Government passes bill to repeal ‘ute tax’

The ‘ute tax’ is officially on its way out as the New Zealand Government officially passed a bill to repeal the Clean Car Discount this week.

Prime Minister Christopher Luxon previously confirmed the scheme would be scrapped by 31 December 2023, with the newly passed legislation now setting its end date in stone.

“The National-ACT coalition agreement made scrapping the ‘ute tax’ a priority of our 100-day plan and we are making good on that promise,” says Transport Minister Simeon Brown.

One of the biggest concerns when the Clean Car Discount was first introduced in July 2021 was to do with fees applied to vehicles like utes of which there are little to no hybrid or electric alternatives, hence the reason many refer to it as the ‘ute tax’.

“Many drivers who need utes for work can’t avoid charges under the scheme as there are few viable alternatives that meet their needs,” adds Brown.

“The scheme was supposed to be fiscally neutral, with the ‘ute tax’ charges covering the rebates and administration costs. However, more has been paid out in rebates than has been received in charges.”

Over $579 million in rebates have been paid out to buyers of hybrids and EVs, while fees have only covered $290 million of the scheme. That leaves the taxpayer to front the rest of the cost.

If you’re buying a new vehicle between now and the end of the year or have yet to apply for a rebate, be sure to check out what’s set to change following the Clean Car Discount’s end date.

The Clean Car Discount will be repealed on 31 December 2023.