TAXATION OF ALTERNATIVE FUELS LEGISLATION AMENDMENT BILL 2011
June 14, 2011
Mr CHESTER (Gippsland) (19:18) – I rise to join the debate on the Taxation of Alternative Fuels Legislation Amendment Bill 2011 and, in doing so, will highlight what I believe is this government’s failure to provide relief for Australian families who are struggling with the increased cost of living.
This government is completely out of touch with everyday Australians. It promised before the 2007 election to reduce the cost of living. What we have seen is a succession of failures. We had Fuelwatch and GroceryWatch and failed government programs, such as the home insulation bungle which tragically cost four young men their lives. We had the Green Loans assistance program, under which the government trained upwards of 10,000 people with the false lure of a job that was never there for them. Then, of course, we had the blowout in the schools halls program and the government’s failure to achieve value for money. To make matters worse, this failure to deliver value for money has left the Labor government desperate for more tax revenue, so it is turning to the Australian people once more.
This Prime Minister talks about a year of decisions and delivery. Her only decisions seem to be the order in which she introduces each new tax and when to take delivery of more money from Australian families, who cannot afford another two years of this government’s mismanagement. Already this year we have seen the flood levy, which was imposed on people whether or not they had donated to the many thousands of Australians who suffered in the floods over the summer. The flood levy completely undermined the Australian ethos of voluntarily lending a hand to a mate in need. This Prime Minister is so out of touch that she thinks she can legislate mateship. We have also seen the government’s botched handling of the mining tax—and there is still a lot more to go in that debate—and the carbon tax, which will destroy jobs in regional areas, particularly in regional areas like the Latrobe Valley in the heart of my electorate.
The Minister for Climate Change and Energy Efficiency continues to stand up in this House and talk about so-called dangerous climate change and the thousand biggest polluters. It is as if every word has been focus-grouped within an inch of its life to make sure that the key messages get out: ‘We must always refer to dangerous climate change and to the thousand biggest polluters.’ In fact, this government is imposing a tax on about 22 million Australian households, who are apparently 22 million of Australia’s biggest polluters. Just today, we heard the coal industry express concerns about up to 4,000 jobs being lost under the carbon tax. I have had reports previously in my electorate relating to the prospect under the CPRS of 3,000 jobs being forgone in the broader Gippsland region. Families in my electorate do not want a household assistance package from this government. They want the decency of a job, to be able to attend their place of work and to earn income to pay their mortgage and pay off their car loan. They do not want this government’s household assistance package; they want to be able to go about their lives without having their jobs sacrificed on a whim of this government.
Now we have this fuel tax, which has been presented to the House in the form of this legislation. It will have a direct impact on the cost of living, particularly in regional areas. I will focus mainly on the LPG proposals, which go to the heart of the problem for regional motorists. We are talking about introducing a new fuel tax which will increase to 12½c per litre over five years. That does not make sense on several levels. To begin with, this government likes to talk a lot about its environmental credentials. It is estimated that a taxi run on LPG emits up to 13 per cent less in carbon emissions than a petrol run taxi. For a government that claims it wants to take action on so-called dangerous climate change, the hypocrisy in making an alternative, cleaner fuel more expensive and less attractive for people to use is obvious for all to see. This is a tax grab, pure and simple, and the government should not pretend otherwise. The hypocrisy and the policy inconsistency get worse when you consider the current incentives to increase the use of LPG as a transport fuel. That is not my stated intention. The AusIndustry website refers to the LPG Vehicle Scheme statistics:
The objective of the LPG Vehicle Scheme is to increase the use of LPG is a transport fuel. The Scheme provides grants for:
the LPG conversion of a registered vehicle; or
the purchase of a new LPG vehicle (this includes vehicles fitted with LPG at the time of manufacture and vehicles fitted with LPG after manufacture but prior to first registration).
As at 30 April 2011, under the LPG Vehicle Scheme there have been 283,512 grants paid. In terms of the LPG Vehicle Scheme grants statistics by state, you will see that Victoria, with 135,500, has taken up the scheme more than most. Even after Labor cut the incentives for the fuel conversion program, it still proved popular particularly, as I said, in Victoria.
The people of Gippsland have been some of the heaviest users of the grants program, given the extra distances motorists in my electorate travel. It is so popular in regional areas because our communities are faced with a high cost of personal transportation. They are doing everything they possibly can to reduce their household bills. The average vehicle in a regional area will travel further each year and motorists have the opportunity to recoup the conversion cost in a far shorter time. Under this exercise, the government is sending a very mixed message to the broader community. The scheme will no longer be seen as attractive because recouping the value of conversions obviously takes longer and motorists know the excise will only ever increase under a Labor government.
Some people would say that, at 12½c per litre, it will not have that big an impact on the rate of conversions, but the simple fact of the matter is that motorists will see this as just the beginning. They know that, whenever Labor need more taxes, they will be going back to the Australian people. They will have their hands in the pockets of the motorists of Australia and the LPG excise will only increase in the future.
This will also have perverse impacts on the autogas conversion industry and on various small business owners right across my electorate. I believe many others will suffer as a direct result and jobs will be lost in the community. There is no question that the impact on the wider community will be felt whether they have an LPG powered vehicle or not. I would like to refer to a statement by the President of the Australian Taxi Industry Association, John Bowe, in May this year, who highlighted the concerns of his industry particularly relating to increased costs. The ATIA has raised these concerns with all members of parliament and says:
The introduction of excise on LPG is at total odds with the Government’s policy on energy security and carbon reduction. Why tax an alternative fuel that will underpin our future energy needs, and is cleaner and greener than petrol and diesel?
LPG is a cheaper, greener alternative fuel choice the taxi industry. A taxi powered by LPG emits up to 13% less carbon emissions—
as I noted earlier—
than a petrol-run taxi. It is also up to 50% cheaper than petrol at the bowser.
If the excise is introduced many jobs in the tax industry could be lost. The increase in costs to many of our passengers will be unbearable. Our drivers and fleet operators will not be able to afford to absorb such a price hike either.
It is inevitable, if this excise is introduced, that taxi fares will also increase and have an adverse impact particularly on members of our community who, for whatever reason, are unable to drive themselves—through disability or age—and rely on the public transport system, which, in many regional areas, means the taxi system. In vast parts of my electorate the only form of public transport is the taxi.
Further, in his comments, John Bowe said:
Many taxi licence owners and fleet operators feel they were ‘duped’ into converting the vehicles to LPG and opting to use the greener gaseous fuel to run their business. The Government encouraged LPG conversions with rebates and other incentives. When taxi fleet operators opted to for LPG, they did so in good faith. They believed they were doing the right thing by environment, their business and customers.
If a carbon tax is imposed, a further 4.5 cents per litre would be added to the cost of LPG—a double whammy for those who can least afford it.
The excise on LPG will punish those passengers and consumers who are already struggling with the rising cost of living and want the alternative cheaper option.
As John Bowe said in his final comments:
We strongly believe that any excise will hurt the taxi industry, bring the LPG industry to its knees, and will hurt other industries and small businesses that rely on LPG.
Again, the regional areas will be most adversely affected, but that does not seem to bother those opposite. It certainly does not worry the Treasurer, who does not even bother to answer questions on this topic. I first wrote to the Treasurer on this issue in October last year on behalf of Mrs Patricia Thatcher of Boolarra, who was concerned about the cost of living. She had heard about the likelihood of excise coming into play in a few months time so she converted her vehicle to LPG. I had no reply from the Treasurer, but I understood that perhaps coming out of the election period he was very busy. So I wrote to him again in February this year but had no reply. I wrote to him on 19 May, but again there was no response whatsoever.
Apart from you, Mr Deputy Speaker Adams, a champion of a regional location, I fear this is the most city-centric cabinet imaginable. Regional Australia does not have a voice in the Gillard government’s cabinet. Issues like the increased cost of living for regional motorists are something they simply do not understand. You only have to look at the ministerial list to get some indication of this government’s lack of compassion and understanding of the issues affecting regional people. The Minister for Regional Development and Local Government, the Hon. Simon Crean, the member for Hotham, has his electorate office in Clayton. The Minister for Infrastructure and Transport—a very important portfolio for regional people—the member for Grayndler, has his office is in Marrickville.
The DEPUTY SPEAKER (Hon. DGH Adams) – Order! The honourable member needs to address the bill before the chair.
Mr CHESTER – Certainly. As I was saying, the increasing costs associated with LPG excise will have a direct impact on regional communities. The point I am making is that no-one in the cabinet is standing up and fighting against this LPG excise because none of the members of the cabinet actually live in and understand regional communities. We have the Minister for Sustainability, Environment, Water, Population and Communities, the Hon. Tony Burke, whose electorate office is in Kingsgrove in the heart of Sydney. Surely the Minister for Resources and Energy would stand up for regional communities, but his electorate office is in Preston—so why would he? The Minister for Agriculture, Fisheries and Forestry has his electorate office in Brisbane. Not a single member of this government’s cabinet lives and works in regional communities and has a deep understanding of the issues affecting regional people on a daily basis. Regional Australia simply does not have a voice in the Gillard government cabinet and these ministers simply do not understand the issues we face on a daily basis.
It makes no sense to be applying this tax to LPG along with CNG and LNG at a time when Australian families are struggling with an increased cost of living and the government is spending billions of dollars of taxpayers’ money on its efforts to reduce carbon emissions. The Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011 is a worthy bill and it has the coalition’s support, as other speakers have indicated. It is an interesting tactic to say the least that the minister has sought to combine all these pieces of legislation and then include a clause which basically says that the whole lot needs to pass or the biofuels industry gets the bullet. It is like trying to hold a metaphorical gun to the head of this legislation—pass the other three or the good one gets it. It is not so subtle a piece of political extortion to try and gain support for three pieces of legislation which are clearly contentious. The coalition had previously flagged its intention to oppose this new excise but by adding it to the support for the biofuels industry the government had hoped to wedge this side of the House into supporting its latest tax grab. I support the coalition’s decision to oppose the first three bills and I also welcome the amendment from the shadow minister to break the nexus between these bills. Our amendment will make the Energy Grants (Cleaner Fuels) Scheme Amendment Bill 2011 effective from 1 July and we will continue to protect Australian families from this high-taxing and wasteful government which is completely out of touch with the hopes and aspirations of regional communities.
(Time expired)