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Wednesday, 28 October 1964

Senator HENTY (Tasmania) (Minister for Civil Aviation) . - I was interested in the comments of Senator Ridley which could be miscontrued. I do not think he meant to convey that the increase of 2i per cent, in sales tax on motor cars to 25 per cent, does not apply to imported vehicles although that might have been inferred from his speech. The fact is that the higher tax applies to all motor cars whether they are imported or made in Australia.

Senator Ridley - I said that the effect would be different.

Senator HENTY - I know what the honorable senator said, but I want to make it clear for the record that the new rate of sales tax applies to both Australian and imported cars. The honorable senator said that the increase in sales tax would yield £5 million in a Budget of £2,500 million.

I remind him that the revenue of £2,500 million for which the Government has budgeted is made up of a number of items, and this is one item of revenue. The Treasury has never claimed that this impost would in any way dampen down the sales of cars. The Department of the Treasury claims that this increase of 2i per cent, in the sales tax on motor vehicles is a revenue measure to increase the income of the Government by £5 million for the work of the Government as shown in the Budget. That has been made quite clear. 1 want to comment briefly on the statement by Senator Ridley concerning the manufacturing organisation which announced recently that it would spend £20 million in setting up a factory in Australia. The honorable senator said this was no credit to the Government. I am sorry that I cannot agree. The Government has announced a policy of building up gradually the Australian content of motor vehicles manufactured in Australia. This organisation had a market in Australia which it wanted to keep. To do so, it had to have up to 95 per cent. Australian content in its motor vehicles, so it decided to spend £20 million to manufacture its vehicles in Australia. This was done purely because of the policy of this Government to bring about within the next five years an increase in the Australian content of motor vehicles assembled in Australia.

Senator Ridley - The Government is a quarter of a century behind the times. The Chifley Labour Government had the same plan.

Senator HENTY - Whether wc arc a quarter of a century behind the times or not the fact is that this is the reason why the company is going to set up a plant in Australia. It had to do so. This was because of the Government's policy of requiring, over the next five years, that motor vehicles, assembled in Australia should have 95 per cent. Australian content. The honorable senator said that when there were variations in the sales tax on motor vehicles, the price was affected. He said some people bought at the wrong time and they lost. Some people buy at the right time and they win. Before the Budget was introduced, sales of motor cars were at a record level. Those who bought then saved £25. They find now that their motor car is worth £25 more than it was, so there are many satisfied buyers. Maybe if sales tax is reduced in the next two or three years somebody who has bought at the wrong time will find that the price has gone down. These are normal things which happen every day in the life of a government. Duties and other imposts affect prices. Sometimes when a person buys goods he benefits or suffers, according to the luck of the draw. Those who bought motor vehicles just before the Budget was introduced when a record number of cars was being sold find that £25 has been added to the value of their vehicle.

Question resolved in the affirmative.

Bills together read a second time, and passed through their remaining stages without requests or debate.

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