Labor and Greens Carbon Dioxide ‘Tax on Family Cars and Utes’ Passes Parliament

A sign indicating an electric vehicle charging station parking bay in Albany, Western Australia, on April 19, 2024. (Susan Mortimer/The Epoch Times)

The Coalition has raised concerns the New Vehicle Efficiency Standard (NVES) will be a “tax” on family cars and utes, following the passage of the legislation through parliament.

The new standard aims to reduce carbon dioxide (CO2) emissions from new cars, sports utility cars, utes, and vans to push more low and zero-emissions vehicles into the Australian market.

The legislation will tally up the CO2 emissions of new cars on the market, rewarding automotive dealers that sell low-emissions cars and penalising those that do not, according to an explanatory memorandum on the Act (pdf).

While the new law will not ban the sale of SUVs or large passenger vehicles, it will reward suppliers that sell cars that emit less carbon dioxide, while imposing penalties on suppliers of polluting cars.

Within the 2024 to 2025 Federal budget, the government allocated $85.5 million (US$56.4 million) to set up a regulator to monitor vehicle emissions data.

Nationals Senator for Victoria Bridget McKenzie said the “family car and ute tax” passed the Senate without any debate on the legislation.

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“Labor refused to allow second reading speeches in the House and Senate, refused debate on the legislation, and has blocked attempts to refer the legislation to investigation by Senate inquiry,” Senator McKenzie said.

She said the legislation would add thousands of dollars to the cost of buying many of Australia’s best-selling SUVs, utes, and four-wheel drives.

“A policy that increases the cost of families buying a new car in the middle of a cost-of-living crisis is something the Coalition cannot support, Ms. McKenzie said.

“Nor can we support a policy that will result in families holding onto their existing cars for longer, slowing down the renewal of the fleet with cleaner and more fuel-efficient vehicles and the process of reducing transport emissions.”

Ms. McKenzie added that the Coalition does not support a tax on the cars Australians love to drive and believes there should be a technology-neutral approach to achieving net zero.

In the Senate, Coalition Manager of Opposition Business Anne Ruston attempted to refer the legislation to the Rural and Regional Affairs and Transport Legislation Committee for inquiry.

However, this motion was defeated by the Labor and the Greens, with 34 against and 32 in favour.

The final version of the legislation was supported by 34 members of Labor, Greens, and independent David Pocock, while it was opposed by the Coalition, One Nation, and United Australia Party (pdf).

Following the passage of the legislation, the Labor government claims Australian motorists will now be able to choose from a bigger range of “cleaner, cheaper to run” cars.

The government said the New Vehicle Efficiency Standard will cut emissions from new passenger cars by more than 60 percent by 2030, which is about half the emissions of new light commercial vehicles.

The standard will only apply to new cars, in a bid to introduce a broader range of hybrid, electric, petrol, and diesel cars to the market.

Climate Change Minister Bowen said this is not just a win for the environment, it’s a big win for motorists around the country who want access to a bigger variety of more efficient vehicles.

“The impact of this shift will benefit Australians for decade,” he said.

Law Will Set Emissions Targets For Cars And Apply Penalties

The New Vehicle Efficiency Standard Bill 2024(pdf) states it regulates the carbon dioxide emissions of certain road vehicles, by setting emissions targets for cars covered by the standard.

“A person to whom the standard applies in a particular year must ensure that their final emissions value for the year is zero or less. Failure to achieve this may result in a civil penalty,” the law states.

“There are a number of offences and civil penalties in relation to the vehicle efficiency standard and the registry. A range of compliance and enforcement powers are provided for, primarily by applying the Regulatory Powers Act.”

Industry Welcome the Scheme But Admit It Will Be Challenging To Implement

Federal Chamber of Automotive Industries Chief Executive, Tony Weber said the legislation will be challenging, but he welcomed having more certainty for the industry.

“This will be challenging, but we’ve always recognised the importance of a Government mandated CO2 Standard for Australia,” he said.

Australian Automotive Dealer Association CEO James Voortman said, “We welcome the passage of the New Vehicle Efficiency Standard, which is something dealers have supported for a long time.

“Make no mistake, this is an ambitious standard which is very challenging to achieve, but dealers are ready to play their part in significantly lowering vehicle emissions.”

Smart Energy Council CEO John Grimes described the passage of the legislation as a “historic day” and said finally Australia has “joined the rest of the world” with efficiency standards for new vehicles.

“Australians will finally have access to smarter, cleaner, more efficient cars with the passage of New Vehicle Efficiency Standards through Federal Parliament today, ” he said.