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Emissions targets welcome but VACC has some questions

3 May 2021

The State Government pledge to halve Victoria’s greenhouse gas emissions by 2030 – central to which is the plan to increase sales of new zero emissions vehicles (ZEVs) to 50 percent – is a welcome move, but VACC has some concerns.

Victorian motorists can now receive a $3000 subsidy when buying ZEVs. Applicable to cars only, motorists are able to access the subsidy once and businesses will be able to apply twice. However, the cheapest ZEV in the local market is $44,000 and the subsidy cap runs out at the luxury car tax threshold of $69,000. That means only five models meet the criteria.

There are fewer than 7000 ZEVs currently registered in Victoria. The State Government’s subsidy announcement should significantly increase that number, but VACC is not a supporter of distorting markets through subsidies, as this can unfairly benefit one business at the expense of another. 

Also contentious is a new road-user charge announcement. The 2.5 cents per kilometre for ZEVs – which includes hydrogen – (two cents for plug-in hybrids) has been criticised by some groups. The Chamber contends that it is the fairest way to improve and maintain the state’s road network. If a motorist uses the roads, they should help pay for the build and upkeep.

The Andrews Government’s announcements include a pledge to power all government-owned enterprises – including schools and hospitals – by renewables from 2025. There are also budgets to reduce agricultural emissions and increase the uptake of ZEVs for public transport use. The government will dramatically increase its own fleet of ZEVs by purchasing 400 new cars, and build more charging infrastructure at a cost of $19 million.

VACC has been invited to sit on the government’s expert panel to ensure industry concerns are reflected in any new policy and infrastructure decisions.

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