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Monday, 29 May 2000
Page: 16393

Mr SECKER (1:27 PM) —It gives me great pleasure to support this motion moved by the member for Boothby, who continues to represent the views of many of his constituents who are affected by the car industry. When the previous speaker, the member for Kingston, visited that paddock at Mitsubishi I wonder whether he noticed that there were a few kangaroos short, because he must have been very embarrassed to come here today to try to defend Labor Party policy, or lack of policy, because their policy, or lack of policy, is indefensible. Virtually all Australians are affected by the car industry as consumers and employees. The new tax system provides huge benefits to consumers via cheaper cars, cheaper spare parts and cheaper running costs, which the opposition continually fail to acknowledge.

The vehicle industry plays a very important role in the whole economy of South Australia in terms of manufacturing, employment, value adding and exports, as the member for Boothby has so clearly shown in the facts he presented to this parliament. Its importance has been recognised by this government and previous ones through different car plans and various enhancement programs, especially for export capabilities. This motion recognises that one quarter of all wholesale sales tax revenue is raised from cars and components and this will be totally removed with all other wholesale sales taxes. For example, the 22 per cent wholesale sales tax on cars will be removed and replaced with a 10 per cent GST. We have already seen the benefits of this competition leading to cheaper cars in the lead-up to the GST replacement tax for wholesale sales tax. A concrete example of this can be shown by the following figures.

If it costs $30,000 to produce a Holden Commodore or a Magna and the mark-up by the dealer is 10 per cent, equalling $3,000, and the present wholesale sales tax is 22 per cent, equalling $6,600, the final price to the consumer is about $39,600. Under the new tax system that vehicle will still have a mark-up of $3,000 but a GST of at most $3,300, making the final price to the consumer of $36,300—a saving of at least $3,300 on a new Commodore or Magna. To the holder of an ABN, Australian business number, the new tax system will lead to an even greater saving of at least another $3,300, making a total saving of $6,600 for a business. But that is just in the purchase price; the spare parts and running costs will also be cheaper. Not only that, the embedded and largely hidden wholesale sales taxes that occur in the production of that vehicle will disappear, thereby making the final initial production costs of the Commodore cheaper which makes the final price to the consumer even cheaper again.

One of the problems with the cost of new vehicles in the past is that it has led to Australia having an ageing fleet of vehicles. That means we have too many older vehicles on the road which are less safe and more polluting. Therefore, passengers and drivers will be safer as a result of these much needed tax reforms as they will find it easier to buy newer cars. Not only that; our whole environment will be safer because new vehicles are less polluting.

There has been a multitude of submissions presented to the Industry Commission which have called for the very action that this government has had the courage to take—that is, to remove these debilitating wholesale sales taxes and replace them with a broad based consumption tax such as the GST. Meanwhile, the opposition has played cheap opportunistic games over the whole policy of tax reform, knowing there is a need for it and having recognised this fact at least 15 years ago when Keating and the present opposition leader Beazley supported it. Unfortunately, the latter now has not got the ticker to act in the best interests of all Australians when it comes to tax reform or any other policy issue of note.

This motion from the member for Boothby also importantly recognises the enormous tax cuts to all Australian taxpayers, giving them even greater buying power, as well as to Australian business. With the average family $50 a week better off, and with business so much better off, the only possible reason for the opposition's cheap politics on this matter is not because it is necessary—as it is; not because we will all be better off, because we will—but because the Labor Party has no answers, no policy and no ticker for the hard decisions that we have had the courage to take. (Time expired)