Environment Minister, Josh Frydenberg, has moved quickly to hose down reports the government is planning to introduce a new “carbon tax” on cars that will see the price of some popular vehicles soar by up to $5000. From The Canberra Times:
The Department of Infrastructure and Regional Development has released proposed new fuel efficiency standards for consultation, which car sellers have slammed as “unrealistic and ill-considered”.
Many of the country’s most popular models – such as the Toyota HiLux, Corolla, Hyundai i30 and Ford Ranger – would not meet the new guidelines, which aim to reduce the average national fleet emissions to the equivalent of 105gCO2/km from around 335gCO2/km in 2015.
Mr Frydenberg on Wednesday said: “This story is a beat up.
“The government has no plans to introduce a carbon tax on the family car – it’s about as likely as Elvis coming back.”
While disputing the terminology of a “carbon tax” on cars, Mr Frydenberg acknowledged the government had been consulting with the vehicle industry on new fuel standards since 2015…
Mr Frydenberg said 80 per cent of the world’s light passenger vehicle fleet – including countries such as the United States, the UK and Canada – have fuel efficiency standards but Australia does not.
Bringing Australia’s fuel efficiency standards into line with other developed nations makes sense. Moreover, there could be ways of implementing the new rules without punishing consumers with higher car prices.
At the same time as the new standards are introduced, why not also:
- abolish the 5% tariff on automotive imports;
- scrap the the luxury car tax, which is set at 33% on the marginal cost of vehicles above $60,316, and serves as a defacto tariff designed to raise the cost of more expensive imports and make local models, such as the Fairmont Ghia, more attractive; and
- Scrap Australia’s unique technical standards in favour of global rules, thereby opening the market to a wider array of foreign cars and reducing overall import costs.
With the local automotive manufacturing industry shuttering in October, there is no longer any justification in maintaining the above policies and, in the process, punishing Australian consumers with over-inflated car costs.
The new fuel efficiency standards should be introduced as part of a package of automotive tax/regulatory reforms.