Mr RAMSEY (Grey—Opposition Whip) (17:49): I thank the member for Fenner for his contribution, and I’m pleased that his boys like him taking them to school in his new car. Given that it was cheaper than another equivalent, I’d be interested to know what model you bought, Member for Fenner, but we’ll put that to one side. But the world—not just Australia—is very interested in, and excited by, the oncoming wave of electric vehicles, and their adoption and use will increase. That is a given. But I have to say that I do have doubts about the short-term penetration into the market in my seat of Grey, which covers 92 per cent of South Australia. It starts 30 kilometres out of Adelaide and continues to all of the borders except Victoria’s.
One would expect me to bring up the issues of regional difference and possible regional disadvantage that any new government policy might include. I know I am not a typical example but, in my role as the member for Grey, I drive somewhere between 80,000 and 90,000 kilometres a year. Sometimes I drive over 1,000 kilometres a day and, quite frankly, I don’t have the time to stop and charge up electric batteries, and I also need access to very fast charging. If it is to come up to anything like a comparison to filling up the car with fuel, I think we have a long way to go with these technologies.
I realise, as I said right from the start, that I am not typical—in fact, I am atypical; or special, as my friend says—but I do know plenty of people who drive 40,000 or 50,000 kilometres per year, living in the country. It is quite true that their cars double up and they use them to take the kids to school or to go and do the grocery shopping or whatever. But, when you live 200, 400, 700 or 1,000 kilometres from your capital city—and, in South Australia, we only have one truly major city and that is the capital city, with the next biggest municipality in South Australia around the 25,000 mark—many of us are drawn to Adelaide on quite a regular basis for good reason. So that car that also has to take the kids to school and do the drop-offs and pick-ups for sports training and all those things also has to be quite capable of getting to Adelaide as quickly as is safely possible, with a minimum amount of fuss. And, if you take the time to drive down the street of any country town, you will find that most of the cars that people are accessing are generally large four-wheel drives, normally powered by diesel motors. That is why I say it is likely that adoption will be slower in country regions. I’m not saying it won’t be done, but I think the technology will have to evolve somewhat further before we get to that point.
The reason I’ve raised that is that, while I can understand why governments will want to subsidise certain things to excel a great technology take-up—and I have a good simile that I will come to later—I think the method that the government has chosen in this area of reducing the fringe benefits tax on electrical vehicles is curious, to say the least. It seems one of the least appropriate ways to do it, in my opinion. Insomuch as the government is calling this an electric car discount, it’s not. It’s not an electric car discount at all; it is a reduction of a selective tax, a fringe benefits tax, applied to higher-income salary earners as opposed to wage earners.
I can tell you that there are not many retail workers, cleaners, nurses or bricklayers—and I could go on and on—who get a car as part of their remuneration package. The people who get a car—and consequently the companies and governments employing them that get a car—as part of their package are salary earners generally in the area of, say, $80,000 plus a year. They and those companies are the ones that choose to pay the fringe benefits tax to include the car as part of their package. Consequently, this taxation deduction—which is what I shall call it, as opposed to an electric car discount—by definition, benefits the higher-paid salary workers and larger businesses.
I can’t quantify what the long-term cost of this policy is another, and neither it seems can the government. We have a number for the forward estimates, but we don’t actually understand—we have some estimates from others—how much it will cost the taxpayer in the longer term that will go to these higher income earners, not to lower income earners. And we don’t understand how much it is likely to reduce CO2 emissions. If we introduce a policy like this that costs a substantial about money, knowing the numbers, outcomes and estimates are very important.
There is a similarity here that I said I would bring up. It’s not exactly the same, but there is no doubt that the policy surrounding rooftop solar in Australia is incredibly popular. Australians are in love with rooftop solar. We have the highest rates of uptake in the world. I would not for one moment say that the subsidies involved are a small part of that. They’ve been a large part of that accelerated uptake. Interestingly, in this area, the subsidy is provided through the SRET, the small renewable energy target, which then generates small-scale technology certificates, or STCs, which go to the installer of the equipment and reduces the price. They will degenerate in time through to 2030, which is the final target for the closure dates on the SRET.
The problem I’ve always had with the program is not the fact that it is a subsidy for rooftop solar; it is the fact that it is a subsidy for rooftop solar that actually takes from the poorest people—because it’s not a government subsidy; this is a consumer subsidy—in our communities and gives it to the richest people. The only people that can afford to put rooftop solar on their houses in the first place are the people in the higher income bracket. Those who don’t own their houses, who are in rentals, who are in houses they’re struggling to pay off, are the people who cannot afford rooftop solar. In a way, it’s even worse than this selected discount, if you like, or abolition of the fringe benefits tax on electric vehicles, because it’s actually coming out of the pockets of the poorest people in our communities and going into the pockets of the richest.
That’s always been my objection to the rooftop solar scheme. I don’t blame people for taking it up—good on them. If governments are to put these things in place, it is naturally accepted that you should take advantage of them. And I encourage people to take up the subsidies on rooftop solar and put them in. I’ve just never been happy with the way those subsidies are obtained. The paid parenting scheme is a very good example of where we choose not to take from the employer for public benefit. In this case, we needed a public benefit. We wanted the solar cells on roofs; it should not have come from the individuals who can’t afford solar cells. It’s not quite the same, but it is the same when it comes to this fringe benefits tax. It is a tax break for the rich and a bigger slug for the poor. That’s why it is wrongly founded. It is flawed in its concept.
I would have suggested that it would have been far better for the government to suggest that, if they’re willing to put this amount of money into subsidising electric vehicles, why not knock it off the price of everybody so that a self-employed person can access in the same way as somebody employed by a larger company can get it through their wages package. It just doesn’t make sense to me. I don’t know why the government has chosen to go down that path.
That rounds up my directed objections to the legislation as it stands, but I have a couple of associated issues. I’ll lay them on the table because there’ll be ample time for discussion about this in the coming years in this place. One of the things I flagged in my electorate and in a couple of speeches in these chambers already is that I think it’s time for governments to start giving serious consideration to fuel excise as a tax. There are people who will argue that fuel excise is not hypothecated for road construction and maintenance. I would argue differently. If you look at the origins of the tax, you’ll see that it actually came in as a road user charge. In fact, miners, farmers, diesel electricity generators and trains do not pay this excise. What do they all have in common? They don’t use the road. So, essentially, the only people who pay fuel excise are those who are actually using the fuel on the roads. I would say that’s a road user charge.
As the number of electric vehicles builds up, those receipts for excise will fall away, and I don’t think it is fair or right or proper that we continue with the same system. I’m not saying that it’s broken yet or that the government needs to act on this as if it were an emergency, but the government should exercise itself in thinking about what the replacement tax is going to be. The sooner we get going on it and make a move on it the better because, for people who will be buying electric cars over the next few years, it will come as a large shock to them a few years down the track when they suddenly have to start paying a road user fee, because something they would have factored into the decision to purchase is that they aren’t going to be paying fuel tax anymore. So I think it’s important we address this sooner rather than later.
There is another issue that I want to bring up. I don’t know what the answer to it is, and I don’t know what we should do about it, but I checked this out before I came up to the chamber. You can buy, let’s say, a 2006 Corolla that has done 200,000 kilometres for about $8,000. That is the entry level for students. It’s the entry level for people in the workforce that live, perhaps, with mum and dad or who are going out into a flat for the first time. It’s the kind of car that people will buy for a second car in the family, so that one of the parents can ferry kids to and from school. That’s fine. That’s a good thing. But, if we now transpose ourselves 10 or 15 years down the track, those vehicles will be gone and the cars that will be coming into the second-hand market, on my assumption, will be worthless because the batteries will be worn out.
So, if we’ve got a similar car that has done a couple of hundred thousand kilometres and it needs a $10,000 or $15,000 battery refit, that person is not going to buy that car because it will be simply unaffordable. I don’t have a solution for that. I’m not saying that we shouldn’t have electric cars just because kids starting uni won’t be able to buy a car 15 years down the track, but I do think we have to get our heads around where we are going to source vehicles from and how we find cars that are cheap enough for those kinds of people to get into the entry market. There’s an indication that, despite what the member for Fenner told us a little while ago, electric vehicles aren’t cheap. They’re generally a bit dearer than the others, and, if internal combustion vehicles are phased out as quickly as others suggest, then we’ll be facing the wall very quickly.
The other issue I would touch on briefly, which the member for Fenner also mentioned, is the talk about Ford developing an electric tradies vehicle, if you like. My understanding is that, in Australia at the moment—let’s be careful what we say here—there is nothing available in that sort of workman’s electric vehicle category that is right-hand drive. As is the way with the world, right-hand drive vehicles are in the minority. We’re probably pretty lucky that the Japanese drive on the left-hand side of the road, but we may find that sourcing new EVs in Australia with specific qualities to suit certain markets is going to be pretty slow and a hard slog.
Generally speaking, I support electric vehicles. Bring it on; I don’t mind that. But I do think the government has chosen the wrong mechanism to accelerate uptake in this case.