Legislative Assembly for the ACT: 1998 Week 9 Hansard (18 November) . . Page.. 2621 ..
MS CARNELL (continuing):
a further decline in residual values of vehicles, which have fallen over the past two years from around 95 per cent of new car prices to around 81 per cent on a typical four-cylinder vehicle; an increase in the cost of vehicle registration from 1 September 1998; and an increase in the cost of vehicle insurance from 28 September 1998.
Over the past two years the average lease rates for small sedans, which make up 36 per cent of the total fleet, have increased by approximately 3 per cent. The average lease rates on large sedans, which make up 17 per cent of the fleet, increased over the same period by approximately 21 per cent. Fluctuations in the residual or resale value of vehicles has the largest impact on lease rates, accounting for over 50 per cent. The residual rates are set on a six-monthly basis, based upon the resale value of similar cars over the past 24 months weighted to the last six months. The residual values therefore reflect current market conditions, not ones that might exist in a couple of years' time.
Record new vehicle sales and oversupply of used vehicles are the key market forces which are influencing the current decline in residual values. To date the possible effect of a GST has not been factored into lease payments for ACT vehicles. The Government is committed to reducing overall vehicle fleet costs, and has done so very consistently over its time in office. If Mr Wood had bothered with facts in this situation, he should have thought about it seriously. Mr Speaker, under a GST the reason that residual prices will come down is simply that the cost of new cars will come down. If the cost of new cars comes down and the cost of second-hand cars comes down, there will be a dual effect of GST which of course, in the overall situation, will not affect the leasing prices once the whole situation plateaus. What does affect leasing prices is what is happening right now - the price of new cars going up and the price of second-hand cars going down. It leaves a gap. That is what is occurring right now. Again, it is a great pity that those opposite did not bother with the facts.
MR WOOD: I ask a supplementary question, Mr Speaker. Next time, I might take as long to ask the question and then I might not be told some of the things I already know. In asking my supplementary question I will save myself having to use standing order 46 or 47 later to explain wrong facts. The fact is that today is the first time I have mentioned government fleets. I have not mentioned government fleets before today.
Mr Humphries: Mr Speaker, I take a point of order. You have made rulings about preambles before. There is a very long preamble to this question.
MR SPEAKER: No preamble, Mr Wood. You know the rules.
MR WOOD: I am just saving you time, Mr Humphries. I can stand up in another few minutes and do it under standing order 46.
MR SPEAKER: You can indeed.