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Wednesday, 30 November 1960

Mr CAIRNS (Yarra) .- It seems to me that this proposition goes to the very root of the matter before the committee. The purpose of the Government in imposing additional sales tax on motor cars is to reduce the number of motor cars imported into, or produced and sold in, Australia. If the Government does not succeed in bringing about that reduction, the purpose of the measure will have been defeated. This is not the first time that the Government has introduced an important economic proposal and has been in some doubt about the results and consequences of it. The Treasurer (Mr. Harold Holt) has given us no definite information. He has said that he does not think the revenue will be much affected. If that statement means anything, it must mean that the value of motor cars sold will drop by something like one-third in the coming months. Is that what the Treasurer's proposition means? As the Treasurer, who is sitting at the table, is not paying any attention to what I am saying-

Mr Harold Holt - I know what you are doing; you are stone-walling the bill.

Mr CAIRNS - There is no stone-walling. This is a fundamental question. We want information and so also do the people. For far too long we have not known, and the people have not known, what the Government intends, and that leads us to believe that the Government does not know what it intends. No Government speaker has given any assurance on this matter; indeed, some Government speakers have said there will be no reduction of activity in the motor car industry, and nobody will be put off.

Mr Harold Holt - I have not said that at any stage.

Mr CAIRNS - You have not said it, but your supporters have, and you listened with great approval to one of them yesterday. I suggest to the Treasurer that he should rise afterwards and give an explanation and not try by way of interjection to make a statement that we cannot determine.

Supporters of the Government have said that there will be no reduction in activity in the motor car industry as a result of the increase in sales tax. The Treasurer said, a few moments ago, that he did not expect the revenue from sales tax would be changed much one way or the other. Does that not involve the proposition that the value of motor cars sold in the coming months will fall by about one-third?

If the tax is increased by one-third, and if the Government collects the same amount from the tax, it means that the figure on which the tax is levied has fallen by onethird. Is that not a fact? Is not the Treasurer anticipating that the number of motor cars sold on which sales tax is levied will fall by one-third? If so, how can that happen unless the volume of cars manufactured in Australia falls by the same proportion? What impact will this have on the industry and those associated with it? If this proposition is a factor in the Treasurer's reasoning, honorable members and the people have a right to know what is involved in his reasoning. We are left in the dark about this proposal, just as we were in February last year, when economic measures were introduced.

The Treasurer was forced to admit, when introducing these proposals, that the increase in bank credit of £150,000,000 was something he had not reckoned with. How much of these proposals has he not reckoned with? In the circumstances, any one would be justified in opposing the proposal before the committee.

Finally, we have a right to know. If the Treasurer's propositions are as he stated them, does he anticipate there will be any change in revenue from sales tax? If he expects a change, does that not involve a decline by one-third in the value of motor cars sold? If so, what other effects on the Australian economy does he anticipate, and in what way has he provided for those effects?

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