Senate debates

Thursday, 24 November 2022


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

5:30 pm

Photo of Perin DaveyPerin Davey (NSW, National Party, Shadow Minister for Water) Share this | | Hansard source

I was saying earlier that I can't support the Treasury Laws Amendment (Electric Car Discount) Bill 2022 because it is again the Albanese government rejecting rural and regional Australia. I was talking about what we did in government and our future fuels and vehicles strategy. We also committed $2.1 billion to help increase the uptake of low- and zero-emission vehicle technologies, and market movements were happening.

There is an uptake of electric vehicles, and the range and choice of suitable cars is widening. Tomorrow, thanks to Senator David Pocock, I am going to trial an electric ute, which will be an experience, indeed, because one of the things I hear from where I live is there are just no commercially available electric utes or decent farm vehicles yet. Given that, and given technology is advancing, the market is actually determining it. Why is the government deciding it needs to interfere in the market? For what purpose?

The independent Parliamentary Budget Office have reported that this bill will cost billions of dollars through the next decade. To back up that conclusion, Treasury is not even able to articulate the long-term costs of the measure. It's billions of dollars in unnecessarily forgone revenue, helping the elite, when we face massive infrastructure rebuilds because of the floods that have gone on now, with massive ongoing and extensive natural disaster repairs to our roads network. These electric vehicles will contribute nothing to general revenue because they don't pay fuel excise. It's billions of dollars in lost revenue which could have alternatively been put towards hospitals, more regional doctors, more regional teachers and more support for small businesses—but, no. The government are trying to convince Australians that they are strong, fiscal managers. This bill shows they are not. This bill is a typical example of the government's usual modus operandi, their grab for votes, irrespective of the benefits or the consequences of their too-little-thought-through policies.

It's not just the independent Parliamentary Budget Office that thought it an unsound idea. Despite being called 'tax reform' by the Treasurer, the Senate inquiry held into this legislation showed it to be high-cost, low-impact and designed with no consultation with industry, government or civil society. A number of experts have actually raised serious questions about the equity, fiscal sustainability and price pressures this will place on the EV market. Professor Miranda Stewart, director of the Tax Group at the University of Melbourne Law School and fellow at the Tax and Transfer Policy Institute at the Crawford School of Public Policy, is quoted as saying the policy will deliver subsidy to 'a rather narrow class of employee beneficiaries and provides the largest benefit to the highest income earners'. Guess what? They don't live in regional Australia.

The bill does not line up with the government's sensible economic policy and fiscal repair promises that they had prior to the election. The Treasurer said in June:

… Government must make the hard decisions necessary for responsible budget repair.

…   …   …

… making sure that spending is about building value, not buying votes.

Why are we buying votes through subsidising electric vehicles for those who can already afford them, those who are getting a salary-sacrifice benefit? The government can't say what this bill will actually do for emissions reduction, as I said earlier. If you plug your car in overnight to recharge, chances are you are plugged into the grid and you're burning coal. They can't say what this bill will do to the EV market and they can't even say how they would assess whether it is a success or not.

The best thing the government could do is scrap this bill, take the revenue that they would achieve through the ongoing fringe benefit tax and invest in practical measures that would actually drive investment into EV infrastructure, which would by its own measure lead to market change, lead to behavioural change and see more people take up the opportunity to drive electronic vehicles. As I said at the outset, on this side we're not anti electronic vehicles, we are not anti electric and we're not anti low or zero emissions transport, but we are pro investing into how to make it possible and not just delivering a benefit to those who actually don't need it.

Market pressures and technology advances are and will continue driving wider uptake of electric vehicles. We will soon see the day when we do get the long-distance trucks, cars, utes, farm vehicles and indeed even electric vehicles capable of towing trailers and caravans, as Senator O'Sullivan talked about in his earlier speech, and we will see vehicles that will be able to travel the hundreds of kilometres that I indeed do just to get to work here in Canberra before needing to recharge. But that is where we are moving to. Making current electric vehicles cheaper for a narrow, privileged few will not make that happen, so I cannot support this bill.

5:37 pm

Photo of Malcolm RobertsMalcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

As a servant to the people of Queensland and Australia I speak to the Treasury Laws Amendment (Electric Car Discount) Bill 2022. The history of climate change and related energy bills is replete with terrible governance, shoddy governance, deceitful governance. There have been genuine errors made, there have been decisions taken on greed and self-interest, contradicting the science, and now we have inappropriate market manipulation from a cynical, meddling government. This bill is designed to force the uptake of electric vehicles. What hubris, what deceit—and who pays? As always, the people are paying.

How can the Albanese government ignore the critical shortage of minerals essential to producing this many electric vehicles? Lithium has been a global arms race fought between electric vehicles and Labor's other loves: batteries, solar panels and wind turbines. There's not enough lithium on earth for one of these follies, let alone all four. Stuart Crow, chair of Lake Resources, said:

There simply isn't going to be enough lithium on the face of the planet, regardless of who expands and who delivers, it just won't be there.

So what's the government's plan to handle the lithium shortage in the electronics industry as net zero sucks up supply of cobalt, lithium and copper? Demand inflation will force these resources up in price over the next few years. How's the government going to explain to citizens why their phones, laptops and household goods have been made unaffordable from so-called sustainable, green technologies? By the way, have you noticed how United Nations World Economic Forum sustainability programs can exist only with subsidies, meaning they're not sustainable?

Back to the point, the engineering boundaries are real, and wishy-washy responses about finding new solutions don't work when the best solution, lithium, is being wasted on the vanity of net zero. Labor's much-hyped goal of net zero for 2050 will run out of charge between 2025 and 2030, when lithium supplies are predicted to dry up.

This shortage is already manifested in mineral prices. In 2020 lithium was $6,000 per tonne. Today, what is it? I'll tell you: it's sitting around $78,000 per time, 13 times higher. Everything this precious resource is being wasted on will be sitting in landfill before 2050. I say it again: everything this precious resource is being wasted on will be sitting in landfill, buried before 2050. Every wind turbine, every solar panel, every big battery, every home battery—all of it rotting while the earth and its oceans are torn apart to feed the monstrous dream of net zero through the strip mining of the seabed for rare earth minerals that are necessary for the production of these follies.

Even electric vehicle manufacturers admit to being in trouble. The World Economic Forum, whose policies seem to find their way into Australian legislation, thinks we need five billion electric vehicles to achieve net zero. That's not five billion through to 2050; that is five billion every five to 10 years for ever. No wonder you're looking startled; this is news to most people in this room. The reason electric vehicles are so damn expensive is that, in manufacturing electric vehicles, they are resource and energy hogs. They are resource guzzlers with a huge environmental footprint, far greater than petrol and diesel cars. These price hikes, which have already started, are set to push almost all purely electric vehicles beyond the luxury car threshold required to qualify for Labor's amendment to the Fringe Benefits Tax Assessment Act.

After the amendment moved by the Greens and Senator Pocock goes through, in 2025 hybrids will no longer be included in the bill. Price inflation will ensure not much else will be either. When President Biden gave a $7,000 subsidy, the first thing that happened? Car manufacturers put up their prices by $7,000. Subsidies make things dearer, not cheaper. They shift the price label but not the affordability. Perhaps some cheaper EVs that are made in China and that may or may not still be working in 2030 will benefit.

Labor could, of course, raise the threshold, but at what point do we say that big business is being given a subsidy from working Australians to buy luxury vehicles? Our European friends are a decade ahead of us in this madness. They've dismissed policies like this as expensive, wasteful and counterproductive. Their conclusion is that government interference benefits rich companies at the expense of natural market competition. It's why German finance minister Christian Lindner said:

We simply cannot afford misguided subsidies anymore. These cars have so far been subsidised over their lifetime with up to 20,000 euros, even for top earners. That's too much. We can save billions there, which we can use more sensibly.

Germans are saying this.

This bill for luxury foreign electric vehicles is designed to fix a number on Labor's spreadsheet of carbon dioxide output. It's not to assist a transition to electric vehicles for the general public. The fastest rise in product quality occurred when electric vehicles were forced to compete on merit against their oil and gas hydrocarbon fuelled betters. It was only then, when the customer was king, that their price came down. Their quality went up and their range increased slightly. When European governments handed the electric vehicle market billions in subsidies, car manufacturers grew fat and lazy. They took the money, slacked off on development and raised their prices knowing that public money would cover the difference. This is transferring wealth from taxpayers to electric vehicle manufacturers.

Labor's bill is more of the same failed economics that fundamentally misunderstands what drives success. Given the price dynamics at play, if anything this bill penalises full electric vehicles and preferences hybrids. At the same time hybrids begin to win the consumer war, this government's net-zero policies are pushing up the price of fuel and leaving every car owner worse off. We're quickly reaching a point where car ownership will become a rare privilege that won't impact at all anyone in this chamber, yet it will make the lives of everyday Australians an intolerable misery. As Norway, the world's premier electric vehicle buyer, has stated, they want to reduce individual car ownership and see their population walk or catch public transport. The United Nations World Economic Forum EV policy is not about having different cars; it's about no cars—no cars. Good luck telling Australian tradies that, but that's what will happen.

These EVs have no resale value because they tend to be sold when the batteries are cooked. If we're talking about sustainability, electric vehicles are on a swift path to landfill, unlike conventional cars that have many lives and many owners. To get electricity consumption down in order to improve range, EVs are made of composite materials, aluminium and plastics. Most of the steel in the subframe is needed to hold the extra weight of the battery. Recycling is, of course, possible, although with the price of electricity in Australia, thanks to weather-dependent solar and wind driving up power prices, our recycling industry is struggling. Think about this: much like used plastics, glass, solar panels and wind turbines, EVs will not be recycled beyond their copper wires and the little steel that has been used. If electric vehicles are a less desirable product at a terrible price heading towards extinction, what are their alleged climate virtues? Let's consider that: this virtue is not based on science; it's not a calculation of their cradle-to-grave life cycle. It's a self-declaration. Electric vehicles identify as net zero, and so this government treats them as such.

No-one is looking at the harm these electric vehicles cause out of sight in the Third World or asking why they still have a social licence, given that most of them source raw materials on the back of child slave labour—child slave labour. What is the environmental cost of the Third World mining operations to build a car that sits in an Australian dealership with a green virtue sticker on the side? That's completely irrelevant as far as this government is concerned. Why else would Labor throw good money after bad behind Congo cobalt? Labor are turning a blind eye to the 40,000 children in the Congo mining the cobalt for EVs—after this bill, 45,000. Leading electric vehicle manufacturers claim to be free of child slave labour, yet their supply contracts for cobalt are with companies with child slave labour in their supply chains—deceit.

We like to think that our civilisation has advanced, yet these net-zero technologies, more than any other, are indulging in the cheap, largely unregulated labour of our poor neighbours and their children. When it's not children down mines clawing at the ground with their bare hands, it's the toxic mining practices for rare earths that make coalmines look like an oasis. This is the truth behind the green sticker. Electric vehicles need mining, and the Greens hate mining—or so they tell us. Greens and teals demand coal stay in the ground. How can anyone make more EVs without using coal to smelt the steel and the aluminium, process the plastics from coal and oil and make the glass? How can we make more electric vehicles without oil in the bearings? It seems the government and the Greens and teals cheer squads are determined to find out. It's impossible.

Added to the list of disasters waiting to happen is the effect of this many electric vehicles on the national electricity grid. Now we're talking about something that's hurting everyone. All it takes is three or so electric vehicles on an average suburban street to charge at the same time, and the powerlines melt down or shut off. Weather-dependent power like solar and wind cannot charge this many electric vehicles—full stop, that's it. I'm sure this bill will lead to government departments buying another off-market round of electric vehicles to zip around Canberra. What it will not do is save the planet. What it will not do is make electric vehicles more affordable. What it will not do is ease the cost of living. What it will not do is create a better, more competitive product. And who will pay? As always, the people will pay for this government's stupidity and deceit.

Even if they are miraculously delivered in this fit of madness, as a product electric vehicles have serious unresolved issues, like their tendency to spontaneously combust. Australia's firefighters have complained that they do not have the ability to put out lithium-ion battery fires in electric vehicles. So what happens when our underground car parks are packed full of these things and one starts off a chain reaction? What happens if they catch fire beneath apartment blocks, inside shopping centres, in tunnels? The ventilation of buildings and car parks is not designed to handle the safety issue, the hazard and risk issue of the scars, and there will be serious accidents in tight residential areas. If there's a fire, the water used to fight that fire is 10 times the amount for a conventional car fire. Firefighters are terrified of this. Even worse, that water becomes toxic as a result of contact with a toxic battery fire and must be captured and treated. Allowing firefighting water to run off site is an environmental contamination. EV does not stand for electric vehicle; EV stands for environmental vandalism.

This bill states that its purpose is, 'To encourage a greater uptake of electric cars by Australian road users to reduce Australia's carbon dioxide emissions from the transport sector by making cars more affordable'. Let me be straight: this is a big-business perk to help the richest people in this country improve their environmental virtue-signalling and their social credit status on paper. It is nothing more. Labor is offering another incentive to the rich, urban, professional teal voters to come on over to Labor and to keep their buddies in government, the Greens, with them.

Yet underneath it all, the Australian people are left to pick up the bill for Labor's empty virtue-signalling and economic stupidity. This government needs to stop sucking up to the teals and start governing for Australia, and replace policies from the United Nations and World Economic Forum alliance, that began in 2018, with policies instead that serve Australia.

I want to mention a couple of points from Judith Sloan, the economist and journalist. At a time when United Nations and World Economic Forum policies drive goals of converting our transport fleet to electricity and hugely increasing demand for electricity, our bureaucrats push United Nations and World Economic Forum policies to kill reliable, baseload coal power and replace it with expensive, intermittent, unreliable wind and solar. And here's what Judith Sloan said:

It is surely ironic it was Climate Change and Energy Minister Chris Bowen who explicitly outlined the numerical challenge in front of transforming the NEM in such a short time frame. He has told us we will need 22,000 solar panels every day and 40 wind turbines every month for the next eight years. There will also be a requirement for at least 10,000km of additional transmission lines.

At the same time, we'll see 11,000 megawatts of coal-fired generation coming off capacity. This is insane. And who will pay? It's the people who will pay.

We need sensible government—honest governance. We have one flag. We are one community. We are one nation. And we stand for affordable, clean, secure mobility for all Australians.

5:52 pm

Photo of Slade BrockmanSlade Brockman (WA, Liberal Party) Share this | | Hansard source

I too rise to speak on the Treasury Laws Amendment (Electric Car Discount) Bill 2022. It probably comes as no blinding surprise to people that I'm going to speak about this from a regional perspective. But also, it's from the perspective of where I currently live. I live in Perth. Obviously, doing this job has demands in terms of travelling to Canberra and travelling around the entirety of my home state of Western Australia—which means that being relatively close to an airport is pretty essential. So I guess I do live in an inner suburb of Perth.

We have seen in our area an absolute explosion of electric cars just this year. We have seen a significant number of all models of electric car, but particularly Teslas, which are highly visible—you notice them when they're on the road. We've seen a significant uptake in people deciding, through their own purchasing decisions and looking at their own requirements for transport range, and the electrical system they have in their home in terms of being able to charge off their own solar cells—through their choice—to take up an electric car.

But one thing I can absolutely guarantee those listening to this debate and those in the chamber is that you don't see that same uptake in regional and rural Australia. And you don't see that same uptake for a pretty obvious reason: the capacity to charge and the range are simply not there. People need to be able to drive long distances, as my good friend and colleague Senator O'Sullivan pointed out. People need to be able to tow heavy weights. They need to be able to have ranges that go beyond 50, 100 or 200 kilometres. They need to be able to move around the vast state of Western Australia as they have been able to with a petrol engine car—with an internal combustion engine car—and continue to do their business and lead their lives.

We see in this bill a huge shift of wealth, effectively, from outer metro and regional areas to the inner city. As I said, I do live in a relatively inner suburb and we are seeing electric cars there. So, why do we need, through this bill, to give a tax break to those inner-city people who are, quite frankly, already buying electric cars? The uptake is pretty significant. And that is coming at a direct cost—at a direct burden—to those who live in outer metropolitan regions, who have further to drive; to those who live in the regions; and to those who have a requirement to tow heavy loads. That's particularly—and obviously of interest to me—the farming community, tradies and people who work in the mining industry: people who simply don't have a choice.

It is highly questionable—and I'm not going to go through the technical details again; Senator O'Sullivan did a great job of going through the technical details—and it is highly unlikely, using current technology, that there will ever be a solution to towing heavy weights and having electric vehicles that can travel the long distances in rural and remote Western Australia. There could be a technological breakthrough, I have no doubt about that. But why, through this bill, are we effectively penalising those people in outer metropolitan and rural and regional Australia who simply cannot utilise electric vehicles as they currently stand, and will stand for the foreseeable future? Why are we providing a subsidy to the inner city? It really does beggar belief, particularly from a government that claims to be the defender of the working people of Australia. It absolutely beggars belief.

Obviously, I certainly won't be supporting this bill—and there are so many reasons not to support this bill. As I said, it really just represents a transfer of wealth in our society from the regions to the inner city. But it's also bad economic policy. We've got inflationary pressures in the budget, and how has the government chosen to respond? With measures such as this: measures that potentially just lead to more inflation in our economy. And will it have an impact on carbon emissions? No. Experts have said: 'It will have a negligible impact on reducing Australia's carbon emissions for the transport sector. Government's assertions that this initiative makes the take-up of EVs more affordable is misleading. Private buyers and sole traders of EVs cannot access these savings. There are other measures that would have a far greater short-term benefit for the environment than this measure.'

So it's not going to help the environment and it represents a transfer of wealth in our society from the regions to the inner city. Quite frankly, this looks like an ideological frolic. It's a bill that really does show the true colours of this government: it's one that wants to go on ideological frolics to provide lip service on a particular issue but, when it comes to proper policy development—

Senator Ayres, do you think you should be riding a horse? Is that what you're trying to get at? I'm sure you could. I'm sure you could provide a tax break to horses if it was of political advantage to the Labor Party! But you choose not to. You choose to provide tax breaks to the inner-city elites. I'm sure there'd be plenty of people who'd take a tax break for horses, Senator Ayres. But instead, the Labor government provides tax breaks for the inner-city elites. For those reasons, and many more, I will not be supporting the bill.

5:59 pm

Photo of Gerard RennickGerard Rennick (Queensland, Liberal Party) Share this | | Hansard source

I too rise to speak about the Treasury Laws Amendment (Electric Car Discount) Bill 2022. I'd just like to flag that I'll be moving a second reading amendment to this bill, to do with recycling—which is very, very important—to make sure we clean up the mess that this bill will create. And I just want to reiterate Senator Brockman's words: that this is nothing but a transfer of wealth from the poor to the rich. Just this week, the Australian Financial Review came out and said that this tax break could be worth up to $30,000—$30,000, for rich people who can afford to buy an electric car. And that's going to come out of general revenue, which means that the poor, the lower-income earners, will have to pay more taxes, just to balance the budget. We've heard in here from Senator Wong—she's not here this afternoon, which is a shame—that renewables are cheaper. So can somebody tell me this: if renewables are cheaper, why do we need to give a tax break of up to $30,000 for every new EV that is bought? That is absolutely absurd.

I can tell you something: if you want to look after the environment, the best way to do that is to have a strongly growing economy. And there is nothing productive about giving a tax break on cars that are going to be driven around the inner city and might travel a couple of hundred kilometres if you're lucky. We're going to be having extension leads running out over footpaths and hanging up over trees. The stupidity! We've seen this in Sydney already, where people are trying to charge their cars on the street, with on-street parking. How dangerous is that? And for what? For nothing but a pipe dream.

These people want you to believe that they're struggling under global warming. We were told that yesterday, by the CSIRO, who came out and said that the temperature has risen by 1.47 degrees since 1910. I must admit, when I first heard that figure quoted in question time yesterday, I nearly fell out of my chair, because, just back in 2018—and I remember these numbers, just like that—the CSIRO and BOM said that the temperature had risen by one degree. So, in 2018, in the 108 years since 1910, these guys said the temperature had risen by one degree. Now they want us to believe that it has risen by another 0.47 of a degree in just the last four years. Well, I don't know about you, but I'm pretty sure it isn't hotter this year. The last two years have been cooler and wetter than the prior years, 2018 to 2020. They were quite warm years, I'll accept. But, in the last couple of years, things have actually cooled off a bit here in Australia, certainly along the east coast—and even up in Cairns.

I was up in Cairns earlier this year, and it was down to seven degrees. They were complaining that they had to put jumpers on for the first time in their lifetime—that's how cold it was at the Cairns show. That had never happened before—people wearing jumpers at the Cairns show. Isn't that right, Senator Scarr?

Photo of Paul ScarrPaul Scarr (Queensland, Liberal Party) Share this | | Hansard source


Photo of Gerard RennickGerard Rennick (Queensland, Liberal Party) Share this | | Hansard source

It just goes to show.

I have to note that Senator Wong isn't here. She called me a coward yesterday, when I questioned these figures, as if to ask: who was I to question the BOM and the CSIRO? I'll tell you who I am to question the CSIRO and the BOM: I'm someone who has studied statistics in senior, at university and in my postgraduate degree. So I'm very well versed in statistics and I'm very well versed in record keeping. It is very important to note that the record keeping that the BOM undertakes is nothing to do with science; it's purely record keeping. You take a measurement, you write the number down and you store it away for posterity. You don't start creating multiple datasets—well, you're not changing the initial dataset. You create a new dataset and then you report the whole new dataset.

And you don't have to take my word for it because, back in 2011, there was an independent peer review done on the BOM's observation practices. You can look this up. It's a really important one. I haven't talked about this in years, because I've been distracted by a few other issues. Of the Australian Climate Observations Reference Network—Surface Air Temperature, or ACORN-SAT, there was an independent peer review, and I've got here the Report of the independent peer review panel, 4 September 2011. I want to come to the key paragraph, because they do acknowledge that the Bureau of Meteorology is very good at homogenisation. Now, that is doublespeak for modelling—which is doublespeak for fudging, right? I can talk about economists; I've dealt with economists all my life. There's a big rift between accountants and economists, because we don't like modellers; we like people that measure real things. So let me take you to the key paragraph here:

… the World Meteorological Organization's Guide … states that an acceptable range of error for thermometers (including those used for measuring maximum and minimum temperature) is ±0.2 °C. However, throughout the last 100 years, Bureau of Meteorology guidance has allowed for a tolerance of ±0.5 °C—

plus or minus half a degree—

for field checks of either in-glass or resistance thermometers. This is the primary reason the Panel did not rate the observing practices amongst international best practices.

There you have it, Senator Wong—I know you're not in the chamber, but if you're listening, check it out. This was the review that you commissioned—either you or Greg Combet—back in 2011 when you were the environment minister. They're not my words, they're from an independent peer review in 2011. One of the first questions I asked in estimates as a young whippersnapper back in 2019 was to the bureau on whether or not they'd reduced that margin of error—and they hadn't. Plus or minus half a degree is one degree. Minus half a degree on the low side and plus half a degree on the top side is a degree. That is exactly what they were claiming until about two years ago. The so-called increase in temperature is purely within the margin of error. I could go on, but I thought that needed to be said for the record after that imputation from Senator Wong yesterday about me being a coward. No, it's actually all written here.

The other thing we need to talk about here is that somehow renewables are cheaper. I'd really like to know on what basis the Labor Party, Senator Wong, and the member for Sydney, Tanya Plibersek—who said it earlier this week on TV—think that renewables are cheaper. That's an interesting comment to make. When I was in estimates, I asked Senator McAllister how many kilometres of transmission lines are going to have to be built to reach the 43 per cent reduction in CO2 by 2030? Lo and behold, Senator McAllister had absolutely no idea. Here is the range we were given: somewhere between 5,000 kilometres and 28,000 kilometres. Can you believe that? That is a massive range. If we had done 28,000 kilometres of ripping out scars across the beautiful countryside, farmland and native forests, is that good for the environment? I don't think so. I don't think scarring the landscape with transmission lines will be good for the environment at all. But that's not all: we'll also be getting the deaths of eaglehawks and bats. Bats, along with bees, are one of the key pollinators of our native plants in this country, but in the name of reducing carbon emissions—by the way, as I said the other day, carbon dioxide is recycled naturally every four years. That's all free. That's true. If you want free energy, come back to photosynthesis. But I digress.

Let's get back to the batteries. I can tell you, if you think transmission lines, solar panels and wind turbines are going to be bad for the environment, wait until you break down the cost of what goes into building a battery. Lithium is a one per cent ore body. That means you have to mine 100 tons of the ore to get one ton of lithium. That involves an intensive electrolysis process to get the metal out of the ore. But that's not all—you can't go and get the ore body out of the ground; you have to go around and around in the big mining trucks and the caterpillars and everything else that picks up all the dirt, and cart it out. You can often have a stripping ratio of up to 10 to one, which means to get one ton of lithium metal you might have to shift a thousand tons of dirt. Guess what? That's just one of the many metals that goes into a battery. You have other things, like aluminium, steel and cobalt. And where's the world's biggest producer of cobalt? It's the Democratic Republic of the Congo. How do they get their cobalt out of the ground? That's right, child labour. Gee, that's going to be good for the environment. It's bad enough that all of these so-called renewables—which they're not, none of this stuff recycles naturally throughout the environment every four years like carbon dioxide does—but it's also a human rights issue. It's going to be bad for the children in the Congo and who knows what other countries.

It's obviously a human rights issue here because we are transferring $30,000 every time a new car is bought from the poor to the rich, from the working class to the wealthy. That is what the Labor Party and the Greens are today—they are the parties for the inner-city, self-loathing, virtue-signalling, rent-seeking elites. That is what they are. I well remember a former Labor Prime Minister said, 'God save the Queen, because nothing will save the Governor-General.' Let me say, 'God save the King, because nothing will save the Labor Party from the working class when they have their noses driven into the grindstone by the increase in taxes and the economic pain that is going to come from higher energy prices and watching as the urban elites drive around with their electric cars while the working class are struggling in their petrol cars.' And it's not just a handout of $30,000 for a car. The working class are also going to have to pay the fuel excise. These electric cars aren't going to have any fuel excise. Are we going to have a user toll on them?

On top of that, good luck to you if you're trying to actually get your car charged. I was reading an article on the weekend that someone sent to me. It said that there is now 'recharging rage' in the UK because people have to wait so long to get their cars charged. If someone accidentally bumps into the queue where others have been waiting for three hours, fights are starting at the recharging stations. It's not like with an internal combustion car—you just pull up, fill up your tank and drive away. It won't be too long before there's another bill in here where we're suddenly going to have to start building the recharging stations. I guarantee you that's what will be happening.

No sooner has the ink dried on the 43 per cent reduction in carbon dioxide by 2030 and what have we got? We've got another handout with the fringe benefits tax for renewable cars. It will just keep on coming. I guarantee you that the Rewiring the Nation fund of $20 billion will have to be increased. There was modelling the other day that showed that it will cost about $1 billion, or some astounding amount, for every kilometre of transmission line. It was estimated that, to rewire Australia to get to the 43 per cent, it would cost something like $100 billion. So the $20 billion Rewiring the Nation fund is not going to cover it.

If you think that the private sector is going to stump up $80 billion of their own money, forget it—unless, of course, it's superannuation money. They might get there that way. It's bad enough that you've got to pay the fuel excise, but now you're being forced into paying 12 per cent super. I say to our young people: don't think you're ever going to see your super again, because they are going to blow it because these super funds are driven by ideology, not productivity—this ESG stuff. They're all bought. You've got the Marxist in the boardroom now. They're not driven by productivity; they're driven by ideology. That is a sure recipe to send this country broke.

I just want to touch on one other thing: these electric cars are going to be up to 800 kilograms to 1,000 kilograms heavier. That is going to increase the distance for braking. We're going to have more car accidents because your braking speed is going to be much slower. The weight of these cars can increase by 20 to 30 per cent. We're going to have to use more energy just for the car to travel around because they're going to have massive batteries. These things are solid bricks. Imagine the impact of getting T-boned by these cars, especially here in Australia.

I was actually just talking to a famous Queenslander—Queenslander of the Year 1986—Russell Strong, who did Australia's first liver transplant. I'll let you guess why we got in touch. He's on my side, by the way, if you're wondering. The reason why we have more liver transplants in Australia is because we drive on the left-hand side of the road. If the driver gets T-boned, it damages the liver. So there are going to be more liver transplants.

The other thing is: what about the southern hairy-nosed wombat? What will happen to it when all these inner-city elites from Sydney are driving down in their new EV cars for their ski trip? The member for Warringah had a lovely career growing up, travelling the world and competing in ski trips. What will happen to these guys—our little marsupial friends on the road—with increased braking time? Are we going to have more deaths of southern hairy-nosed wombats because of these electric vehicles throughout the winter season, with all the elites driving these heavier cars with longer braking distance? What about all the extra rubber pollution off the tyres and all the extra brake wear? What about that? Have all these people looked into this?

Then there's the cost of recycling. Who could forget Larry Marshall's famous words in estimates when he said—and I didn't ask him this; he actually proffered this himself—that it's going to cost three times as much to recycle a battery as it will cost for the materials that actually go into it. What are the chances of that actually ever being economical, when the cost of recycling something is three times more than the cost of building it? I'll tell you: it is not going to happen. This bill will not only destroy the environment; it will destroy the economy and it will destroy our country. It is just another step on the path to destruction because of this useless Albanese Labor government.

6:14 pm

Photo of Susan McDonaldSusan McDonald (Queensland, National Party, Shadow Minister for Resources) Share this | | Hansard source

The coalition will not support the Treasury Laws Amendment (Electric Car Discount) Bill 2022. It's not because of electric vehicles; it is about bad policy. In this legislation, the government has failed to do a number of things. It's failed to establish clear criteria and metrics of success for the policy. It has failed to ensure the expenditure is temporary, proportionate and linked to tangible productivity gains. It has failed to quantify any benefit of the policy to electric vehicle uptake, to emissions reduction or to the budget bottom line. It has failed to tangibly address the biggest constraint on electric vehicle uptake, which is supply and infrastructure, and it has failed to consult with business and civil society on policy design.

This is at odds with the new government promising sensible economic policy and fiscal repair prior to the election. In fact, the Treasurer said on 28 June 2022:

… Government must make the hard decisions necessary for responsible budget repair.

…   …   …

… making sure that spending is about building value, not buying votes.

… every household has to make tough decisions about what they can and cannot afford—and it shouldn't be any different for their government.

And because the budget should be about high-quality investments in the right priorities.

Throughout the bill, this government has revealed this to be nothing more than pre-election posturing.

This is about a Greens deal to deliver for the inner-city and not about practical measures for people in Australia who are struggling under unaffordable cost-of-living issues, who are struggling to meet basic cost-of-living measures. This government is introducing a bill that is going to bake in costs to the budget for years and years to come. This is very serious. It is incredibly serious because the independent Parliamentary Budget Office has said that this bill will cost billions of dollars—that's billions with a 'b', not an 'm'—through the next decade. And yet the government cannot say what it will deliver for emissions reductions. They cannot say what it will deliver to the electric vehicle market. They cannot even say what criteria would make it a success.

Demand for electric vehicles is already high. It's growing. Figures from the Federal Chamber of Automotive Industries shows sales of pure battery electrical vehicles last month represented the highest market share ever recorded. This bill is not just about pure electric vehicles; it also covers hybrid vehicles and variations. My daughter, who lives in Brisbane and is able to commute around the city, has a hybrid vehicle. It is very cheap to run. That's terrific news. But she pays registration and, when she uses diesel or fuel, she pays a fuel tax. But this bill removes the FBT payable on vehicles up to $84,915. It provides a subsidy for people with electric vehicles and hybrid vehicles, but not for people who do not have the luxury of a short commute. It does not provide the same advantage to people living in northern Australia.

This is a bill that is incredibly poorly conceived and poorly budgeted. Despite being referred to as tax reform by the Treasurer, the Senate inquiry suggests this bill is high-cost and low-impact and has been designed with no consultation with industry, government or civil society. A number of experts have a raised serious questions about equity, financial stability and price pressures on the electric vehicle market, and evidence from Treasury and the department of climate change shows the impact of this policy on emissions reduction has not been quantified. Third-party evidence suggests it is negligible.

I am perplexed because, daily, we hear the Treasurer talk about the difficult financial situation he is in. He talks about the $50 billion budget increase, additional income thanks to commodity prices, which he has spent, and he is once again spending more money than he is collecting with this budget measure. It provides a subsidy on FBT to some people but does not make that same subsidy available to every Australian. It does not take into account that some of the vehicles they are subsidising will not pay fuel taxes. It does not take into account the impact on road maintenance and the collections that Treasury relies on in order to fund the cost of road maintenance, of safety concerns for Australians travelling big distances. Instead, it subsidises people who have very short commutes.

This is a crazy policy. We know that there is not enough infrastructure available yet to charge your vehicle. Imagine living in a high-rise building, in Sydney or Melbourne, where there are not enough shareable power points to allow these vehicles to be charged. We see images every day of extension leads draped out of windows and onto the street, to support vehicles that may not be paying the electricity cost to their high-rise building body corporate. Yet the government will subsidise the market share of a vehicle that is growing in popularity. I want to be clear: the opposition is not opposed to this bill because we have any problem with electric or hybrid vehicles; it's opposed to it because of poor infrastructure planning and poor budget planning. This is poor policy.

When Peter Shergold reviewed the government's ability to make good decisions, I am almost positive that this would be a shining example to him of poor government policy and decision-making. 'No consultation' was the No. 1 thing identified by Mr Shergold. 'Poor budget outcomes' was another. 'Clear criteria' and 'measurements of success' and 'ensure the expenditure is temporary, proportionate and linked to tangible productivity gains'—I could go back and repeat the list that I started with, at the beginning of this contribution.

I shan't, because there is nothing in this bill and policy-making that gives me any confidence in this government's ability to manage the budget and make good decisions, and I certainly have no confidence in the government supporting people who are not as advantaged as those who have short commutes, who live within places that have—hopefully—some sort of infrastructure to charge their vehicles. It is a government that has no plan to replace diesel fuel and fuel taxes. Instead, we're going to subsidise the FBT benefit for people who are buying electric and hybrid vehicles.

The Institute of Public Accountants—not a group usually known for hyperbole or exotic statements—has stated that this policy:

… will have a negligible impact on reducing Australia's carbon emission from the transport sector.

It has said:

The Governments assertion that this initiative makes the take up of EV's more affordable is misleading …


Private buyers and sole traders of EV's cannot access these significant savings …

The Institute of Public Accountants went on to say:

… there are other measures which would have a far greater short-term benefit to the environment than this measure.


Given the cost of EV's, their limited supply and the lack of infrastructure, it seems the cost of this initiative is not warranted, particularly given the small number of vehicles that is anticipated to take advantage of this initiative over the three-year exemption period.

I have a range of quotes. I've quoted the Institute of Public Accountants. There's the Tax Group at the Melbourne Law School, UnitingCare, Treasury. Even Treasury is not able to articulate the long-term costs of this measure. Treasury agrees with the Parliamentary Budget Office that the cost of this measure will grow over time, stating in response to a question on notice that the costs of the measure are expected to increase over time as the measure matures, including into the medium term, and that the Treasury costing is sensitive to the uptake of electric vehicles, and this is something which could vary.

I'm truly appalled to be part of this Senate, forming part of a parliament that is led by Labor, which is making such poor policies decisions that the only people who support them are the Greens! The only people who support this bill are people who want to encourage electric vehicle rollouts in the face of overwhelming evidence that this is not a necessary budget measure. It is not going to increase the uptake of electric vehicles, which is already a growing, mature market. It is not going to increase the infrastructure that's available to support these vehicles. Worse—for me, as a representative of regional and Northern Australia—is that it will not provide any advantage at all to the people who are doing it the toughest: the people who have the highest cost of electricity, the highest cost of insurance and the highest cost of food. The Labor Albanese government, in partnership with the Greens, are delivering for the most entitled and supported group in Australia but they're not supporting poor Australia. They're not supporting working Australia and they're certainly not supporting regional Australia.

It's shocking, and we should be ashamed to sit and pass this piece of legislation, because it is not by any measure good policy. Peter Shergold would tell us that. Blind Freddy on the street would tell us that! This is not a measure that is suitable for the outcomes that this government says it's trying to achieve: budget restraint, emissions reduction and supporting Australians who are struggling with the cost of living.

Ashamed we should be. We have the opportunity in this place—the opportunity that I'm taking right now—to point out shortcomings in policy development. We have the opportunity to get a decision right on this particular bill. I would encourage those opposite, members of the government, to pull this bill and to say: 'We're going to go back and think about it. We're going to have another look at how we can deliver on all of our stated objectives.' Budgetary measures, emission measures, consultation with industry, delivering for Australians who are under increasing cost-of-living pressures, the lack of infrastructure that's available to support these vehicles—it's for all these reasons that this poor public policy should be stopped immediately.

6:28 pm

Photo of Ross CadellRoss Cadell (NSW, National Party) Share this | | Hansard source

I love cars. As I'm someone who came in here and started their first speech describing the last third of a lap of Mount Panorama, you might get that. I love everything about them. I love driving them, I like owning them, I like spannering on them and I like working on them. I don't love cleaning them—that's a downside. And yet I stand here against this bill. I can't make a great argument, because I will benefit from this bill. I have in my folder my order, dated 26 August 2021, for my Tesla, yet to be delivered. I'm proud to get out there because I want to drive that car. I bought it because I want to own it. I bought it because I want to have a crack. And it's not just that. I spoke to Toyota last year about a Toyota Mirai, a hydrogen car. It's a great car. James May loves it. I love it. I'm on a list. But I can't refuel it. I can get it but can't refuel it.

So what does this bill mean for me? This means that, on top of my taxpayer funded salary, you're going to give me another 30 grand to buy a car. I don't deserve it, but that's what this is. We're playing races not with cars but with technologies. We're going back to the gaslight versus the electric light or the Betamax versus the VHS, and we're trying to pick winners early.

There are different cars. As I said, there's the Mirai hydrogen car, and last month Volkswagen, in cooperation with Kraftwerk—which I thought was a 1980s German techno band but is now an automobile organisation—has lodged patents for a different kind of hydrogen engine, using ceramic instead of plastic. They get 2,000 kilometres of range out of a hydrogen car. You've got the Hyundai N Vision 74 coming out, another hydrogen car that's looking good. I'm watching this space. We all saw Richard Hammond's crash the Rimac, one of the leading-edge electric cars, which took two weeks to put out after it caught on fire because each cell kept on burning.

On this side, we have said that we're not anti electric car, but this is a waste of taxpayers' money. People who have had a windfall gain, like me, or been lucky or worked hard in life don't need taxpayers' funds to buy these cars. I have a company; I can do this. If we're going to spend this money, let's build the infrastructure that Senator McDonald was talking about to refuel these cars, to give them range and to give country and regional people the chance to have access to these same things. But we're not; we're giving money to people who are already likely to buy these cars. And we're backdating it for people who have already done this. We're going to say to people who have already bought cars, 'Please have some more money for making a decision that you've already made.' That's a great thing for them, but that's not good for the country. So we sit here looking at a bill that will fund people who don't need it to buy things they've already bought, and we are not out there funding the infrastructure needed. We're not making the cost of living easier for people or making it easier for people to get through what they have to get through.

This car won't be captured by road tax. I think Senator O'Sullivan mentioned this. We were working out the battery: there's a 100-kilowatt battery which weighs 666 kilograms. It will be chewing roads, but it won't be captured by the fuel tax. A Toyota Mirai isn't captured by the fuel tax, and we don't have the fuel infrastructure. There is some fuelling in Canberra, but there is nothing in Newcastle and nothing in the Hunter.

And what is this for? I was in my office when I heard Senator Rennick talking about the hairy-nosed wombat, but a wombat in the spotlights of a LandCruiser coming down the highway—'Oh, an energy electric car, a hydrogen car, we must support it.' That's not good policy. Just because it has some click words and we can share it and do a little TikTok energy dance doesn't make it good policy. Giving money to people who don't need it for decisions they've already made is the definition of waste.

I think COP27 has just been, but last year we went to COP26 and meet with Tesla and the climate change committee of the UK. Their point was not that we need to subsidise cars. People are buying as they see fit. What they were talking about was the infrastructure that can charge these cars, fuel these cars, prevent the road rage that is happening. That is the single determinant in what people take up—how usable they are. And this bill does nothing to make it usable. It takes funds from the government that should be going into building that fuelling infrastructure, and it puts those funds into the pockets of those who don't need it.

That's a good point. We haven't even got mobile coverage in the regions. How are we going to have charging stations out there for people? How are we going to incentivise that when it takes 20 minutes, 30 minutes, an hour to charge cars? If they can't get on their mobile phone in the bush, how are they going to charge a car? That's what we're not looking at here.

It is great that the take-up of electric cars in Australia is going well. I think hydrogen, if this new technology of VW and Kraftwerk picks up, could be a great thing. Let's not rush to outcomes for a media grab. Let's watch the market work. Let's let the technology evolve. Let's make choices that make sense.

I will be voting against this bill. I think it's going to pass—and I will thank you for the 20 or 30 grand you give me if you pass this bill—but it shouldn't be like that. That's not why we were elected. That's not an energy policy that will reduce any emissions. In the regions this will be the weekender car, the hobby car or the spare car; it won't be the main car. The people in the regions who buy one will be treating it as such.

I heard Senator O'Sullivan, another car nut on this side, talking about the towing capability of vehicles. We watched an episode where they towed a boat across the United States. It got to the point where they had to put a diesel generator in the boat to charge the car at the 100 stops it made across America.

These things will get there, but let's not rush. I go back to Senator Smith again. It's like the UK. We were talking about offshore wind. We are in this rush for offshore wind—'Let's get this offshore wind because the UK can do it.' The UK has depths in the channel of about 40 metres. The depth on our shelf is about 400 metres or more. Floating wind technology will come, but it is not commercially viable yet. Let's not rush.

Someone else spoke about the cost of green energy, what we're doing and how we do it. Let's face it, at the moment most of the energy for electric cars comes from coal. Prices will have changed, so I'm not breaching any confidentiality. I was working on a hydrogen project at the port of Newcastle. If we wanted to have green hydrogen produced at that time, it was $9 a kilo from renewable clean energy. That's the market telling us that. If I wanted grey hydrogen, it was $2.90 to $3.30. It's not a mystical cloud-cuckoo-land where unicorns fly around and we have wonderful times and can say that something is cheaper. When you have to buy it, at the moment it is not cheaper. We're rushing towards a goal without looking at the consequences.

Even though this bill will benefit me, who is in this place taking taxpayers' funds, earning a good wage, it should not be supported. I've demonstrated why this bill is wrong and why we should not be supporting it.

6:37 pm

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

We have a modern trend of putting in brackets the attributes of a bill—the talking points, if you like, or the government's propaganda. This bill is called the Treasury Laws Amendment (Electric Car Discount) Bill 2022. Sometimes there are more accurate parenthetical descriptions of bills. Instead of having 'electric car discount' in the brackets, this one should have 'tax cuts for the rich' in the brackets. That's really what this bill is about. The government provided no evidence to the Senate inquiry on this bill that this bill will lower greenhouse gas emissions—nothing at all. I will come to why they haven't been able to provide that evidence.

As Senator Cadell has outlined, this bill will make it harder to fund our road network in the decades to come. By God, we need investment in our roads. In the last sitting period I drove from Rockhampton through Senator Cadell's patch in the Hunter—I went down the New England Highway—to get here. Then I had to drive all the way back. We need a lot of investment in our roads, especially rural roads. This bill will make that harder.

As I said, the primary effect of this bill will be a massive tax cut for people on very high incomes, without any real evidence that it's actually going to generate much. I think it's important to go through the figures here to let people know exactly what we're talking about—the size of the tax cut we're talking about for people of very good means. The Australian Taxation Office website has a fringe benefits tax calculator. This bill effectively exempts purchases of electric cars from fringe benefits tax. So when you go and use that calculator, if you bought an electric car worth $50,000—that's a pretty cheap electric car; they start at about $40,000 and most of them would set you back $60,000 or $70,000, sometimes even more, but let's be generous to the government and say a $50,000 electric car—that would provide an annual fringe benefit of $9,972.60. That would come off and be deducted from your taxable income under this bill. You don't get all that saving; that's what your taxable income would fall by, so then the benefit to you depends on your marginal tax rate.

Of course, the more money you earn, the higher your marginal tax rate is and the greater that exemption from fringe benefit will be to you. If you're on $200,000 a year, that's a very good wage, not uncommon—as I'm aware, I'm on about that amount of money—here in this place. This would be a very good bill for politicians, I should say, for those listening out there. Politicians will do very well out of this bill. But if you're on $200,000 a year—as I said, that's a well above average wage, about double the average full-time wage in Australia—you'll be on a 50 per cent marginal rate, roughly, so that $9,900 deduction will actually help you out $5,000 a year. You'll be $5,000 a year better off thanks to a Labor government. In this country the Labor Party is giving a rich person, someone on that sort of money, a $5,000 free kick a year. Amazing. If you're in the lowest tax bracket, if you're earning only 50 grand a year out there—not the lowest tax bracket but the lowest one above which you pay tax—your benefit will be just a thousand dollars a year.

We hear lectures often from the Labor Party about how they try and represent the poor. They accuse us of giving tax cuts to the rich and of cutting services to the poor, and here we have a bill, one of the very first bills that this Labor government has introduced, which is all about giving massive tax cuts to the rich. You have to wonder how many extra electric cars will be bought thanks to this bill. We don't know. There has been no evidence provided by Treasury, the government or the committee. I know people, some friends of mine, who do very well and earn very good wages. They are rubbing their hands with glee because they're going to get these multiple-thousand dollar tax deductions when they've already bought Teslas. Keep in mind this bill is backdated to 1 July this year, so anyone who has bought Tesla in the last few months, even if they didn't know they were going to get the deduction, just gets a free kick. 'Here you go. Thank you for electing a Labor government. Here's 5,000 bucks a year,' to a rich person. That's a year. Over the life of the car it'll be tens of thousands of dollars, as Senator Rennick pointed out.

This bill, if nothing else, will go through this place, because they've got partners in the Greens here. The average income of Greens voters is way higher than any other political party in this place, so they have that constituency. They have an excuse, the Greens. Their voters are on $200,000 a year, quite often, so we know they've got to look after their voters. The Labor Party's voters are still about the average income, but I don't think they've even realised yet—they're going to find out, especially in this term of government—that the Labor Party aren't really for the working class anymore; they are for the rich, well-educated, tertiary-educated professional classes in this country. Good luck to those people. A lot of my friends are those people, but the Labor Party are out to protect their interests, not the working class in this country, who cannot afford to buy even a $50,000 Tesla—I don't think you can Teslas for that price, but a $50,000 electric car—let alone a $60,000, $70,000 or $80,000 electric car. That's just beyond those people who are struggling right now with higher living costs. They will get no benefit from this particular bill.

As I foreshadowed earlier too, on top of all that, on top of the regressive nature of this bill, it's not even clear that this bill will lower carbon emissions at all. As I mentioned, there has been no evidence provided by the government that this will encourage additional electric vehicles to be purchased, and actually there are very large questions about how much electric cars themselves will lower carbon emissions, because the basic problem here is that the manufacture of electric vehicles is extremely energy intensive and by being energy intensive is therefore carbon-emissions intensive. In fact in a recent study by Volvo on one of their vehicles, on their XC40 vehicle or the equivalent of the XC40 for their electric fleet, that car actually created 70 per cent more carbon emissions in its manufacture than a traditional internal combustion engine vehicle. So when a car comes off a lot, the internal combustion engine vehicle, the ICE vehicle, as they call it, has 70 per cent lower emissions—no, sorry, that should be the other way around. The electric car has 70 per cent higher emissions when it comes off the lot than the internal combustion engine car. So there are higher emissions, and from day one of this bill coming into effect—if it does mean that additional electric cars are purchased and more are produced—then there's no doubt that it will actually increase carbon emissions over the next few years.

Of course, electric cars don't use petrol and therefore, potentially, have lower carbon emissions in their use, but they do need electricity to be charged. So what's crucial to the carbon emissions calculations are what types of electricity electric cars use to charge. This Volvo report had some very good analysis of that. It showed that if the electricity you source for your electric vehicle came from the global average of different fuel types, then coal accounts for about 40 per cent of that and gas is about 15 per cent. So you would be looking at close to half of your electricity probably coming from fossil fuels. If that's the electricity grid that you charge your car from then you'd have to drive the car 110,000 kilometres before it became carbon neutral. That's just to be at the same amount as the internal combustion engine—not better! It would just break even with the internal combustion engine after you had driven 110,000 kilometres.

The average Australian drives 13,300 kilometres in a year. So the average Australian would need to drive the car for eight years—eight years!—before they could break even. There wouldn't be any savings, they would just break even. The Labor Party came to government saying that they're going to reduce carbon emissions by 43 per cent by 2030. By my maths, that's in how many years? Eight years! That will be in eight years time. So this bill will actually increase carbon emissions from now—global carbon emissions, because of course these cars will be built overseas—over the next eight years. That's because all these electric cars will be carbon positive for the first eight years of their lives, on average.

Why are we doing this? What's the point of this? I should add, as a bit of a footnote to this, that that analysis is based on the global fuel electricity mix, as I said, but in fact Australia has a more carbon-intensive electricity system than the rest of the globe. We get about 60 per cent of our electricity from coal and another 20-odd per cent from gas, so our particular break-even number is different. I don't have access to the modelling to do my own figures on it, but you'd actually have to drive one for longer. So I'm being generous to the government here; it would probably be 10 or maybe 12 years of driving here in Australia before you got to carbon neutrality.

Really, we have to wonder what this is all about. If we're serious about reducing carbon emissions, why are we spending so much money on cars that are much more carbon intensive? You have to wonder—and you have to come back to the money. That's what this is about. It's about the money and it's about giving people a tax break to buy a new car. If they can afford it, good luck to them—

Photo of Gerard RennickGerard Rennick (Queensland, Liberal Party) Share this | | Hansard source

It's ideology.

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.

6:52 pm

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | | Hansard source

I would like to begin by thanking senators who have contributed to the debate. The Treasury Laws Amendment (Electric Car Discount) Bill 2022 implements the government's election commitment to provide a fringe benefits tax exemption for employer provided eligible electric cars. The bill amends the Fringe Benefits Tax Assessment Act 1986 to exempt from fringe benefits tax the use or availability of eligible electric cars made available by employers to employees from 1 July 2022.

The Senate Economics Legislation Committee has considered and reported on the bill. We thank the committee for its work, and we also acknowledge and thank the individuals and organisations who provided submissions through that and appeared at the public hearings. Overwhelmingly there was support for the measures; however, some thought the bill could go further and raised issues such as fuel efficiency standards and the need for a comprehensive national electric vehicle strategy.

The government is putting in place the next steps to establish Australia's first national electric vehicle strategy. At the heart of the strategy will be a plan to improve uptake of electric vehicles and further improve affordability and choice by growing the Australian electric vehicle market. The government welcomes the committee's recommendation that the bill be passed.

The Australian Greens support a fringe benefits tax exemption for electric cars but are recommending that plug-in hybrid vehicles be excluded on the basis that such vehicles are not zero-emission vehicles. While the government appreciates this view, it also recognises our current low take-up of any electric vehicles and the important role that plug-in hybrids can play in facilitating Australia's transition to zero-emission vehicles, particularly in rural and regional areas.

The Greens have also recommended the inclusion of personal electric vehicle charging infrastructure. The government is looking at more direct support for EV charging through our Powering Australia plan, and the Minister for Climate Change and Energy recently announced funding for a streetside EV charger trial.

We acknowledge that the opposition provided a dissenting report recommending that the bill not be supported and that the funds be redeployed to other methods of increasing EV uptake, including infrastructure. The government is supporting EV infrastructure through the Powering Australia plan and exploring further options to increase electric vehicle uptake through the National Electric Vehicle Strategy.

The amendments contained in this bill will incentivise greater electric car uptake in Australia and contribute to reducing our emissions. I commend the bill to the Senate.

Photo of Sue LinesSue Lines (President) Share this | | Hansard source

The question is that the second reading amendment moved by Senator Dean Smith to the Treasury Laws Amendment (Electric Car Discount) Bill 2022 be agreed to.

7:02 pm

Photo of Gerard RennickGerard Rennick (Queensland, Liberal Party) Share this | | Hansard source

I move:

At the end of the motion, add ", but the Senate:

(a) notes that with this policy the Government has failed to:

(i) consider the need to dispose of EV car batteries in an environmentally safe manner,

(ii) address the hazardous by-products of redundant EV car batteries and ensure that toxic substances do not leach into the environment,

(iii) consider the costs of recycling EV car batteries,

(iv) introduce regulatory standards or criteria for recycled EV car batteries to be re-sold to the public,

(b) calls on the Government to outline a plan for EV battery recycling and consider other proposals to cover the costs of recycling and disposal of EV car batteries

Photo of Sue LinesSue Lines (President) Share this | | Hansard source

The question is that the second reading amendment, as moved by Senator Rennick, to the Treasury Laws Amendment (Electric Car Discount) Bill 2022 be agreed to.