While climate change policies are tossed on to Hipkins’ bonfire, the Greens claim victory with fringe benefit tax changes

Buzz from the Beehive

Exempting bikes, electric bikes and scooters from fringe benefit tax looked like something of a sop for a Green Party that had good grounds to grumble after a bunch of climate change measures was tossed on to the PM’s policy bonfire.

The combustibles included the clean car upgrade scheme, public transport improvement (to be applied in five main centres rather than nationwide), the policy to lease clean cars to low-income families, and work on the proposed container return scheme (deferred rather than dumped).

As things turned out, the Greens seized on the fringe benefit tax announcement as  a political triumph.  Their press statement was headed Greens Secure Win For Clean Transport – and their transport spokesperson, Julie Anne Genter, crowed:

“This is a huge Green win that we have been pushing for many years. It will finally rebalance the tax law to make it easier for people to access e-bikes for commuting to and from work, as well as public transport.”

The Māori Party was not so readily mollified, declaring it was “extremely concerned” with the government’s culling of certain environmental policies, and calling on the climate change minister to stand down because he had failed “dismally”.

This would be Climate Change Minister and Green co-leader James Shaw, who expressed his own disappointment “with some of the choices that were made in terms of the so-called policy bonfire”.

As is widely understood among political commentators, of course, Shaw had been shabbily treated by the Hipkins Cabinet – he was not party to the Government’s decisions on what policies were best suited for the flames.

Among the consequences, the Greens are in something of a pickle, as former Revenue Minister Peter Dunne pointed out in an article headed Hapless Greens Shafted By Hipkins But Have Nowhere Else To Go.

He wrote:

It is becoming increasingly difficult to see how the Greens can support another Labour-led government if they are able to do so after this year’s election. Already, co-leader James Shaw has warned Labour not to take it for granted that the Greens will automatically support Labour again (even though by ruling out ever working with National the Greens have left themselves nowhere else to go if they want to remain a party of government.)

The problem for the Greens is that in his drive to make Labour electable again new Prime Minister Chris Hipkins has ditched many items from the government’s agenda that the Greens were champions for.

But David Parker, who now is our Revenue Minister, had good news for the Greens when he announced –

Bikes and scooters to be exempt from FBT

Bikes, electric bikes and scooters will be added to the types of transport exempted from fringe benefit tax under changes proposed today.

The changes mean that employers who subsidise e-bikes, bicycles, or other forms of low carbon transport for staff as a part of their salary package, they will not be taxed.

The news was posted on the Beehive website along with these announcements:

New Zealand to attend regional security meeting in Australia

The Lead Coordination Minister for the Government’s Response to the Royal Commission’s Report into the Terrorist Attack on the Christchurch Mosques travels to Melbourne, Australia today to represent New Zealand at the fourth Sub-Regional Meeting on Counter-Terrorism and Transnational Security.

Health and safety action plan for ports

The health and safety practices at our nation’s ports will be improved as part of a new industry-wide action plan, Workplace Relations and Safety, and Transport Minister Michael

David Parker said the changes he was announcing would allow bicycles, electric bicycles, scooters, electric scooters, and micro-mobility share services to be exempt from fringe benefit tax where they are being used for commuting to and from work.

“This measure will support New Zealand’s shift to more sustainable transport options and encourage employers to provide further sustainable and climate-friendly transport options for their staff,” David Parker said.

The amendment to the Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Bill (No 2) Bill was in line with calls from the Green Party and submitters to the Bill.

“Many people had written in pointing out the health and environmental benefits of using such forms of transport. The Government agrees and considers that there is a public good to be gained from encouraging low emission transport,” David Parker said.

“As Environment Minister as well as Revenue Minister, it’s great to see the tax system contribute to the Government’s efforts to reduce emissions and increase the uptake of low-emissions vehicles.”

The Bill currently being considered by the House already contains a proposal to exempt employer-subsidised public transport used by an employee to commute to and from work.  This amendment extends that measure.

In the Green  Party statement, Genter said providing an employee with a free car park amounted to a Government subsidy, whereas providing an e-bike attracted a tax.

“This has created the absurd situation where, in a climate crisis, employers are incentivised to subsidise polluting forms of transport for their staff.

“After years of pressure from the Greens, the Government is finally stepping in to fix this. It is a long overdue change that will help level the playing field between the different options people have for travelling to and from work.”

In wrapping up today’s Buzz from the Beehive, let’s note something that is missing:  a statement in response to the AUKUS submarine deal which (as Kiwiblog’s David Farrar points out) is news of huge global and regional significance.

It should be the lead story in NZ media, but it has been barely reported on.

Farrar referenced the Washington Post report that President Biden had joined his British and Australian counterparts to announce a major new plan to supply Australia with nuclear-powered submarines in what amounts to a direct counter to China’s growing influence in the region.

He says whatever defence and foreign policy NZ had two years ago is now outdated.

The Ardern Government has actually done a good job at starting to reorient our foreign policy around the new reality, but we need to follow this up with a credible investment in defence.

In 1980 we spent 3% of GDP on defence. We now spend 1.4%. That may have been fine in the 1990s and even early 2000s when Russia and China were relatively benign, but it is manifestly inadequate today, Farrar insists.