Page 1046 - Week 03 - Thursday, 26 February 2009
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most economical of the new breed of environmentally friendly locally produced vehicles.
Australians are starting to choose cleaner, greener motoring, but the success of this will depend on cost and incentives to make people change motoring habits. Cheaper up-front costs, whereby the purchase of a more fuel-efficient vehicle attracts less tax and the less efficient car is taxed more, are a good start. We maintain, however, that more needs to be done rather than just offering a one-off sales tax incentive at point of sale.
Of course, at the top of the list is that Australia should be regulating fuel-efficiency standards across the board. There are cars currently produced in Europe that are already as efficient as the hybrids being produced today, manufacturing to standards and to a market that is craving access to efficient vehicles. Setting fuel efficiency standards means that we commence a transition to lower-fuel-use cars with the least fuss and without relying on the vagaries of consumer choice. We know that when fuel efficiency is voluntary, consumers may or may not take it into account when making a purchase. When it is mandatory, they do not even need to worry about it.
In lieu of this, we need to offer more incentives. We see the need to link registration tax costs to the sales tax reduction which, when combined with petrol or diesel savings, will offer the motorist a significant incentive to change to the greener motoring option. People are not just choosing these vehicles to address pollution issues; they are seeking to reduce their running costs as well.
In the Bracks review report for the federal government on the Australian automotive industry, which was released last year, a recommendation was made that states and territories “should consider the harmonisation and reduction of stamp duties, vehicle registration and third party insurance”. This type of package will go a long way to influencing people who are keen to make a change to environmentally friendly transport to look at the greener options when purchasing a new vehicle and continue to go that way in future vehicle purchases. It is about annual costs, not just a one-off sales tax reduction.
In addition, if we are serious about using mechanisms like this motor vehicle duty to reduce our emissions, tax incentives should be extended to scooters and motorcycles for those who choose to use these more efficient modes of transport. One needs to ask why these were not considered if we are really committed to reducing emissions and improving transport options.
I note that in the ACT government’s green vehicles duty scheme guide on their website the scheme is “not designed to limit vehicle choice”. In relation to this, I raise the fact that low-income earners are not always able to purchase new vehicles, or pick and choose, and in fact would be disadvantaged under the new arrangements by taking the option of purchasing high-emission second-hand cars as they will be cheaper. This is another reason why measures such as registration and third party insurance reductions on all green-friendly vehicles need consideration.
The Bracks review also recommended, in the review that Mr Ken Henry, the Secretary of federal Treasury, is undertaking for the federal government on taxation,
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