Treasury Laws Amendment (Electric Car Discount) Bill 2022

I support the amendment moved by the member for Hume to the Treasury Laws Amendment (Electric Car Discount) Bill 2022. In government, the coalition’s Future Fuels and Vehicles
Strategy was a technology led approach to reducing emissions in the transport sector. It directly involved working closely with the private sector to increase the uptake of hybrid, hydrogen, electric and biofuel fuelled vehicles. Designed to make it easier to roll out future fuel technologies, it focused on giving people choice in the vehicles they need to drive or want to drive. A critical part of that strategy was to ensure that our electricity grid, a key part of the infrastructure required, had the capacity for more electric vehicles and the greater demand on the system, which demonstrates why our opposition to this bill is based on the fact that this is poor legislation, lacking in careful planning. This is something we saw repeatedly the last time Labor was in government.

When we look at this bill, the Labor government has even failed to outline the emissions benefits and long-term costings, facts I would have thought were essential in a bill of this type. Labor also failed to consult with industry, state and territory governments and civil society. Again, I would have thought that genuine and extensive consultation would be a prerequisite and deliver a better result in the application and effect of such legislation. Without that detail, the result we see in front of us is a high cost to taxpayers and a low impact on reducing emissions. The proposal costs $205 million over the forward estimates, according to the bill. However, the Parliamentary Budget Office post-election report costed the medium-term projection at $2.3 billion over the decade, and at over $639 million per annum by 2032-33—a clear demonstration of the cost to taxpayers.

The Labor government cannot quantify how the measures in this bill will deliver emissions reductions. Evidence from the Treasury and the Department of Climate Change, Energy, the Environment and Water showed the impact on emissions reductions has not been quantified. In fact, third-party evidence suggests it’s actually negligible. The government has not detailed exactly what measures in the bill will deliver to, or impact on, the EV market. The government should be delivering well-designed, well-targeted and quantified details and should be partnering with industry, particularly given it will cost taxpayers over $2.3 billion.

We know demand for electric vehicles is increasing. However, two per cent of the total number of vehicles sold in Australia in 2021 were EVs. To my knowledge, none of them were utes. The top-selling vehicles in Australia are the Toyota Hilux and the Ford Ranger, both utes. It’s a completely different market to much of the rest of the world. Whether those utes are for tradies, farmers or other people in outer metro, rural and regional areas, these are the top sellers in Australia.

We know we need a managed transition to the increasing electric vehicle uptake. The demand on and availability of power and the infrastructure needed—the very issues referred to by the member for Hume, the shadow Treasurer, in his amendment—are why the process needs to directly involve the states and territories. For instance, in Western Australia, solar panel companies and electricians are raising concerns that Western Power policy is having real impacts on homeowners. When homeowners are fitting solar panels to their homes, Western Power now requires regional and rural homes to install a main switch with a 32-amp circuit breaker. By comparison, in metro areas, people have access to 63-amp circuit breakers.

We know that most Australians want to charge their electric vehicles at home. Some homes will use a level 1 AC slow charger trickle feed, which generally is two kilowatts of charge through a normal 10-amp socket. Depending on the battery size, this means it can take up to 40 hours to charge. There are many different types of commercial options available to reduce charging times. There is a real need to know what the cost of EV chargers in homes will be, what the cost of upgrading the electrical systems for individuals and homeowners will be, and whether the extra power needed will be available. These are real issues. I know that costs range from $1,000 for a seven-kilowatt option through to $3,000 for a 22-kilowatt option, plus installation and associated costs to ensure the house can deliver the power required to meet the daily needs of the home as well as charging the family or business vehicle, or more than one vehicle.

Clearly, the difference between power delivery for rural and regional areas in WA and delivery for Perth metro areas is stark. What it does for me is to highlight the fact that the WA state Labor government is focusing on the metro at the expense of rural and regional areas, where the wealth is generated. It also highlights the fact that the $2.3 billion cost of the measures in this bill could be better spent on looking at the various EVs on the market and the information provided, much of which focuses on charging, at times, with public chargers—times ranging from 30 minutes upwards. But, at home, charging times for a regular wall socket range from 11 to 20 hours, and, as I said earlier, depending on the battery, can be up to 40 hours.

These are examples of the need for good consultations and a managed transition—exactly what the Labor government hasn’t done with this bill. Consultation definitely needed to involve industry, particularly the automotive industry, given what I heard from the sector last night at an automotive vehicle emissions meeting here in Parliament House. One point made there resonated with me: by 2030, the demand for vehicle batteries globally will be 100 million, and the estimated supply available at that time will actually be 40 million only.

Other experts have raised serious questions about the equity, fiscal sustainability and price pressures on the EV market currently. The government has failed to quantify these issues and failed to consult. The Institute of Public Accountants has said that the policy will have a negligible impact on reducing Australia’s carbon emissions from the transport sector. I will also be very interested to see who benefits the most from this measure. Will it be rural, regional and remote Australia or will it be predominantly metropolitan and city-based beneficiaries? This is something that I will certainly be following closely.

I have already touched on the problems of access to power for rural and regional WA. There are any number of practical measures the government could have directed the $2.3 billion taxpayer funding towards, given the challenges ahead in the transition to more EVs in Australia: the infrastructure challenges; the increases ahead in transmission availability and capacity; the increased demand for and access to fast-charging stations; and the impacts on small, regional and remote communities with existing limitations on power capacity. Some of our roadhouses are still using generators in their patches. These will, I suspect, need to be points of fast charging.

I was talking to a local car dealer, and he is concerned about some of the smaller communities that have a limited capacity right now, if you are driving long distances, particularly around Western Australia and to the north, and the additional demand that will place on a local town, like Tom Price or somewhere similar. We don’t want to see those communities suffer from a blackout because there are a whole lot of cars being plugged in and dragging on the local power system.

There is also the cost of retraining our current mechanics. Will they actually need virtually the same qualifications as household electricians to be able to deal with 240 volts, for instance? There are also issues facing car dealers and car service centres around EV battery management and the warranties on the batteries. I don’t want to see that responsibility sit with our local car dealers and not with the manufacturers. More broadly, there are many issues facing businesses, like one in my electorate that is installing a significant quantity of solar panels but is also having to provide a fireproof building to house the batteries.

There is so much ahead as we transition through the process. However, one of the first steps that we are seeing from Labor with this bill is poorly implemented policy with no consultation. There will need to be greater scrutiny on this ahead, particularly on where the benefits of the $2.3 billion actually go. On the most telling assessment of where the benefits will go, I think it is worth repeating the words of the Shadow Treasurer, who also quoted Professor Miranda Stewart. Professor Stewart—a respected tax expert, a director of the Tax Group at the University of Melbourne Law School and a fellow at the Tax and Transfer Policy Institute at the Crawford School of Public Policy at ANU—said that the design of the measure must be changed ‘given its fiscal cost, unequal benefit and uncertainty about the electric car market and the best policy to transition Australia’. Professor Stewart also said that the policy will ‘deliver the subsidy to a rather narrow class of employee beneficiaries and provides the largest benefit to the highest income earners’—damning indeed. Clearly, the benefits in this bill will not flow to lower and modest income earners, whose taxes will help pay the $2 billion plus cost of this bill. I will be following very closely to see whether the benefits actually flow to rural, regional and remote communities, one of which I represent.