Cut car prices to beat petrol price hikes

31 March 2006
Media Release

Cutting car prices best way of beating petrol price hikes

Kiwis need relief from higher petrol prices – and the Government should give buyers of fuel-efficient-low emission cars a cash grant of up to $3000, the Business Council said today.

The move will immediately help owners of fuel-efficient vehicles cut petrol bills by up to half – while giving the country its best shot at making quick cuts in green house gas emissions.

The Chief Executive of the New Zealand Business Council for Sustainable Development, Peter Neilson, said: "Kiwis have it coming at them from all sides – fuel price hikes, increasing emissions from cars affecting their health and costing hundreds of millions more under the Kyoto protocol.
"It would make a lot of sense now for the Government to give everyone an incentive to buy fuel efficient-low emission cars. Our vehicles are pumping the equivalent of 14 million tonnes of carbon dioxide into our air every year. That's a fifth of all emissions. We can't immediately do much about agricultural emissions, responsible for nearly 37 million tonnes of CO2 equivalent a year.

"But we can make this easy and highly effective first strike on transport emissions.
"That's the one thing we can do super fast. It will be a win-win for motorists and the country," Mr Neilson said. "We'd like to see it in May's Budget. It would show some action after the all-important talking at climate conferences.

"There's also a benefit in it for the politicians: We believe taking a practical, commonsense action like this will enjoy huge public support and help our economy transform so our quality of life is future-proofed."

The Business Council – whose 51 members' gross annual sales of $33 billion equate to 28% of the country's gross domestic product – has put detailed research on the policy to the Government. The business leaders believe the Government should cut the price of fuel-efficient-low emission cars by making cash payments to buyers of between $1500 and $3000. They also want a $2000 penalty charge added to the price of first-registered gas guzzling vehicles using 12 litres or more of fuel per 100 kilometres.

They want similar incentives for used imports - a $1,000 payment for used vehicles that are highly fuel efficient and meet Euro 4 or equivalent emission standards, and imposing an extra $1,000 to the cost of gas guzzling cars producing high levels of emissions.

The move would cost the Government $97 million a year if 40% of new car registrations are fuel-efficient/low emission.

ENDS

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