Treasury wholly opposed to Labour’s Car Tax

Documents released to National reveal Treasury unambiguously told the Finance Minister the Car Tax shouldn’t be implemented, but the Government ploughed ahead with the policy anyway, National’s Transport spokesperson Michael Woodhouse.

The documents outline a long list of concerns the Government’s lead economic and fiscal advisor had with the Car Tax, those included:

  • The policy only having a marginal benefit in terms of emissions reduction potential
  • The policy not being fiscally neutral and instead carrying high fiscal risk for the Crown
  • The policy would disproportionately burden lower-income households and rural and farming communities

Mr Woodhouse says the Treasury documents show a Labour Government unwilling to listen to advice.

“Whether it be a rushed announcement on a cycle bridge, confused hate speech laws or an unfair Car Tax, Labour does not like to debate its policies or listen to expert voices.

“Treasury was very clear and unequivocal in its advice: Labour’s Car Tax was problematic on multiple levels and it could not support it.

“Labour was told explicitly by Treasury exactly what National could see, that the Car Tax would end up hurting those Kiwis who cannot afford an electric vehicle or for whom an electric vehicle isn’t an option for their lifestyle or business.

“Not only is the Car Tax unfair, Treasury wasn’t convinced it was good value-for-money either. Minister Wood has told New Zealanders that his Car Tax was needed to reduce emissions but advice from Treasury shows that doesn’t stack up.

“It’s unsurprising Labour has ploughed on with a policy most New Zealanders dislike. It acts as though its parliamentary majority allows it to do what it likes.

“This policy should never have got off the drawing board. Labour should’ve listened to Treasury’s advice and canned its Car Tax.”