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Wednesday, 28 May 2008
Page: 3494

Mr IAN MACFARLANE (11:13 AM) —I listened carefully to what the member for Lindsay said. I think he was talking about the same bill that I am about to talk about, the Tax Laws Amendment (Luxury Car Tax) Bill 2008. There was a great deal of rhetoric and some of those wonderful old catchphrases. And I must say, as someone who was a farmer during the days of the Hawke-Keating era and watched his livelihood obliterated by high interest rates, it gladdens the heart of this old farmer to hear the words coming from the Labor Party that all of that is a thing of the past. They are vitally interested in lowering inflation, when inflation ran at six per cent last time they were in government. They are vitally interested in keeping interest rates down, even though interest rates when they were last in power peaked at in excess of 22½ for farmers. They are vitally interested in fiscal responsibility and budget surpluses, even though when they left government last time their budget deficit was in the tens of billions of dollars—I think $12 or $15 billion, from memory, was the budget deficit we inherited.

I sit here and a smile hopefully that all this rhetoric we are hearing from the other side will actually change for the good for the long term and that never again will we see small businessmen and business women obliterated by a shocking lack of understanding of economics. Despite all that, I still have a lingering doubt. I still see signs of the Labor Party of the past. I still hear words that alert my inner senses when they talk about taxing conspicuous consumption. Is someone who lives at Gunnedah, Goondiwindi, Birdsville or somewhere in the outback or on a blacksoil plain and who buys a four-wheel drive vehicle worth more than $55,000 guilty of conspicuous consumption? It sounds like they are. Are they guilty of conspicuous consumption if they need that vehicle to get their children to school every school day and so that they can get out their front gate every working day if it rains, or if it is so dry that the bulldust is knee-deep? It sounds like they are. And if they are guilty of conspicuous consumption then there is only one thing a good Labor government can do and that is tax the living daylights out of them!

We were asked by the member for Lindsay what we believed about this bill. I will tell you one thing I believe in, and I know the opposition believes in: we believe in lowering taxes. That is our record. That is the record of the previous government in the 11½ years that we sat on that side of this parliament. We lowered taxes. We lowered taxes for ordinary Australians—not just for working families but for ordinary Australians. Whether they were self-funded retirees, single professional people or single unskilled people, Australians enjoyed a lowering of the tax rates. Already we have seen that process reversed under the new government as they speak about fiscal responsibility and the need to produce a balanced budget and how we need to take some heat out of that part of the economy that can afford it. That is code for saying that if anyone does well and buys a vehicle worth more than the threshold, a vehicle worth more than $57,000, no matter what the reason, whether it is aspiration, a luxury or a necessity, they are automatically dumped into the category of the people in the economy who can afford to pay it—good old Labor Party tax-’em-whenever-you-can-get-at-’em theories that have come home to rule in this budget.

We had a great deal of build-up to this budget, a lot of hype. A government renowned for spin spun about as hard as you could spin anything. In fact, if it were cotton or wool you would have had not just yards but miles. There was so much spin that you would have had enough yarn to go around the earth a couple of times. But, when the Treasurer actually stood up at the dispatch box and displayed the budget, we found that it was just the same good old Labor Party budget: a high-taxing, high-spending budget. They are the ones who, when they were last in power, took Australia to where we went with regard to the economy, perhaps at the beginning with good intentions. We saw what happened last time they were in power and we are fearful that that will happen again.

Whenever anyone from that side of the chamber speaks, I continually hear words about a new tax they are introducing—and this is a very significant increase in a tax, from 25 per cent to 33 per cent. I hear words flow out about how we have to be responsible, how we have to maintain a surplus and how we have to make sure we continue to fight inflation and keep interest rates low. Of course, that is what the previous government did. It is not what the previous Labor government did but it is what the previous coalition government did. The Labor government seem to think that that sort of aspiration, that sort of mantra, is a carte blanche to put the taxes up wherever they can, wherever they think they can get away with it politically.

This increase in the luxury car tax is a sign of a tax-hungry government, a sign of things to come, a cash-grab against 105,000 vehicles owned by 105,000 working Australians. Why you decide that these working Australians are part of the economy that can afford it, as the member for Lindsay said, and that they should be taxed for conspicuous consumption, is beyond me. I think it is fair enough to have a luxury car tax. I think it is fair enough that there will be vehicles that people see as something they need and that they are able to afford and that therefore there is a 25 per cent extra tax on them, but there is no justification on the basis of conspicuous consumption, as the member for Lindsay put it, to increase that tax so substantially.

Some issues have been raised about the way in which cars in this category will be taxed the same whether or not they are environmentally friendly. I have to correct the member for Lindsay, who seemed to think there were no hybrid cars in this category. In fact, there are, of course; there is hybrid technology. If we look forward into the future of where motor vehicle production is going, there will be cars in this category of both hybrid and diesel technology that will be forced to pay the increase in this tax. There will be families in Australia who will be forced to pay this increase in tax simply because they need the vehicles, want to buy vehicles that have the latest diesel technology or need the size or capability of a four-wheel drive to get to work or to take their children to school.

We have seen repeatedly this idea in the minds of the Labor Party that nothing exists outside capital cities. The Prime Minister is still yet to deny that he made a comment saying that once you get outside Brisbane you can hear the banjos playing. Apart from taking deep offence to that comment, I can say that when a working family in an area outside Brisbane decides to buy a four-wheel drive they do so, in more cases than not, on the basis that they need a reliable means of transport. To call them ‘that part of the economy that can afford to be taxed at a higher rate’ is an affront to them in a double sense; having insulted them by insinuating that they are some sort of hillbillies, you then hit their pocket as hard as you can.

We are going to see from this government more increases in more taxes. There is no doubt in my mind, having listened to the debate since the budget and to where this government is targeting its attacks, that it will be increasing the taxes to those that it deems as being able to afford it. The member for Lindsay said that we need to be able to help those who are living hand to mouth on a day-by-day basis. It would not be those people, he said, who are buying vehicles worth more than $57,000. I suggest that he take another look at that. I suggest that, if he does not want to leave his own state, he just drive west, go into the member for Calare’s seat and talk to a few farmers out there—people pulling sheep out of drying dams and staring at barren paddocks which should be ankle deep in wheat. Ask them if they are living hand to mouth. Ask them if they matter. Ask them if they are guilty of conspicuous consumption. Ask them if they mind being part of the economy that can afford being taxed some more for the vehicle they use to get their kids to school. I would like to be there when the member for Lindsay does that, because he seems to have some preconceived position that the only people living hand to mouth are in his electorate or in metropolitan electorates. I accept that there are those people, but they live everywhere in Australia. They live in the electorates of Groom, Calare and Kalgoorlie and in inner suburban seats, such as those held by the likes of the member for Grayndler.

But just because someone drives a vehicle worth more than $57,000 does not mean they are an automatic candidate to have their taxes increased. Some of the people in the member for Calare’s seat are so not guilty of conspicuous consumption that they have not even been able to pay income tax. They dream of paying income tax and of having an income high enough to pay income tax. Perhaps when they reach that threshold and move forward far enough with a string of good seasons—which I, like every farmer and ex-farmer, dream of seeing—they may be guilty of some conspicuous consumption and of enjoying life a little. We know what happens then if you have a Labor government; you are going to get taxed some more. You are going to be part of that part of the economy that can afford it. In a perverse sort of way—and I am sure the member for Calare agrees—I hope that happens. I hope these people one day are guilty of conspicuous consumption.

If that time coincides with a coalition government they will find something very different happening. They will find a government in place, unlike the government now in place, committed to lowering taxes and to taking the burden off those people who achieve, who aspire, who want to be more successful than they are now and who want their children to be more successful than they are now. They will not be looking over their shoulders every minute of the day wondering what tax they are going to face next just because they have succeeded.

One hundred and five thousand people, most likely 105,000 families—people who aspire to increase their wealth and aspire to a better standard of living—are going to pay more tax as a result of this bill. They are the culture of aspiration and the people that the previous government encouraged. We wanted everyone to increase their wellbeing. We as a government saw increases in real wages of 20 per cent. That is a pretty stark contrast to what we saw from the previous Labor government, where real wages fell, despite the efforts of the minister opposite, the Parliamentary Secretary for Defence Procurement. Having been part of a union in my past life, good luck to you; you have done a great job in that profession. Along with strong union movements, the best way to increase wages is to increase the economy, and that is what we did. We increased real wages. Then, having increased real wages, we lowered taxes. We are seeing here a reversal of one part of that trend already and, with other parts of this new government’s policies, we will probably see a reversal of the other. Already we have seen a budget handed down that is forecasting job losses—I cannot say that I have seen that before—which must have been a bit of a shock on budget night to the working families that this government claims to represent.

The luxury car tax bill is an indication of more to come from the Labor Party. Despite their best intentions—despite the practice that I know the Treasurer will have subjected himself to and despite the pretence of economic conservatism that they have embraced, along with the rest of their spin—deep down they are the same Labor Party. They are the same Labor Party that increases taxes wherever they think they can until they reach a point where they just have to increase taxes for everyone. We are in the middle of a very important debate about petrol, about the price of petrol, about whether or not the price of petrol should be lowered by 5c a litre and about whether or not government should accept some of the pain that drivers—and not just the drivers in this category—of motor vehicles in Australia will experience. We know that the Labor Party has form on fuel excise. We know when the budget got so stretched they introduced not a 5c a litre cut but a 5c a litre increase. That is where it ends up. This is a sign of things to come. It is a sign of a tax-hungry government who have pulled this one out of the air. They did not tell the electorate in the election campaign, ‘One hundred and five thousand of you who buy vehicles this year will be paying increased tax.’ This was not part of their election policy. They have decided that they now have to embark on a process where they tax those people who, in the words of the member for Lindsay, are ‘conspicuous consumers’. This will be something we will see a lot more of.

We are opposed to increasing taxes. As an opposition we are opposed fundamentally to that. This legislation is bad legislation. This tax grab is a bad tax grab. This issue has not been thought through. The Labor Party admitted that this morning. There are so many reviews running that I am amazed the Prime Minister has to set up another one, but apparently—or so I have read in the paper—he is going to review what impact this luxury tax will have. I will be interested to see what that says. I will be interested to see what the Senate says. This is bad legislation, this is a bad tax and this is a sign of things to come.