Proposals to put the brakes on climate pollution run into a red light from Taxpayers’ Union

One lobby group spoke up on behalf of low-income people, when the government announced it is proposing to make electric, hybrid and fuel efficient vehicles more affordable.

Another – which speaks for car dealers – expressed a willingness to talk about the government’s plans.

Associate Transport Minister Julie Anne Genter announced the policy, aimed at enabling families to “choose a vehicle that’s better for the climate and their back pocket”.

Presumably this will be done by calling on taxpayers to pick up a part of the tab.

Genter said the cars, utes and vans we use every day are also the fastest-growing source of harmful climate pollution and account for nearly 70 per cent of our transport emissions. 

“Most Kiwis want to buy a car that’s good for the environment … “

Do they?

  ” … but they tell the government the upfront cost and limited choice makes it a challenge.”

Whatever Kiwis might want, this policy

” …  is about making cleaner cars a realistic choice for more New Zealanders – by reducing the upfront cost of electric, hybrid and fuel efficient vehicles when sold in New Zealand for the first time.

Discounts will be financed by putting a small fee on the highest-polluting vehicles when they are sold in New Zealand for the first time.

According to Genter:

“New Zealanders have also told us they want more climate-friendly vehicles to choose from …”

The government accordingly is proposing that vehicle suppliers be required to import more fuel-efficient vehicles every year.

Vehicles already registered in New Zealand would be exempt from these policies when on-sold in the second hand market.  This means more than 70 per cent of vehicles sold each year won’t be affected by these proposals.

These changes would prevent more than 5 million tonnes of dangerous climate pollution going into our atmosphere and would make a major contribution to meeting New Zealand’s climate targets, Genter said.

The benefits of these policies would flow on into the second hand market as more fuel efficient hybrid and electric vehicles are sold on.

The country would be spared more than $3.4 billion in fuel and result in fuel savings of more than $6,800 over the lifetime of an average vehicle.

But the New Zealand Taxpayers Union says the proposed penalty on “gas guzzling” vehicles is a painful, regressive tax.  

Taxpayers’ Union Executive Director Jordan Williams says:

“Let’s be very clear: this is a tax on Otara vehicles to subsidise Teslas in Remuera.”

“Only a few, largely high-income, motorists will benefit from this subsidy, while many more low income motorists will have to choose between a nasty penalty or delaying the purchase of a new car. And as this tax leads driver to hold on to their existing vehicles for longer, we’ll miss out on improvements to safety and environmental standards.”

“Successive Governments have already whacked motorists hard with hikes to petrol tax. Now Julie-Anne Genter is mixing it up with scheme to ‘take from the poor, give to the rich’.”

“Just because something is shrouded in environmental branding doesn’t make it any less nasty to the poor.”

The Motor Industry Association, apparently more accommodating, says it welcomes sensible discussions on ways to make vehicles cleaner and greener and the new car sector will work constructively with the government on what it believes are the best mix of policies to achieve that outcome.

Chief executive David Crawford says the industry doesn’t agree with all of the government’s proposals.  But it is keen to ensure it is successful in reducing CO2 emissions from the light vehicle fleet in New Zealand.

Even so, Crawford claims there is some misunderstanding about the model range that new vehicle distributors can import into New Zealand.

“While the Government believes that we are not importing the best models, the reality is that new vehicle distributors simply supply what people buy.

The MIA reckons the best policies to achieve a reduction in emissions are those that influence purchase decisions. Changes in models supplied to New Zealand will follow if the demand is altered.

Crawford says the proposed Clean Car Discount scheme, whereby vehicles attract either a rebate or penalty at point of sale depending on their emissions, sends a clear signal to consumers and – over time – will increase demand for lower emitting vehicles.

“In our view it is the most powerful policy available to this Government to influence car purchase decisions.”

But he expressed concerns about the proposed Clean Car Standard which sets average weighted emissions targets that importers must meet.

“That implies that distributors have significant influence on vehicles consumers choose to buy as well as vehicles manufacturers produce.

“This is not the case as New Zealand is a tiny global market, and therefore this policy is unlikely to achieve the results that the Government is seeking.

“Policies aimed at controlling supply into our market are generally not favoured as they impose artificial controls that often distort that market.

“They can also create a range of unintended outcomes such as people holding onto older less safe and more polluting cars longer than they would otherwise and it is also likely to lead to price increases for all new vehicles entering the market.”

Crawford says the MIA is also disappointed with the idea of  a sliding scale FBT (fringe benefit tax) regime.  And better depreciation rates are not up for consideration, because these two policies in combination with a clean car discount would significantly encourage sales of lower-emission vehicles.

One thought on “Proposals to put the brakes on climate pollution run into a red light from Taxpayers’ Union

  1. JAG’s announcement is virtue signalling tosh. This decision will see many older diesel and petrol engine cars remain in the national fleet for longer as the effect of a tax on new imports will raise the value (in use) of the existing fleet (or slow the depreciation in value). Cars last a lot longer than in yesteryear – rather than face the replace decision owners will decide to hold on. In 2015 there were 3.9 million motor vehicles in NZ – it grew by 44 percent from 2.7 million in 2000. Almost none new vehicles are electric cars or hybrids such is their low market share. According to MIA stats EV’s and Hybrid sales Jan – May 2019 was 2,014 vehicles. All vehicles sold over that period were 75,747 – EV. PHEV etc are 2.6% of sales. The average age of a light passenger vehicle in 2017 is 14.3 years – up from 11.7 years in 2000 – therein lies the issue. There is limited turnover. To get to say 15% of the fleet being hybrid or EV (and no growth in fleet size (unlikely given this Government has the migration tap on open)) would mean having 585,000 hybrid or EV’s – over 10 years (probably longer that the average battery life I might add…) that means 58,500 additional EV’s etc added to the fleet every year. Sales volumes (of EV’s) need to increase by 29 times. Then of course sad to point out but driving around in an EV will not change the weather. JAG and her followers are setting both themselves and the population on a fool’s errand.

    Liked by 1 person

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