You’ll likely remember the previous Government’s “ute tax”. Overnight, the cost of buying the kinds of vehicles people rely on – to get to work, to run a farm, to carry equipment, or simply to transport a family safely – jumped. Wellington added costs when household budgets were already stretched to breaking point. If you were a tradesperson trying to balance your books, a farmer getting through a tough season, or a parent just needing a large car for school runs and weekend travel, your vehicle of choice became more expensive to buy.
From the beginning, ACT said the ute tax was unfair and out of touch with the realities of daily life. We made the removal of the tax a coalition commitment because for us, the test is simple – does a policy help people live their lives, or does it just make things more expensive?
The ute tax (officially called the Clean Car Discount) is now gone. But many people don’t realise that there was a second tax on vehicles sitting quietly in the background, and it has been pushing up prices just as surely.
Alongside the ute tax, which applied to buyers, Labour introduced the Clean Car Standard, which is paid by importers of vehicles. It doesn’t show up as a fee on the dealer’s invoice, so most families wouldn’t know it’s there. But the tax adds hundreds or even thousands of dollars to the cost of bringing in the kind of ute, SUV, or van that many New Zealanders need.
Those penalties don’t appear as a line item on the sticker price, but the cost still lands on the buyer, and the tax increases each year, meaning prices for non-electric vehicles creep upward.
And, like the ute tax, the Clean Car Standard doesn’t achieve environmental goals. Transport emissions in New Zealand are capped and governed by the Emissions Trading Scheme, so when someone switches to an electric car, they just free up carbon credits for others to use. Of course, motorists already pay Emissions Trading Scheme levies on fuel, which incentivises people to buy more efficient vehicles.
Last week, the Government announced that Clean Car Standard charges will be cut by almost 80 percent. That is a very positive step. Importers competing for buyers will ultimately pass savings to the market. That will help families, tradespeople, and small businesses who simply want a dependable vehicle that can handle long distances, rural roads, and heavy loads.
ACT opposed the Clean Car Standard when it was introduced, and we oppose it now. Cutting the charges is a start, and Government has also announced a wider review of the scheme, which is promising. It shows a growing recognition that the scheme is broken. Reducing penalties only treats the symptom, but the real fix is to remove the underlying problem.
Cutting the charges helps today. Scrapping the Clean Car Standard would help permanently – by taking unnecessary cost out of the market and trusting New Zealanders to choose the vehicles that keep their livelihoods moving. -Dr Parmjeet Parmar, ACT Party list Member of Parliament