Treasury Laws Amendment (Tax Incentives and Integrity) Bill 2024; Second Reading

Watson-Brown supported the bill, arguing that Schedule 1 correctly aligned luxury car tax thresholds with modern vehicle efficiency standards by restricting benefits to electric and plug-in hybrid vehicles. Watson-Brown contended that Schedule 2 addressed a regressive element of the tax system by preventing high-income earners from deducting interest on tax debts, which she described as a subsidy funded by the public. Watson-Brown viewed these measures as progressive reforms that a coalition government would not pursue.

Tink described the bill as a disjointed package, supporting the luxury car tax reforms and the instant asset write-off extension but opposing the removal of tax deductibility for ATO interest charges. Tink argued that the latter measure would disproportionately harm small businesses already struggling with cash flow and debt, rather than encouraging compliance. Tink suggested the government should have defined fuel-efficient vehicles as zero-emission only and called for the instant asset write-off to be made permanent with a higher threshold.

Steggall supported the bill's intent to close loopholes and promote electric vehicles but argued the luxury car tax changes did not go far enough, particularly regarding plug-in hybrids and utility vehicles. Steggall expressed concern that removing interest deductibility would negatively impact small businesses without adequate safeguards. Steggall announced she would move an amendment to increase the instant asset write-off threshold to $50,000 and make it permanent to provide certainty for small business investments.

Young opposed the bill, arguing that removing tax deductibility for interest charges would punish small businesses facing cash flow difficulties and increase compliance costs. Young cited submissions from accounting bodies warning against the measure and criticised the luxury car tax changes for discriminating against owners of non-electric vehicles. Young stated the coalition would move amendments to increase the instant asset write-off threshold to $30,000 and make it permanent, while also proposing changes to allow claims for business-related meal expenses.

Spender criticised the government for packaging controversial reforms with positive measures in omnibus bills, specifically opposing the removal of deductions for general and shortfall interest charges. Spender argued this change would harm small businesses during a period of rising insolvencies and lacked evidence of widespread exploitation. Spender suggested the government should instead focus on reducing regulatory complexity and increasing the employee threshold for small business definitions to support growth.