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Monday, 22 September 2008
Page: 5207


Senator FIFIELD (2:25 PM) —My question is to the Minister representing the Treasurer, Senator Conroy. How much money did the Australian Taxation Office have to repay to car dealers as a result of the recent KAP Motors Federal Court case? Did the government give any undertakings to the car industry that it would not seek to penalise them as a result of this court case?


Senator CONROY (Minister for Broadband, Communications and the Digital Economy) —That is a very specific question, Senator Fifield. I will get a specific answer on that detailed question and get it to you as soon as is practicable.


Senator FIFIELD —Mr President, I ask a supplementary question. This may assist the minister. Isn’t it a fact that the amount ordered to be repaid—roughly $500 million—is very similar to the $550 million tax imposed by the government on the car industry just 10 weeks after the case was concluded? Will the minister deny that the Treasury advice on increasing the luxury car tax referenced the KAP Motors decision? Isn’t it a fact that the proposed luxury car tax increase is simply a case of payback?


Senator CONROY (Minister for Broadband, Communications and the Digital Economy) —Claims that this important budget measure is linked to the government closing off a loophole in the GST law are incorrect and misleading. The government is fixing a loophole in the law that allows businesses to get GST refunds they do not deserve. This loophole was revealed by the Federal Court decision in KAP Motors that allowed motor dealers to have a GST refund without passing it on to consumers. To avoid disadvantaging these taxpayers, who the court decided were entitled to a refund, we changed it to ‘going forwards’. As the opposition should know, all GST revenue is paid to the states and territories. Therefore, the Federal Court decision has not had impact on the Commonwealth budget.