MOTIONS – Taxation

At the request of Senator McKenzie, I move: That the Senate expresses its concern at the Albanese Labor Government’s announced family car and ute tax that will drive up the cost of new cars by up to $25,000 and the cost of living for not only the people of Dunkley, but all Australians. It is a shocking indictment of the government that they have constantly told us they’re going to do something about the cost of living, do something about the pressures that Australians face, yet they continue to simply bring in more and more taxes on the Australian people. One of the most pernicious ones they are introducing at the moment is a new car tax, a new tax and credit scheme that will apply to the purchasers of all cars in this country, which the car industry themselves say will push up car prices in Australia by thousands of dollars, indeed tens of thousands of dollars, for some of the most popular cars sold in this country. Why is it that the government, who say they are
focused on the cost of living, are imposing this unnecessary, aggressive reduction in emission limits for Australian cars which will only make things harder for Australian families? I will take a little time to explain to people what the government is proposing here. They are proposing that new limits be set for the carbon dioxide emissions that come out the tailpipes, they say, of cars sold in this country. They want to reduce those limits by just over 60 per cent over the next five years alone. This is the world’s most aggressive emission-limit program that has ever been introduced. The government constantly say, ‘The United States has a program like this, and there hasn’t been a big impact on the availability of cars or the price of cars there, so there won’t be here.’ But the devil, of course, is going to be in the detail. It’s not enough just to point to another country and say, ‘They have a scheme that’s similar to ours, and therefore our scheme will be fine.’ What if your scheme is
much more stringent than theirs? What if the penalties for breaching that scheme are much higher? What happens then? That’s where we have to go to the detail which the government are refusing to release. They’ve refused an order of this chamber to produce the modelling behind the scheme. They’re refusing to go through any of the details and respond to the industry’s claims with any form of detail. Their ministers don’t seem to be across the actual calculations that are behind the industry estimates. So it is important to go through some of those calculations, which are actually quite simple and not hard to explain. But the government won’t even engage on that level of detail. One of the most popular cars sold in Australia last year—I think it was the second most popular last year—was the Toyota HiLux. A lot of people buy a Toyota HiLux as a family vehicle these days. It has a tray in the back, but you can fit a family of four in there as well—and, of course, a lot of tradespeople have to use these vehicles just to do their jobs. That vehicle, the Toyota HiLux, emits 188 grams of carbon dioxide per kilometre. The government wants to reduce these limits by about 60 per cent. After five years, by 2029, the prescribed limit will be 81 grams per kilometre for the Toyota HiLux. That Toyota HiLux will therefore be 107 grams over the limit, and the
government wants to apply a penalty of $100 per gram. It’s very simple: 107 times $100 is $10,700. A $10,700 cost will be imposed on the second most popular car in this country. The government says there’s a similar scheme in the US. But, if you actually look at the US scheme, which I don’t
know whether the government has done, the US scheme is not actually based on carbon emissions. The efficiency measure is based on gallons per mile—but we’ll leave that to one side. The US scheme over the last five years—the same time frame the government wants—has reduced efficiency limits by only 25 per cent. That is half of what the government is proposing to do. So this scheme is already twice as aggressive as what the US has. On top of that, the fine that has been applied in the US scheme is a third of that A$100 fine in equivalent terms. We’re proposing a
scheme that doubles the efficiency obligations on car manufacturers and penalises them triple what they have to pay if they exceed those limits. No wonder our local industry is concerned. No wonder Toyota themselves came out yesterday and expressed serious concerns about the availability and price impacts this will have on the Australian vehicle market. We must remember, of course, that we are a relatively small market here in this country. Some manufacturers simply may not supply cars if there is such a price impact to doing so. They might not be able to sell them if they have to charge an extra $10,000. We learnt this week as well that Ford were actually considering pulling out of
Australia when they ceased manufacturing vehicles here. That was not because of any tax scheme but simply because we were a small market and they thought it might not be worth their while to bother being in this country. We’ve got to be a bit careful here in thinking that we are somehow protected from the competitive pressures that occur around the world. If we impose this kind of scheme without getting across the detail, there may be really perverse impacts on Australian families and Australian businesses who need these vehicles to do their jobs. When these figures were put to the government in Senate estimates, they did not dispute the figures themselves. They simply said that car manufacturers would adjust the cars they put up for sale. Those are the words of the departmental officials: they will adjust the cars that are available for sale. That means that the Australian people will have to adjust the cars they buy. This is a scheme which will tell Australians what cars they can buy and what cars they can drive around in. For some businesses, this scheme will limit their ability to go about their job, to earn a living for their family, because there simply aren’t the cars available that have emissions below these limits. There are no battery vehicles that can replace a car like the Ford Ranger in a usable way right now. There are some vehicles in the US that are trying to do this, some utes like the Ford F-150 Lightning. They’re being pulled off the market right now. The demand in the US has not been strong. Ford are actually losing thousands of dollars per vehicle sold. They lost A$4.5 billion selling the Ford F-150 Lightning over the last couple of years. In New Zealand, these vehicles have been taken off the market completely. There is not a market for them. The market is not ready and the technology is not ready. There’s no point in our country going too far beyond this and imposing an unnecessary cost on the Australian people.
You’ve got to wonder why the government are doing this. Why are they doing this? There seems to be a level of cultural cringe against people who just want to drive a big vehicle in this country. As I said, some people have to do it, but other families just choose to. They want a big vehicle for the safety aspects, for large families, to be able to use a ute on their weekends to clear their gardens, and to do basic things in life. Maybe they’ll sometimes tow a caravan or a horse float to enjoy the wonderful country we live in and the opportunities it provides the people who live here. This is a tax that could fundamentally change the Australian way of life. We have a way of life that allows us to enjoy the outdoors, to go off-road or go and drive on the beach where I am. Lots of people love to go up to Five Mile Beach and drive along there. That won’t be possible in an EV. You’ve got to drive a long way to get there. You could get bogged. You could get stranded. You don’t want to do it in an EV. People need a car to do that, to enjoy themselves. What is wrong with that? Of course, none of this in and of itself is going to save the planet; indeed, this scheme is so naive and flawed that
it looks only at so-called tailpipe emissions. It penalises only vehicles that have high carbon emissions out of the tailpipe. It doesn’t factor in the fact that electric vehicles have a lot more carbon emissions in their construction. A report by Volvo just a few years ago showed that in our type of electricity system, which is still dominated by fossil fuels, you would have to drive an electric car charged in our system for about 10 years before it would become carbon positive, compared to its equivalent internal combustion vehicle. In all likelihood, then, promoting electric vehicles while we have a fossil fuel system will actually increase carbon emissions, not decrease them, because
most people don’t hold on to their cars for 10 years or more. It is completely and utterly absurd.
The government have clearly not done the work for this scheme. They have not taken the time or had the diligence to sit down and go through the figures properly. This belies their promise that, somehow, they are focused on the cost-of-living pressures facing Australians. They must go back to the drawing board. The Biden administration is doing that. It is true—I’ll give the government their due—that the Biden administration had proposed to cut its emission limits by an amount similar to what the government has chosen for the next five years. That’s not in recent times, so you can’t use the evidence of the US today to judge its impact, but in the future the Biden administration was going to do something similar. That was the government’s justification for their limits. The problem with the government’s argument is that, since they announced this policy, the Biden administration have backed down. They’re going to withdraw that particular regulation. They’re doing so because manufacturers in the US raised issues, just as manufacturers here in Australia are doing, and the Biden administration have listened to the manufacturers in the US and changed tack. The government must do the same here. If they don’t, it is clear they do not actually care about Australians’ cost of living. They are simply on an obsessive pursuit to chase Greens preferences and to try to single-handedly change the temperature of the globe. It will be only the Australian people who suffer if they continue on this obsessive route.