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Tuesday, 17 November 1959


Mr HAROLD HOLT (Higgins) (Treasurer) . - by leave - I move -

That the bill be now read a second time.

The sole purpose of this bill is to take legislative action to prevent partial avoidance of rr.}°s tax which his arisen from a marketing procedure adopted by a number of manufacturers of the station wagon type of motor vehicle. The existing law requires payment of tax at the rate of 30 per cent, in respect of motor cars designed primarily and principally for the transport of persons, including station wagons, estate cars and vehicles similar in design to station wagons or estate cars, but not including delivery vans. The latter bear tax at the rate of 16J per cent., which applies to commercial type vehicles.

A number of manufacturers have adopted the practice of selling a vehicle which is usually described as a station van or an estate van. Although these vehicles have the external appearance of a station wagon or estate car, they differ from the station wagon or estate car in varying degrees, but generally in the following respects: -

(a)   There is no actual rear seat;

(b)   A protective barrier is installed behind the driver's seat to prevent damage from goods carried in the rear;

(c)   The well provided for a rear seat is covered by pieces of wood or metal attached to the framework of the vehicle;

(d)   When the well is so covered there is insufficient height to install rear seats and a level surface, suitable only for the carriage of goods, is provided from the back of the driver's seat to the rear of the vehicle;

(e)   The rear side doors and windows are locked in a fixed position and the cavities for door and window handles are covered by a metal plate or by other means; and

(f)   In some instances, there is no trim on the rear side panels.

These vehicles are sold ostensibly for commercial use, but they are readily convertible into station wagons, by means of a conversion kit which is separately marketed for that purpose. In the case of some makes, all the vehicles are converted, and, taking into account all of the makes involved, there is evidence that no less than 85 per cent, of the vehicles sold are converted. In some instances, it is understood, the conversion is effected by the user of the vehicle, but in most cases it would be done by a retail motor car service station.

It was found necessary to acknowledge that, at the time of the sale upon which the sales tax liability arises, these " station vans " are not within the categories to which the rate of 30 per cent, applies. Tax has, therefore, been paid on them at the commercial vehicle rate of 16$ per cent. only. The conversion kits used in transforming the vehicles into station wagons have also borne tax at 161 per cent., that being the rate applicable to parts for motor vehicles generally. When the conversion is effected for an owner by a person in the motor vehicle trade, tax at the rate of 30 per cent, has been payable only on the charge for the service of conversion.

By these means, it has been possible to obtain a fully finished station wagon subject to considerably less tax than is intended to apply to such vehicles. The difference in tax on some models has been as much as £188 and it is estimated that the loss of revenue has been of the order of £300,000 per annum. If legislative action is not taken on the lines now proposed, it is understood that the larger manufacturers, who have not yet engaged in this marketing practice, will fall into line with their competitors. This would cause such an increase in the number of vehicles affected that the revenue loss could rise to £3,000,000 per annum.

As I previously mentioned, the convertible vehicles are basically station wagons, and are of a type which does not lend itself to the carriage of goods generally. Thus there is no substantial demand for the vehicles for commercial use, and most business people who desire vehicles for the delivery of goods find their needs much more satisfactorily met by the use of a commercial vehicle such as a panel van or delivery van, with its greater space and more utilitarian finish.

It is understood that production of the convertible type of station wagon will be discontinued by all except two of the current manufacturers when the bill becomes operative, but as suitable other types of delivery vehicles are readily available, it is not expected that any inconvenience will be suffered by the business community.

As the convertible vehicles are basically of the station wagon type, and are intended for conversion into that type of vehicle, it is the view of the Government that they should bear tax at the passenger car rate of 30 per cent, in the same manner as fully finished station wagons and passenger cars. This is the effect of the present bill, which I commend to honorable members. The amendment will be operative in respect of vehicles sold by wholesale on or after 14th December, 1959.

Debate (on motion by Mr. Crean) adjourned.







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