√Newly-elected New Zealand Government to scrap ‘ute tax’, electric-car rebates

After a change of government, New Zealand motorists will no longer be subject to a scheme which delivered discounts to buyers of electric cars and hybrids, and taxed those who purchased utes and SUV.

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A New Zealand Government policy which offered generous discounts and rebates to buyers of zero- and low-emissions vehicles – and taxed utes and SUVs at higher rate to pay for the scheme – will be scrapped before the end of the year after a change of government following last week’s election.

According to a report from New Zealand’s Autocar, the newly-elected government has announced it will scrap the ‘carrot and stick’ approach – referred to locally as the “ute tax” – which was meant to be self-funding but has instead wracked up a $NZ279 million ($AU259 million) loss since it was introduced in 2021.

“[The party] does not believe New Zealanders who can afford to buy a brand-new electric car need a subsidy from hardworking taxpayers to pay for it,” the country’s transport spokesperson Simeon Brown was quoted in local media as saying.

The country voted in Christopher Luxon as the new Prime Minister during its general election on 14 October, ousting the previous government after being in power for six years.

The new government has pledged to get rid of the ‘Clean Car Rebate’, as it’s officially known, by 31 December 2023.

The scheme used a sliding-scale to provide financial incentives of up to $NZ7015 ($AU6519) for buyers of electric cars and hybrids, while those purchasing vehicles with higher emissions were taxed up to a maximum of $NZ6900 ($AU6412).

In August 2023, a spokesperson for Australian Minister for Climate Change and Energy, Chris Bowen told Drive the government was not considering New Zealand’s vehicle tax structure.

“The [Federal] Government is not currently considering New Zealand’s Clean Car Discount model,” the spokesperson told Drive at the time.

“The [Federal] Government is delivering on making cleaner, cheaper-to-run cars more affordable and accessible for households and businesses through our Electric Car Discount, and upcoming reforms to fuel efficiency standards.”

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Electric-car buyers in New Zealand will not only miss out on the incentives, but owners will soon need to pay a road-user tax.

Beginning on 31 March 2024, all electric and plug-in hybrid vehicles weighing less than 3500kg will be required to pay the road-user tax, which is expected to be $NZ0.076 per kilometre ($AU0.074/km).

While buying a ute or an SUV will no longer incur a large tax bill at purchase, it’s expected the NZ Government will increase its petrol excise by 12 NZ cents over the next three years to 82NZc/L.

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