, like walking and cycling—something I know you're very interested in, Mr Acting Deputy President Sterle—and, where possible, making the collective investment needed for mass public transport to be a realistic option for Australians who are travelling to work, school or the shops. But cleaner, low-emissions private vehicles will also have to be part of the solution.
Unfortunately, Australia lags the world in the take-up of electric vehicles. In 2020, there were almost a million cars sold in Australia, and just 6,900 of them were electric. That's a market penetration of barely 0.7 per cent, compared with the global average of a little over four per cent. Take-up is more than six per cent in China, around 11 per cent in the UK and the EU, and almost 75 per cent in Norway, which is the world leader. The problem isn't just that we have a low rate of EV use in Australia; it's also that there's barely any growth. Electric vehicles tripled their market share in the EU and the UK from 2019 to 2020. In Australia, 6,700 were sold in 2019 and 9,900 were sold in 2020—a growth rate of less than three per cent. As a result, there are just 20,000 registered electric vehicles on Australian roads. This isn't because Australians don't want to drive electric vehicles. Surveys show that the majority of Australians would consider buying an electric vehicle as their next car. So what's the problem? Fifty per cent of those same poll respondents say that the purchase cost of an electric vehicle is one of the main reasons stopping them from purchasing one. There are no cheap electric vehicles for sale in Australia. Precisely zero new models are sold for less than $40,000, and there are just five models available for less than $60,000. In the United Kingdom, by contrast, there are 26 models in that price range. This of course is the government's fault. What has gone wrong?
The truth is that one of the greatest impediments to the widespread take-up of electric cars in this country has been the coalition government. They have done absolutely nothing to develop local manufacturing capacity. In fact, they gutted it years ago, as we saw with Holden and Toyota, in what was a very disgraceful period in Australia's history. The government cut financial support and dared Australia's last remaining automotive manufacturers to leave the country. The consequences of that decision didn't end with Holden. They ricocheted through the automotive supply chains from Adelaide to Melbourne. They were the death of countless small and medium manufacturing and industrial firms, and they ended the working lives of thousands of hardworking Australians, particularly in my home state, who had jobs they enjoyed and were proud of. And that was for petrol vehicles. The government's record on electric vehicles is much worse. Just last year, Renault pulled its Zoe EV model from Australia, citing a lack of government support. There is a lot that could have been done to encourage electric vehicles, such as providing subsidies for the development of charging stations, making it easier to import EVs and adjusting policy settings to support their take-up and use. We could even look at manufacturing subcomponents onshore.
Currently, Australia produces nine of the 10 minerals required for the lithium iron batteries, but largely sends these overseas as raw materials. We have a competitive advantage to value-add to these resources and create processing and manufacturing jobs for EV components, especially batteries. But it's hard to do that when we have barely any electric vehicles on the road.
The government could have provided support and incentives for local manufacturing capacity. The government has instead done next to nothing. This is because this government is paralysed on climate change. After eight years of government, they still don't have an energy policy. We are waiting on the outcome of yet another leadership challenge in the Nationals. I think at this point we do know that Mr Barnaby Joyce has been elected as the new leader of the National Party and therefore, under the conventions, again will become the Deputy Prime Minister of Australia. This government is uninterested in climate change as an issue unless it can weaponise it as part of a culture war. Let's not forget that it was the government who ran a scare campaign last election threatening that the introduction of electric vehicles would end the weekend, a claim that was as shameless as it was untrue. The tragedy is that Labor's energy policy prioritised Australia's future energy needs and would have seen our government investing in renewables and storage, creating new industries and new jobs whilst lowering power bills for Australian families.
In the same way, a government which was serious about reducing Australia's transport emissions would support the uptake of electric vehicles that are cheaper for families to run over the long term. That is why Labor has committed to developing Australia's first national electric vehicle strategy. Labor will cut taxes on non-luxury electric vehicles, including import taxes and fringe benefits tax, to give people a choice and ensure that more Australians who want electric cars can afford them. Labor will cut government taxes on non-luxury electric vehicles, including import taxes to give Australians a choice. By reducing upfront costs, Labor's electric car discount will encourage uptake, cutting fuel and transport costs for households and reducing emissions at the same time. Labor's electric car discount will encourage carmakers to supply more affordable electric vehicles to Australia, which will in turn increase competition, drive down prices and give consumers more choice. Labor will pursue policy settings to encourage Australian manufacturing of EV components and consider leveraging existing Commonwealth investments in its fleet and infrastructure spend to increase electric vehicle stock.
Unfortunately, unlike Labor's policy proposals, this bill will not make a meaningful impact on electric vehicle take-up by ordinary Australians. This bill seeks to disincentivise taxes or charges on the purchase and use of electric vehicles by states and territories. While this may seem like a good idea given all I've just said about the electric vehicle market in Australia, the truth is far more complicated. Australian jurisdictions developed mechanisms for funding the construction and maintenance of roads and other infrastructure which assume that most private vehicles are fuelled by petrol. As Australians transition away from petrol vehicles to electric vehicles, taxes like fuel excise will deliver less. Governments will need to transition towards new models of funding road infrastructure, and it's likely that some of these models will include a capacity to recognise the impact of electric vehicles, like all vehicles, on our roads, bridges and tunnels. That's not necessarily a bad thing. Our aim should be to ensure that our policy settings as a whole support the use of electric vehicles, not that use of electric vehicles should be for all intents and purposes free.
This bill is a blunt instrument. The measures in the bill would adjust the formula for allocating GST revenue between states and territories to neutralise the effect of any tax, levy or charge imposed on electric vehicles but not on other vehicles. Where a state or territory sought to impose such a tax, the benefit of that would be neutralised through a reduction in the proportion of GST revenue they would receive. This would be redirected to other states in the normal manner. COVID-19 has seen a significant decline in GST revenues for the states at the same time there has been increased demand for critical services, especially in the health sector. The distribution of GST revenue is generally set by the independent Commonwealth Grants Commission. Adjustments to the GST formula are very rarely made, and particularly not to penalise states for using their potential heads of revenue. Changes to the GST formula need careful consideration and consultation. Australia needs to support our electric vehicle market. Unfortunately, this bill isn't the way to do that. What we need is what the Morrison government and its predecessors have failed to do—a real and comprehensive plan to lower the cost of vehicles, encourage a greater range of models to be imported, build the infrastructure needed to support them and grow Australia's local manufacturing capability. That's why Labor is proud to stand behind our electric vehicles policy.