Ministerial Statement

FRINGE BENEFITS TAX

The Hon. J.W. WEATHERILL (Cheltenham—Premier, Treasurer, Minister for State Development, Minister for the Public Sector, Minister for the Arts) (14:06): I seek leave to make a ministerial statement.

Leave granted.

The Hon. J.W. WEATHERILL: Last week, the commonwealth government announced that it would abolish the statutory formula method for calculating the fringe benefit tax payable on cars. This decision has raised significant concerns, particularly among local car manufacturers and components suppliers. Already Holden and Toyota are estimating a significant impact on demand for vehicles, with flow-on impacts for suppliers. More broadly, this issue is damaging confidence in the industry, and I believe that urgent action is required to address these issues.

Last week, I spoke to the commonwealth Treasurer, the Hon. Chris Bowen MP, and I met with the commonwealth Minister for Innovation, Industry, Science and Research, the Hon. Kim Carr, to express my concerns about this policy change. I have also met with a range of industry participants since the policy change was announced last week. Like me, they believe that state and commonwealth governments can take immediate steps to increase demand for Australian-made cars.

On the weekend, I wrote to the Prime Minister to put forward positive proposals that will assist the industry. These proposals are some among many options that may assist the car manufacturing industry. The first of these proposals is to delay the abolition of the statutory formula method for Australian-made vehicles until each manufacturer's new platform vehicle has come into production, which would enable manufacturers to factor the impact of the change into their business case for these vehicles. In the meantime, it may create an incentive for greater purchasing of locally-made vehicles for fleets.

I also met with the Federation of Automotive Parts Manufacturers. They highlighted to me Australia's position as a world leader in using LPG as a vehicle fuel, which is available factory-fitted in the Holden VF Commodore. In addition to our leadership in LPG, Toyota's Hybrid Camry is the first mainstream Australian-built hybrid car. These vehicles are much more fuel efficient and are making an important contribution to reducing the impact of vehicle travel on the environment. I agree with the proposal put to me that further reform to the fringe benefits tax should be considered to exempt hybrid and LPG vehicles from the fringe benefits tax to provide an incentive for fleet buyers to consider these vehicles first.

FAPM has also put to me concerns about the current threshold of $60,316 for the luxury car tax and the effect this has on locally-manufactured mainstream vehicles being subject to that tax. My view is that, when introduced, the tax was not intended to apply to mainstream locally-produced vehicles. The threshold should be raised from its existing level to $70,000. This will reduce the number of Australian-made cars that face the luxury car tax and reduce its impact on the local industry. These three proposals to change government policy are significant, but the most important support we can provide is to urge more Australian governments, businesses and families to buy Australian-made cars.

Mr Hamilton-Smith interjecting:

The Hon. J.W. WEATHERILL: No; it's exactly the same.

The SPEAKER: I call the member for Waite to order.

The Hon. J.W. WEATHERILL: It's exactly the same position. The South Australian government has a strong record of buying Australian-made cars. Ninety-nine per cent of our current passenger fleet and 100 per cent of our current order book are Australian made. The commonwealth government and the Victorian government have a similarly strong record of support.

We need to ensure that Australian businesses and community groups that buy locally made cars are recognised publicly for their support. The South Australian government has launched a campaign for businesses, local government and community groups to pledge publicly that at least 80 per cent of their future passenger car purchases will be Australian made.

Yesterday, Anglicare committed that it would be switching its 175-strong fleet over to locally built Holden Cruzes. Today, I announced with Mayor Aldridge that the City of Salisbury would be joining our campaign. I look forward to making many more announcements into the future with companies that are backing our local industry. The most important responsibility of this government—

Ms Chapman interjecting:

The Hon. J.W. WEATHERILL: —is to stand up for our state's interests.

The SPEAKER: I call the deputy leader to order.

The Hon. J.W. WEATHERILL: This is a commitment to South Australia that transcends party politics, at least on this side of the chamber.