Electric cars are getting cheaper and government fleets are becoming greener after Crossbench members reached an agreement to pass Labor legislation phasing out public support for petrol-based plug-in vehicles.
Both the Green Party and the independent David Pocock are delighted with a Senate victory as they have agreed to support the government’s push to make electric vehicles cheaper and more available in used markets.
“These changes are a win for motorists, a win for businesses and a win for climate protection,” said Treasurer Jim Chalmers.
The Treasury Amendment (Electric Car Rebate) Bill 2022 was due to pass the Senate this week after the government won crossbencher support. The government’s original plan was to reduce the ancillary service tax on low-emission vehicles to encourage fleet owners and employers to replace petrol vehicles with greener alternatives.
Chalmers and Energy Secretary Chris Bowen said in July the changes could reduce the price of some electric vehicles by as much as $9,000 for businesses or $4,700 for individuals buying a car through reduced pay. The savings would be backdated to July and would apply to cars sold below the luxury car tax threshold for fuel-efficient cars of $84,916.
The tax cuts would apply to battery electric vehicles, hydrogen fuel cell and plug-in hybrid vehicles. However, progressive crossbenchers had expressed concerns about extending the benefits to gasoline-powered plug-in hybrid vehicles.
Amendments on behalf of the Greens and Pococks together were due to be tabled in the Senate on Tuesday afternoon.
The changes would result in support for petrol-based plug-in hybrids phasing out on April 1, 2025. Bandt also said it would prioritize zero-emission electric vehicles in state fleet procurement policies by removing plug-in hybrid vehicles except in exceptional circumstances.
“The Greens have fast electric vehicles,” said Bandt.
“The government fleet will be electric, and if these cars are sold second-hand, it will help bring down the cost of electric vehicles for ordinary people.”
He said it shows the government can be pushed to move “further and faster on climate”.
Pocock, who also proposed the government’s sunset clause, said taxpayers shouldn’t subsidize gasoline cars.
“I welcome the government’s constructive approach of meeting in the middle and banning plug-in hybrids after April 1, 2025. This provides security for fleet companies and allows the government to deliver on its promises regarding the deployment of charging infrastructure over the next three years,” he said.
“The opportunity is to expand access to the clean, efficient technology of the future.”
Pocock said the incentives would directly benefit “mostly wealthier Australians” but noted that expanding fleet vehicle deployment would boost the used EV market in years to come.
“More Australians should enjoy the benefits of owning an electric vehicle, including much lower fuel costs, lower maintenance costs and a better driving experience,” he said.
“Bold and determined action is needed to address high electric vehicle prices, lack of supply and inadequate charging infrastructure.”
It is understood that the Australian Revenue Commissioner would also provide clarifying guidance on where charging infrastructure could also be exempt from ancillary service tax. The changes also require the government to review the legislation once it is implemented, including a reassessment of which vehicle types should be covered by the FBT rebate provisions.
Chalmers said the government had worked with the crossbench “in good faith”.
Shortly after the deal was announced, Greenpeace said Parliament should go further in tackling emissions from cars by enacting stricter fuel efficiency standards.
“As the world progresses in the adoption of electric vehicles, only 3.39% of new car sales in Australia this year were fully electric,” said Lindsay Soutar, senior activist at Greenpeace.
“Strong fuel efficiency standards will keep us in the fast lane towards cheaper and more accessible electric vehicles for Australians, while addressing dirty climate pollution and cost of living pressures.”
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