Government scraps Clean Car Discount

Thursday, 14 December 2023

The Clean Car Discount scheme has been scrapped by the Government.

Transport Minister Simeon Brown said on Thursday evening that the Government had passed legislation repealing the ‘Ute Tax’ and Clean Car Discount for vehicles registered after December 31, 2023.

“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,” Brown said.

'The previous government’s scheme, which provided subsidies for people purchasing electric vehicles while taxing hardworking farmers and tradies who have little choice about the type of vehicle they need for work, is inequitable and fiscally irresponsible.

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

Brown said that more money had been paid out in rebates than had been received in “ute tax” charges.

“More than $579 million has been paid out in rebates and $13.5 million spent in administration costs, while only $290 million has been collected in charges. This has left taxpayers facing a $302.5 million deficit.

“Our coalition government is committed to increasing the uptake of electric vehicle ownership by supercharging EV charging infrastructure. We will deliver a comprehensive, nationwide network of 10,000 public EV chargers by 2030, while considering robust cost/benefit analysis.”

Rebate applications will also close on December 31.

Green Party transport spokesperson Julie Anne Genter said the Clean Car Discount was the most effective government climate policy implemented so far, and had saved people thousands of dollars on fuel.

“It makes no sense whatsoever for the Government to say they are intending to hit net zero by 2050 and at the same time roll back the most successful policies that are reducing our emissions right now,” she said.

“Earlier this week, the non-partisan Climate Change Commission made clear that addressing the upfront cost of electric vehicles is crucial for reducing transport emissions.”

Genter called on the Government to release all the advice it received before making the move.

Earlier this year, the previous government changed the Clean Car programme to increase fees slapped on higher emitting vehicles, changing the rebates for zero emissions imports and lowering the threshold for eligible vehicles.

It was due to the scheme “successfully exceeding industry and government projections”, then-Transport Minister Michael Wood said, after it was reviewed a year into its full implementation.

He said 20% of all new passenger car sales were electric last year, up from 8% in 2021.

Data on new vehicle registrations shows car buyers rushing to take advantage of the rebates in their final few weeks while appearing to delay the purchase of gas-guzzlers until the new year, when the fees will no longer apply.

Waka Kotahi also noted it received fees on higher-emission vehicles immediately upon registration, but that there was on average a 30-day lag between lower-emission vehicles being registered and rebates being paid.