Amendment on Electric Car Discount Bill | Dai Le MP

Thank you, Deputy Speaker. I rise to speak to the Treasury Laws Amendment (Electric Car Discount) Bill 2022, which provides fringe benefits tax exemptions for zero- or low-emission cars. I stand in support of the honourable member for Kennedy’s amendment, which provides a framework for how a transition to renewables can benefit low-socioeconomic communities like my electorate of Fowler, who are the backbone of Australia. In keeping with this, I will also be speaking to an amendment to include hybrid electric vehicles—that is, vehicles that do not require an external electricity source to be charged.

This government and this parliament have strongly endorsed progress on Australia’s climate policy and climate awareness, and I stand largely in support of this movement. I believe Australia should strive for a green and renewable future. It is imperative that we do so to support the wellbeing of future generations and preserve this beautiful country we call home. Handled correctly, a transition to renewables presents rich and diverse opportunities for the Australian economy that will be sustainable into the future. Furthermore, I commend the government for its desire to reduce transport emissions and make electric cars more affordable for families and businesses. Encouraging the uptake of battery electric cars, hydrogen fuel cell electric cars and plug-in hybrid electric cars is in theory a positive step. However, the government’s amendment bill only helps a narrow group of employee beneficiaries and disproportionately supports high-income earners.

Recently we have seen the impact on household budgets that a spike in energy prices caused. Prices increased as much as 18.3 per cent in New South Wales, heavily impacting our most vulnerable. I would ask the chamber to consider the impact that increasingly extreme summer temperatures will have on the household budgets of low-income families. Some will struggle to afford necessary amenities such as air conditioning, something a lot of us take for granted. I raise this example to show that it is hardworking people in electorates like my own, as well as regional electorates, who bear the brunt of climate change and climate policy.

I therefore strongly support steps towards a greener future, but we must be careful to ensure it is not at the expense of those already doing it tough in places like Fowler. My constituents will be completely unaffected by this fringe benefits tax exemption for electric vehicles. Even with this exemption, electric vehicles are still simply too expensive for small businesses in Fowler. This exemption is only useful for employees or employers who can offer salary sacrifice. Electric vehicles cost between $15,000 and $20,000 more than the equivalent petrol and diesel cars, a huge upfront cost to expect small businesses to pay.

Furthermore, the amendments don’t apply to hybrid vehicles, or HEVs, which are at a lower price point than other EVs. HEVs are the third-most-sold types of cars in Australia after petrol and diesel vehicles. If we are to convince normal, everyday consumers to start making the switch, we also need to ensure HEVs are included in any subsidies.

If we are to convince normal, everyday Australian consumers to start making the switch, we also need to ensure HEVs are included in any subsidies. The government has clearly not considered how working-class Australians will benefit from their proposal. As with all things, major changes take time. I therefore propose that, alongside the other vehicles included in this proposal, the chamber support my amendment to include hybrid electric vehicles, HEVs. These vehicles are not perfect; however, they emit, on average, 64 grams of CO2 emissions per kilometre less than petrol vehicles and 76 grams less than diesel vehicles. More importantly, they are affordable. It is therefore key that these vehicles be included in this legislation.

As it currently stands, vehicles expected to be exempted this year will equate to between 0.16 per cent and 0.4 per cent of new vehicle sales in the next 12 months. By 2024-25, this percentage of new sales is anticipated to rise to the range of 0.71 per cent to 1.8 per cent. This low level of sales demonstrates how small the impact of this bill will be in its current form. It is certainly not in line with the government’s Driving the Nation program. Consequently, it is indefensible to not include HEVs on the basis that they will emit carbon. With these vehicles included, we will see a much smoother transition towards the uptake of EVs, and they will be participating in an eventual move to solely battery electric vehicles, BEVs, on the roads.

Furthermore, has the government considered the grid infrastructure required to support an increase in the uptake of electric vehicles? It seems that the government is proposing to walk before it can run. It is currently estimated that it will be at least a decade before the electricity grid can accommodate an electric fleet. And, in the short term, how is the government proposing to build the required number of charging stations? For those who travel long distances, do not have charging stations at their homes or are not charging their car at home every night, publicly available charging stations are a necessity. Currently, there is a confusing and convoluted structure of investment that covers local, state and federal spending. Whilst the government proposes to invest $39.3 million for 117 fast-charging stations, there is a lack of detail around the time line of this rollout and, more importantly, whether it will match or, preferably, precede a greater uptake in EVs. The solution to this in the short run is therefore hybrid vehicles, which have the capacity to drastically reduce emissions, compared to the current levels, and will not burden the grid or require charging stations. We need a transition period, and these amendments I’m putting forward will assist the transition period as well as making it available to many Australians.
Additionally, if we are to ensure that no-one is left behind in transitioning to a greener future, the Australian domestic industry, particularly manufacturing, must be the springboard. It must be Australian business and Australian workers that facilitate the building of infrastructure and the implementation of a renewable future. The government has committed to 604,000 jobs by 2030 as a result of transitioning to renewables. Only 54 per cent of these jobs are meant to come directly from renewable industries. Consequently, the bulk of jobs will come from those workers who support our renewable capacity: tradesmen, factory workers and manufacturers. In Fowler, for example, there are nearly 1,400 workers into the automotive industry. However, there is currently a real shortage of capacity and expertise in electrical component manufacturing. In its own Powering Australia plan, the government asserts that thousands of jobs will be created for construction workers. With investment, surely the same could be true for our manufacturing industry, as people upskill to meet the increased demand for production of electric vehicles and other renewable products, especially in an electorate like Fowler where unemployment is nearly three times the national average.

Furthermore, due to global supply chain shortages, the current wait time for an EV is roughly 12 months but could extend to up to two years. While it is good in principle to implement what the government has put forward, consumers won’t reap the benefits of their EV for a long time to come. While it may be cheaper to fuel these cars once they have been purchased, this approach still requires the initial capital to purchase the vehicle and the charging capacity for electric cars to ensure they run efficiently for business needs. I commend state governments that have committed to rolling out fast-charging stations, with NSW planning to have 700 fast-charging stations rolled out by 2027. However, this does not help small businesses now, particularly those from low socioeconomic communities. Australia exports about 60 per cent of the world’s lithium. Surely there is capacity to reboot our local manufacturing industry to build EV batteries. With a local manufacturing sector—in particular one based in south-west Sydney in my electorate of Fowler—we will no longer have to rely on a global car market that is already struggling to keep up with demand, which could see wait times dramatically reduce.

Additionally, we are presented with a unique opportunity to invest in our renewable manufacturing industry. Countries such as China with major automotive manufacturing industries are having to use mandate based systems that see the production of EVs incentivised, as it will take time for manufacturers to adjust. In Australia, we do not have this issue. If the government is serious about the uptake of EVs, investing in Australia’s industry is an obvious and important policy. If the government seeks a truly sustainable future, thinking must extend beyond the top end—beyond the consumers of the final product. For real and effective affordability and sustainability, we need Australian manufacturing by Australian majority owned companies. Initially this may be focused on car manufacturing, but it can eventually be extended to buses and heavy vehicles as we build the capacity to manufacture them and their components onshore. I therefore ask the government to consider requiring that all government purchased vehicles at local, state and federal level be zero- or low-emissions vehicles manufactured in Australia using Australian made components and parts by 2035.

Further to this point, the government must also facilitate the purchase of all new commercial and government buses in metropolitan areas to be electric buses manufactured in Australia, as proposed by my colleague the member for Kennedy. What we see in the government’s proposal is the minimum. We see the absolute minimum from this government in incentivising the uptake of electric vehicles. If they’re truly planning to increase the number of EVs on the road, they have certainly not proposed how they plan to support such an uptake. Such a plan should include consideration for investing in our domestic manufacturing. I therefore implore the chamber to hold this government accountable for considering all Australians in their transition to renewables—not just those who can afford it—and support my amendment to the bill to include hybrid electric vehicles.