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Tuesday, 14 June 2011
Page: 5921


Mr RAMSEY (Grey) (20:29): I rise to address the Taxation of Alternative Fuels Legislation Amendment Bill 2011 and accompanying bills. There are a number of proposals in these bills, but the most striking is the increased tax on LPG. This is a very confusing message that the government are sending to the Australian public on this issue, and it is associated with many confusing messages that the government are sending to the public. The Australian public is really struggling with the consistency. There was a time when the government in the last parliament wanted a Pacific common market but then they did not. They wanted Grocery Watch but then they did not. They wanted to totally take over the health system and now we do not really know what they want to do. I am not sure that they know either, but we can be absolutely certain that they are not taking over the health system in Australia. They wanted to put a tax on all mines but then they did not; they only wanted to put a tax on iron ore and coalmines. Even though we have seen a draft bill, we are still not too sure about what they want to do, but it certainly has not been a consistent line.

There was a time when the government were going to build us a national broadband network for $4½ billion of taxpayers' money but now they are planning to spend $50 billion of taxpayers' money on the NBN. There was a time when they wanted to be soft and cuddly to asylum seekers but now apparently they do not—in fact, they want to send them to Malaysia. That is a pretty confusing message. There was a time when the government were in favour of an ETS but then they were not. It is approaching the 12-month anniversary of the night of the long knives and the minister at the table would well remember that night. In fact, I saw his staff at the front of his office taking a photo of his name because they knew he would be shifting after the night of the long knives. It was a bit embarrassing when I caught them in the corridor.

Mr Bradbury: I rise on a point of order, Mr Deputy Speaker. The member has not even made the slightest effort to try to address the substance of the bills. The matters are of no relevance to the bill and I draw your attention to that.

The DEPUTY SPEAKER ( Hon. Peter Slipper ): There is no point of order. I call the honourable member to continue speaking.

Mr RAMSEY: At a time when the government are trying to introduce a carbon tax that will stop Australians emitting so much CO2, they are going to increase the tax on one of the products that does precisely that. It is pretty hard to follow the logic, but it does fit with the track record of the government.

In the last four years of this government, and the last two years of the previous government, the Australian taxpayer has pumped a bit more than half a billion dollars into LPG conversions. Now the government, having invested that half a billion dollars of taxpayers' money in LPG conversions to make for a cleaner Australia, are going to ramp up the costs for those who have the LPG conversions by 12½c or 20 per cent and discourage its use. There is another correlation here with the government's mismanagement of various things in the economy, and this decision will probably end up totally emasculating another industry through clumsy, short-sighted—

Government members interjecting

Mr RAMSEY: Fair enough, they might challenge me, but let us think back about the home insulation industry. Three years ago it was a vibrant industry. I knew people who were in the industry and making a good go of it, but now those businesses are on their knees as a result of government mishandling of public policy. The latest knee-jerk reaction concerns the live cattle trade, and there will be other times in this House to debate that issue. But, in short, the ban on the trade will do damage to our international relationship with Indonesia, including with the workers at the good sites who will be unemployed. Indonesian feedlots operating at best practice will be out of business. Then there are threats from things like foot-and-mouth disease coming into Australia. There are 700 Indigenous workers in Australia whose jobs are under threat, along with the mustering companies that have had to park their helicopters. I can go on and on and on—

The DEPUTY SPEAKER: The honourable member for Grey ought not to go on and on and on because we are talking about Taxation of Alternative Fuels Legislation Amendment Bill 2011.

Mr RAMSEY: Of course we are, and I am concerned about the government's handling of the impact on the industries that are installing LPG. In that case, I will leave alone the rooftop solar installers. Hundreds of companies have built an industry around installing LPG conversions, and we are given to believe that three in Victoria have already closed shop. The industry would have thought it was on solid ground when making its investment decisions. It would have thought: 'Australia is looking for a cleaner future and for a lower CO2 emissions future. We might invest a bit of money in a low-CO2 alternative. We will invest some money in gas and clean up the nation's cars.' You would have thought it was a rolled gold investment, but things have changed now and it is not a rolled gold investment. The government is planning to change the riding rules and that decision is already impacting on those industries.

On top of that, and as previous speakers have pointed out, this decision will impact on families. It is my experience, and to my knowledge there is no empirical evidence to back this up, that those who have LPG gas conversions are more likely than not to come from a lower income group. Apart from the taxi industry and those people in business, there are many ordinary Australians who choose LPG as a low-cost alternative. Many are running pretty old cars. I often run into people who are touring around Australia and pulling a caravan who say: 'This is great because I can do it on LPG. I am saving a few bucks as I go around.' I think those Australians will be very angry about this decision. They have already decided this is their low-cost alternative and feel pretty good about it because they were making the environment a bit better as well.

The information I received about South Australia shows that we are the second highest per capita adopter of LPG technology under the government programs. In fact, one in 44 individuals made the decision to access the government program to convert their vehicles to LPG—just behind Victoria where one in 39 accessed the program. In South Australia, almost 36,000 vehicles have been converted under this scheme. You would think we should continue to encourage the adoption of LPG, but if this legislation is passed it will mark a move in the opposite direction. You can understand why a government may want to phase out the subsidies that go with the installation of LPG equipment, but to undercut the guiding mechanism that allowed it onto the market at a cheaper rate seems nonsensical.

More than just small consumers will be affected; 90 per cent of Australian taxis use LPG, as do many buses. Those people who use the buses and taxis are not often the people who own the Mercs and the Audis; they are not often people at the top end of the income stream. The people who use public transport, by and large, are normal workers and those on lower incomes. This tax grab will impact on their cost of living because bus fares and taxi fares will have to rise. And it comes at a time when there are incredible cost-of-living pressures around Australia. In my own state, and probably in the rest of Australia as well, the cost of water will double in the next two years. That was announced in the recent state budget. Electricity is likely to double over the next five years. I think those figures were compiled before factoring in a carbon tax. Council rates will typically rise around 10 to 12 per cent this year, and the cost of fresh food is rising quickly. And now there will be a 20 per cent tax grab on the fuel of choice for a significant portion of the population. This is a new tax the Australian public have not been consulted about. We well remember the election of this government as fiscal conservatives and the promise of no new taxes. Since then we have had alcopops, proposals for mining taxes, flood levies and talk again of a carbon tax. These are not little taxes; they are big ones that affect the price of everything. It is not a bad list, but just imagine if the Labor Party were a party of high taxes—heaven forbid!

I have repeatedly said that whatever we do about CO2, whether it be a carbon tax, an ETS, direct action or another scheme, or a combination of all those, it will achieve nothing unless there is a change of behaviour. If an $11 billion tax to redistribute wealth does not change behaviour as far as CO2 emissions go, it will achieve nothing. But a tax on LPG will change behaviour; however, it will change behaviour in the wrong way. If we look at these things in the broad sense of changing behaviour, you can put them into three categories. One is where an industry can change and you ramp up the cost of CO2 emissions until they reach the point where they say, 'It will be better for us to change our behaviour.' In the case of coal electricity, it has been mooted that that point might be $60 a tonne. On the other hand, you may have industries, as in my electorate at Port Pirie where there is a lead smelter and at Whyalla where there is a steel mill, which cannot change their behaviour because the physical act of making these products includes a CO2 cost. In the case of car fuel, you can change behaviour, but if you put a tax on the cleaner alternative motorists will revert to a product which will put more CO2 into the atmosphere.

The government would say that this is part of running a responsible budget, that they must make savings and that the half a billion dollar tax that they will raise from LPG is important to the budget. Fair enough, they should run responsible budgets. But there will be a $50 billion deficit this year and a $22 billion deficit next year, so the government hit motorists up for half a billion. How did we get to this stage? If it had not been for the government's chronic mismanagement in the first place with the sorts of schemes already mentioned—and I will not run through them again; I will not test your patience, Deputy Speaker Slipper—they would not need this half a billion dollars.

There are four bills in this package of legislation and the government have presented them as a group. We get a little bit of the good and the great big slab of the bad at the same time. The good are the bills that preserve the taxation treatment of renewable fuels and the bad is the targeting of the LPG industry with a 20 per cent increase in tax for motorists.