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Wednesday, 27 August 2008
Page: 3903

Senator CARR (Minister for Innovation, Industry, Science and Research) (3:04 PM) —During question time there was a dispute between Senator Abetz and me concerning the threshold figure for the luxury car tax. The threshold figure was $57,123 at the time of the budget. It has since been indexed to $57,180.

The PRESIDENT —Order! Senators standing in the chamber is disorderly when we are seeking to have a minister respond or any senator participate in a debate. Would someone remind Senator Boswell and Senator Evans that they are standing?

Senator CARR —A further issue was raised in relation to the introduction of the luxury car tax. I confirmed that it was introduced in 2000 at the time of the introduction of the GST. Prior to that time there had been a differential treatment of luxury vehicles—since 1979 under a coalition government—when a luxury car tax could not gain the full benefits of depreciation due to the cap on the depreciation amount. Under the Hawke-Keating government the differential treatment was via a wholesale sales tax rate. It was a differential rate in the wholesale sales tax that led to the introduction of the luxury car tax at the time of the GST’s introduction so that luxury cars did not fall more heavily in price than other vehicles. I think that clarifies the matter.