Treasury opposed Clean Car policy

The Government ignored Treasury advice on implementing the clean car scheme according to documents released to the National Party.

National’s transport spokesperson Michael Woodhouse says it shows the Government’s lead economic and fiscal advisor had a long list of concerns with the scheme.

The policy, announced by transport minister Michael Wood in June, sets out to penalise higher emission vehicles such as utes and reward low to zero emission vehicle purchasers. 

According to Woodhouse, the Government was advised the scheme would only have a marginal benefit in terms of emissions reduction potential; the policy would not be fiscally neutral and instead would carry high fiscal risk for the Crown; and the policy would disproportionately burden lower-income households and rural and farming communities. 

Released under the official information act, and reported by NewstalkZB, emails reveal Treasury officials made their concerns known in March this year. 

“There is a lack of evidence on the efficacy and marginal benefit, in terms of emissions reduction potential, of the Clean Car Discount,” an email to finance minister Grant Robertson said.

“Four-wheel drives and utes are required for farming and business purposes and there are currently no low-emission substitutes… on the market.”

It goes on to say the clean car policy would be a “burden on rural and farming communities”.

“Four-wheel drives and utes are required for farming and business purposes and there are currently no low-emission substitutes… on the market.”