Opposition leader Peter Dutton’s Coalition has come under intense criticism for its sudden policy reversal regarding electric vehicle (EV) incentives ahead of the May 3 federal election. The party has announced plans to scrap the current EV incentive scheme if elected, despite previously maintaining it would remain unchanged.
Policy Reversal and Criticism
The Coalition’s joint press release, issued by Dutton, shadow treasurer Angus Taylor, and shadow finance minister Jane Hume on April 23, revealed plans to unwind the existing ‘taxpayer-funded and badly designed electric car subsidies.’ This move is expected to save $3 billion over the forward estimates and $23 billion in the medium term, with funds redirected towards increased military spending.
The existing EV incentive provides a fringe benefits tax (FBT) exemption for electric vehicles priced under $91,387 purchased through novated leases. Critics argue that removing this incentive will negatively impact ordinary Australians during a cost-of-living crisis characterized by rising transport costs.
NALSPA (National Automotive Leasing and Salary Packaging Association) condemned the move, stating it would ‘hurt everyday ordinary working Australians.’ The EV Council, which had previously praised the bipartisan support for the incentive, also criticized the decision, warning it would increase costs for motorists and stall progress toward cleaner transportation.
Industry Reactions and Emissions Concerns
EV Council CEO Julie Delvecchio emphasized that the FBT exemption had been ‘highly effective’ in making EVs more affordable while reducing transport emissions. Polestar, an electric car manufacturer, strongly criticized the Coalition’s plans, accusing them of demonstrating a ‘complete lack of understanding’ of EV benefits.
The controversy extends beyond EV incentives, as the Coalition also plans to scrap fines related to the New Vehicle Efficiency Standard (NVES), designed to reduce new-vehicle emissions. Polestar pointed out the contrast between the proposed removal of EV incentives and the existing LCT exemption for vehicles like the Ford Ranger Raptor, which they argue costs $250 million annually in lost tax revenue.
Environmental and Economic Implications
Critics argue that the Coalition’s approach contradicts its stated support for reaching net-zero emissions by 2050, a goal also pursued by the current Labor government through initiatives like the EV incentive and NVES. The decision has sparked a heated debate about transport policy, emissions targets, and the economic implications of the Coalition’s proposed changes.
As the federal election approaches, the controversy surrounding the Coalition’s electric vehicle policy continues to intensify, with various stakeholders expressing concerns about the potential impact on Australian motorists, transport emissions, and the automotive industry’s transition to cleaner vehicles.
