Second Reading Speech
Mr Bowen (Minister for Competition Policy and Consumer Affairs, and Assistant Treasurer)I move:
That this bill be now read a second time.
The bill that I am introducing today makes minor and technical amendments to the A New Tax System (Luxury Car Tax) Act 1999, the Taxation Administration Act 1953, and the Tax Laws Amendment (Luxury Car Tax) Act 2008.
These amendments will ensure that amendments to the Tax Laws Amendment (Luxury Car Tax) Act passed earlier this year operate as intended.
These amendments are intended to clarify the operation of the law.
First, they will ensure that luxury car tax refunds are payable to eligible businesses where they actually bear the cost of the luxury car tax regardless of the arrangement used to finance the vehicle.
Second, they will ensure that contracts entered into before 7.30 pm Australian eastern standard time on 13 May 2008 are the relevant contracts for determining the luxury car tax rate of 25 per cent, when subsequent financing arrangements are made.
And, third, they will put beyond doubt that luxury car tax refunds are paid directly to claimants.
In the 2008-09 budget the government took a decision to increase the luxury car tax rate from 25 per cent to 33 per cent with effect from 1 July 2008 as part of the Rudd government's plans to make the taxation system fairer and contribute to a strong fiscal position.
It is because we made those hard yards in the budget to build a strong surplus that we now have the flexibility to respond to emerging international circumstances.
The increase was passed by the parliament in September with a number of amendments from non-government senators.
The technical amendments I am introducing today will clarify the law to ensure that these amendments operate as intended.
These amendments are required to provide clarity and certainty to car buyers, finance companies and car dealers and I strongly urge the opposition to support the bill.
Full details of this bill are contained in the explanatory memorandum. I commend the bill to the House.
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