FCAI chief calls for 'clarity' from the Greens

The Greens have invoked the ire of Tony Weber, the Chief Executive of the Federal Chamber of Automotive Industries (FCAI).

In a wide-ranging policy statement issued today, the political party has declared that a "17 per cent tax on luxury fossil fuel cars would help cover most costs for scrapping registration fees, import tariffs, GST and stamp duty on electric vehicles, reducing the cost of electric vehicles by around 20 per cent."

The statement also proposes legislating emissions standards for vehicles that would result in "a complete ban on new internal combustion vehicles by 2030."

According to Tony Weber, the statement could be construed to mean the Greens will apply the same 17 per cent tax to all vehicles, not just luxury cars. If that's the case, the price of a $14,000 light hatchback could rise to $16,380.

The inference to be drawn from the statement is that all 'fossil fuel cars' will be considered a 'luxury' item, according to the FCAI boss.

"I think the 'luxury' relates to it being a fossil-fuel car," Weber exclusively told carsales this afternoon.

If it's unclear whether that's the intention in the Greens' platform, Weber says that's a problem for the Greens to address.

"There's a lack of clarity," he said.

"Most policy statements of this magnitude would have more than two paragraphs of content.

"What the problem with this policy is, is that it belies the reality of the marketplace. If you look at what's happened in Australia – without a CO2 standard – since 2002 the drop in CO2 output from new-car sales on average has been 28 per cent. And that's come about through mostly efficiencies in internal-combustion engine-driven vehicles.

"And we're seeing an acceleration of that... through the introduction of things such as hybridisation."

While the reduction in CO2 emissions across the whole market would be due in part to increased EV sales by Tesla and the closure of local manufacturing plants, Weber declared that there were mitigating factors to consider, making the 28 per cent reduction all the more remarkable.

"You've had the rise of the SUV and to a lesser extent the rise of the light commercial [at the same time].

"So despite all that we've had this 28 per cent reduction.

"This is quite dramatic..."

By implication, the Greens are fixated with electric vehicles, but Weber argued that there was plenty of life left in internal-combustion if only fuel quality for the local market would improve.

"With a few limitations – and the greatest limitation being fuel quality – putting that aside, we can bring the best engine technology into Australia and we can supply it to the market...

"But what happens in 2030 or 2040, I don't know, and I suspect no politician knows either. What we should be doing is facilitating an environment in which Australia has the opportunity to bring the best engine technology that provides the best environmental outcome for this country.

"What do we need to do? We need to improve the quality of our fuel, and we need to take away barriers to the importation of these vehicles."

On that point, Weber disputed that the Greens policy to increase EV sales would eventually render the fuel quality issue irrelevant.

"We currently have a 17 million light vehicle car parc. The average age of the car fleet in Australia is 10.4 years, so in round terms, [for] every car that was purchased today, there's one that's 20 years old.

"Even given that [the Greens' proposed incentives to purchase EVs in Australia], if you took that approach, it would take 20 years to remove the vast majority of internal-combustion engines off the road.

"What we should be doing is focusing so that we have the highest quality vehicles on the road. We have to take in the point that most people do drive internal-combustion engines – and will continue to do so for some time.

"This is policy... [that] misses the point. We know that we can get somewhere between three to five per cent improvement by getting higher quality fuel into the marketplace – and that's not for new-car sales, but the entirety of the car parc."

Fuel quality isn't the only obstacle standing in the way of greener engines for cars sold in Australia, according to Weber.

"If you're talking about the latest state of the art technology, one of the great barriers is the luxury car tax. We should be removing the luxury car tax to allow lower-emission, better-performing engines into this country."

And there are safety issues too, Weber said, that are grounds for doing away with the luxury car tax (LCT) – but that's an argument for another day.

Three years ago the Greens mooted a 17 per cent 'fossil fuel car tax' on top of the (LCT), and cemented that policy position for cars priced above the LCT threshold of $66,331 late last year. That would have raised the tax payable on luxury cars from the current 33 per cent to 50 per cent.

As far as today's statement indicates, the Greens' position doesn't appear to have changed. There's no apparent indication that the Greens want all sales of new cars – luxury or otherwise – powered by internal-combustion engines running on fossil fuels to be subject to the 17 per cent tax. But the party aims to end the sale of all internal-combustion cars before 2030 through increasingly stringent CO2 emissions legislation.

And all of that is largely hypothetical anyway, given the Greens cannot establish a government without forming a coalition – and any sort of majority government from the federal election in May would be unlikely to acquiesce to the demands of the Greens, given the known sensitivity of new-car consumers paying more tax.

In response to the Greens' statement, the FCAI has issued a press release with the following recommendations:

• A strong and meaningful environmental policy from the Government, including pragmatic and achievable emissions and carbon reduction targets
• Support of low emission technologies in both a policy and a regulatory context
• Adoption of innovative technologies in Government fleets and Government agencies
• A structured approach to planning and construction of infrastructure, including extensive recharging and refuelling networks
• Clear targets for the uptake of low emission vehicles
• Consideration of incentives to encourage the uptake of new low emission technologies which could include:
- Tax and duty relief
- Lower registration costs
- Across the board removal of the Luxury Car Tax, including on low emission vehicles
- Priority transit lanes, parking, and
• Clear and regular communication to all stakeholders, including consumers, regarding the Government's intent in terms of endorsement and adoption policies