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Tuesday, 25 November 1986
Page: 2652

Senator CHANEY —I refer the Minister for Industry, Technology and Commerce to new vehicle registration figures for October which are 25 per cent down on the same month last year, and to the fact that the January to October figure is the lowest since 1972. Is the Government concerned at this continuing severe downturn in vehicle sales? Has the Minister's Department, or any other department, yet made an assessment of the impact of the fringe benefits tax on the car industry? If so, can he confirm that the tax is having a significant effect on car sales, particularly on the fleet, business and commercial market, as found by the recently released survey by the Australian Automotive Dealers Association? If he cannot confirm that, will the Minister initiate an urgent review of the effects of the tax which the Automobile Dealers Association estimates has already cost 4,000 jobs in vehicle retailing?

Senator BUTTON —The figures to which Senator Chaney refers have been drawn to my attention. The answer to the question as to whether the Government is concerned about the figures is, of course, yes, the Government is concerned about the figures. The question goes on to try to attribute particular reasons to the downturn in the motor vehicle industry. We have been through all this over many months.

Senator Chaney —I asked whether you had made an assessment of the fringe benefits tax impact.

Senator BUTTON —If the honourable senator does not mind, I will answer the question in my own way. The answer which I have given over many months, and which I continue to give, is that there has been a very large and significant downturn as a result of a variety of factors. The downturn is particularly dramatic because 1985 was a record year for the Australian motor vehicle producing industry. The year 1986 was expected to be bad for a variety of reasons, including tax changes, the introduction of unleaded petrol, the general downturn in the economy and the effects, whatever they may be, of the fringe benefits tax. The most significant area of downturn is in the imported motor vehicle area as a result of the effects of the devaluation. That was to be expected. While the local industry has also incurred something of a downturn, it is in the sense of a beneficiary from the downturn in the imported elements in the motor vehicle market. In respect of whether an assessment has been made which produces any definitive result about the effects of the fringe benefits tax, the answer is no, it is largely a matter of impression and judgment. I refer Senator Chaney to one impression which was given by the Managing Director of the Ford Motor Co. of Australia Ltd, Mr Dix, on the Derryn Hinch show this morning. He was asked:

How much do you think the fringe benefits tax has hurt . . .?

He answered:

Well it's had an effect Derryn, when people ask me what's going wrong with the market . . . I look at it over the years and generally when there is bad news in one element of the market there may be good in the other, but this year when you look at the total market throughout Australia, rural, domestic, and metropolitan, you look at it between business use and private use, and there's adverse factors affecting all of it. So it is taking its share because business buying has gone down just as private buying has gone down, and just as rural buying has gone down.

Senator Durack —You are not saying something is wrong with the economy, are you?

Senator BUTTON —Senator Durack has woken up to the fact that the Government, as a matter of deliberate strategy, has wound back growth in the Australian economy. What an extraordinary discovery for the Deputy Leader of the Opposition in the Senate to make on Tuesday, 25 November 1986! It should be noted by everybody that Senator Durack has at last woken up to that fact.

Senator Chaney —The Government has deliberately wound back the economy?

Senator BUTTON —Senator Chaney has read the Budget Papers, has he not?

The PRESIDENT —Order! There are far too many interjections.

Senator BUTTON —Mr President, I am not worried about the quantity of the interjections; but the quality is appalling. I do not mind if they continue on that basis. Mr Dix is saying that there are many factors, as I have continually said in the Senate, for the decline in motor vehicle production. The fringe benefits tax is only one of them. In the interview Mr Dix certainly does not attribute the fringe benefits tax to be a major cause of the decline in vehicle production and registration in Australia in 1986.

Senator CHANEY —Mr President, I ask a supplementary question. I note the Minister's admission that there are adverse factors in all sectors of the market which his Government has brought about. I ask him: In light of the fact that the Australian Automotive Dealers Association survey shows that there has been a 21.7 per cent drop in the market overall sales and that in the fleet business and commercial vehicle market there has been a decline of 30.5 per cent, will he undertake a review to determine the extent to which the fringe benefits tax is contributing to the greater deterioration in the commercial market than in the rest of the market and examine whether something should be done about this factor, namely, the fringe benefits tax, which is totally within the control of his Government?

Senator BUTTON —I am quite happy to have officers of my Department conduct a review but I am sorry that I am not able to say that the result of that review would lead to the action which Senator Chaney suggests in his question. There has already been an adjustment to the fringe benefits tax in respect of motor vehicles. It is a departure from the Government's original intentions and a departure which I welcomed, but there will be no further change to the fringe benefits tax on the basis of any review, although if it is a matter of academic interest I am quite happy to have one conducted.