Freebate EV policy ignores existing 20K subsidy

Tue, 09 Jul, 2019

"The Government's proposed electric vehicle 'Freebate' policy ignores the massive subsidies of at least $20,000 for electric vehicles already in place," according to ACT Leader David Seymour

"If people are not already choosing electric vehicles in spite of massive subsidies, they may be trying to tell the Government something about their efficiency as a way of reducing emissions.

"New Zealand already has the Emissions Trading Scheme, the premise of which is to let consumers decide how to minimise their carbon footprint in light of a per tonne cost of emitting carbon.

"Motorists already pay an ETS charge of approximately 6c per litre when buying petrol. They then pay a further 64c of other taxes and, in Auckland, a further 10c regional fuel tax. GST is charged on top of those costs, taking the total tax per litre to around 81c per litre (and 92c in Auckland). Purchasers of electric vehicles are already absolved of at least 80c per litre in tax on their fuel.

"The Green Party has long (incorrectly) argued that tax treatment of oil and gas exploration amounts to a subsidy to the industry. They cannot deny, then, that avoiding petrol taxes is already a major subsidy to electric vehicles.

"Over the lifetime of a vehicle, the subsidy to electric vehicles is already very large. The driver of a Toyota Corolla that travels 300,000km at 8L/100km will pay approximately $20,000 of fuel tax over its life time (80c/L x 8L/100km x 300,000km). For less efficient vehicles, the lifetime subsidy is much larger.

"Government policy already subsidises electric vehicles to an enormous extent, because, besides very small ETS charges on electricity, they do not pay any taxes. The Government might ask itself, why aren't people choosing electric vehicles?

"The Government might consider that electric vehicles are a very expensive way of reducing emissions already, and avoid putting further money into such an ineffective approach.

"The 'social justice' wing of the Green Party might ask why the party is prepared to put even more cost onto those who drive cheap, reliable cars such as petrol powered Toyota Corollas, just so the 'environmental' wing can try out a Tesla.