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Thursday, 2 June 1994
Page: 1227

Senator SPINDLER (4.51 p.m.) —The Australian Democrats will support the Sales Tax (Exemptions and Classifications) (Two Wheel Drive Vehicles with Jeep, Platform, Pick-up or Utility Body Type) Amendment Bill 1994. The bill seeks to extend the sales tax exemption on four-wheel drive jeeps and utilities to two-wheel drive jeeps and utilities. Currently, the tax law has two exemptions from sales tax on vehicles. The first is a fairly narrow one—any motor vehicles used exclusively in primary production on farming premises; secondly, four-wheel drive vehicles with a body type of a jeep, platform, pick-up or utility used in carrying out activities in the agricultural industry.

  This bill is aimed at the second exemption, to extend it also to two-wheel drive jeeps. It rests on two arguments as far as the Australian Democrats are concerned: firstly, that two-wheel drive vehicles are of as much use on a farm as four-wheel drive vehicles and have, in addition, the advantage of lower fuel consumption, which is something we would be interested in. The second argument is one that touches on our automotive industries: all four-wheel drive vehicles are imported, whereas both Ford and GMH in Australia are manufacturing a considerable number of two-wheel drive utilities.

Senator Watson —Of the one-tonne variety.

Senator SPINDLER —Of the one-tonne variety. This is an area of the Australian production of motor vehicles which can be expanded once this amendment goes through and the competitive position of two-wheel drive utilities is improved. Clearly, as a matter of policy, we should support local industries. While there is a loss to government revenue which is estimated at $8.3 million and a loss of customs revenue of $2.2 million, this will in part be recouped by the additional sales and the sales tax and other taxes levied on local production.

  There is, of course, the additional intangible benefit that is not reflected in these specific tax figures, which is that more jobs are provided for Australian workers in this industry and that other expenses which inevitably follow, such as unemployment, are reduced. For all of these reasons, the Australian Democrats will support this bill.