Tuesday 9 July 2019

New car sector welcomes Government discussion on proposed Clean Car initiatives

The Motor Industry Association says we welcome sensible discussions on ways to make vehicles cleaner and greener and the new car sector will work constructively with the Government on what we believe are the best mix of policies to achieve that outcome.

The Government has just released its discussion paper on two proposals it considers will accelerate the transition to a low emissions vehicle fleet.

MIA Chief executive David Crawford says that while the industry doesn’t agree with all of the Government’s proposals it is keen to ensure that it is successful in reducing CO2 emissions from the light vehicle fleet in New Zealand.

However, he says there is some misunderstanding about the model range that new vehicle distributors can import into New Zealand.

“While the Government believes that we are not importing the best models, the reality is that new vehicle distributors simply supply what people buy.

“Our view is that the best policies to achieve a reduction in emissions are those that influence purchase decisions. Changes in models supplied to New Zealand will follow if the demand is altered.

He says the proposed Clean Car Discount scheme, where vehicles attract either a rebate or penalty at point of sale depending on their emissions, sends a very clear signal to consumers and will over time increase demand for lower emitting vehicles. In our view it is the most powerful policy available to this Government to influence car purchase decisions.

However, he has concerns about the proposed Clean Car Standard which sets average weighted emissions targets that importers must meet.

“That implies that distributors have significant influence on vehicles consumers choose to buy as well as vehicles manufacturers produce.

“This is not the case as New Zealand is a tiny global market, and therefore this policy is unlikely to achieve the results that the Government is seeking.

“Policies aimed at controlling supply into our market are generally not favoured as they impose artificial controls that often distort that market.

“They can also create a range of unintended outcomes such as people holding onto older less safe and more polluting cars longer than they would otherwise and it is also likely to lead to price increases for all new vehicles entering the market.”

He says the MIA is also disappointed to see that a sliding scale FBT (fringe benefit tax) regime and better depreciation rates are not up for consideration, as these two policies in combination with a clean car discount would have a huge impact on accelerating the uptake of lower emission vehicles.

ENDS

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