Government gas guzzler tax - what you need to know

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Words: Nile Bijoux
9 Jul 2019

The Associate Transport Minister has revealed a proposal to subsidise the cost of electric vehicles by taxing the heaviest polluters. Here’s what you need to know and how it could affect you.

The plan is designed to be revenue neutral, which means it should cost the taxpayer nothing. Should it be put into practice, it’s proposed the price of new or near-new EVs will drop by around $8000. Plug-in hybrids will get a price drop of $6800 and hybrids like the Toyota Prius will lose $4800 from the sticker price. Fuel-efficient internal-combustion vehicles will also get a discount while the biggest polluters will have about $3000 added to their price. It will work on a scale, meaning vehicles with middling efficiency won’t get a discount nor an additional fee.

That means an older, used Suzuki Swift import could see a discount of around $1100 while a similar Hiace might see a price hike of closer to $1400. A brand new Land Cruiser would, on the other hand have a price hike of $3000 due to its higher emissions.

Vehicles already on the road need not worry, the scheme would only apply to new and used light vehicles coming into the country.

“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,” said Genter.

“Most Kiwis want to buy a car that’s good for the environment, but tell us the upfront cost and limited choice makes it a challenge.

“This 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.

At the same time, a new fuel efficiency standard is set to be introduced, requiring importers to reduce the average emissions of the vehicles they bring into New Zealand.

NZ is one of three developed countries without fuel efficiency standards, in the company of Russia and Australia. Additionally, we have some of the dirtiest imports in the world, with high emissions and high running costs. We also have one of the oldest vehicle fleets, with the average car reportedly lasting around 19 years.

To encourage getting rid of older, more polluting vehicles, the government wants to introduce a target of 105 grams of CO2 per kilometre by 2025, the same as what Japan achieved in 2014. It’s less strict than Canadian or European standards, however.

Motor Industry Association boss David Crawford says that while the MIA welcomes the clean vehicle discount scheme, there are still a few issues. He’s worried about the light commercial sector, which could get hit hardest by the extra tax and, at the moment, will simply have to weather it as there are very little electric or plug-in options available there. By the mid-2020s there should be more options, but, he told RNZ, "for that light commercial sector, we're not there just yet."

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