Page 4912 - Week 15 - Thursday, 15 December 2005
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position where they are at. If somebody wants to purchase two vehicles, it is not unreasonable that they would expect to secure greater discounts, as applies in every other area of commercial activity in our society. Yet the government says, “We are going to tax you as though those negotiations never occurred and disadvantage you.”
The other argument that was advanced was the fluctuations due to seasonal price variations this is designed to address. The fact is that prices of many goods and services fluctuate from season to season. They fluctuate from factors in the economy. We are seeing, for example, a fall-off, I understand, in sales of four-wheel drive vehicles and cars that have higher fuel consumption, because of the current price of petrol in the retail areas in Canberra and elsewhere, and this will impact on prices. But it is no reason to assume that such movements are undesirable or should be avoided. I do not see that this principle that is being established here has any justification. It is not applied to the rest of society where we pay taxes based on housing—goods and services tax, which the territory of course is the beneficiary of. We do not pay GST based on what somebody would like us to pay for a particular item. So it is a very bad precedent being established and it is not good law.
Another reason given for this measure was the impact on sale prices of manufacturers’ incentives to dealers to increase turnover. Discount pricing is a common and effective way of increasing turnover, and I do not understand why we would try to avoid it. You wonder where this sort of mentality goes. There is nothing wrong, I suggest, with price incentives to increase turnover. If businesses and manufacturers see this as a way of improving business, let us encourage them—not put roadblocks in the way with ACT punitive tax measures.
The Treasurer has argued that basing duty payable on the list price will ensure that similar amounts of duty are paid on similar new vehicles regardless of pricing variations and the bargaining power of the purchaser. He says also that it will reduce compliance costs, create administrative efficiencies for the government and increase certainty for taxpayers. I note that he puts administrative efficiencies for the government well ahead of the interests of the people who actually buy the cars.
The move he proposes will in fact complicate administration, because there will now be a separate system for new cars and used ones. Under the current scheme, duty on all vehicles is calculated on either purchase price or the estimated market value, whichever is the higher—and, notwithstanding my view on the deficiencies of that term, market value, there is at least uniformity between new and used cars. I understand the Treasurer is proposing to keep used vehicles as they are but to complicate the system by creating an additional system for new cars. I do not understand how this particular measure is beneficial in any way and I would urge the government to consider the amendment we are putting forward and to tax all vehicles on the same basis.
I also note that the Treasurer argued that this change would bring the ACT into line with Queensland, South Australia and Western Australia. The advice I have received is that this information is quite inaccurate. The fact is that in both Queensland and South Australia duty is calculated on either market value or the sale price, whichever is greater.
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