Transport makes up a significant and growing percentage of New Zealand’s greenhouse gas emissions. It is estimated that to ensure a stable planet we need to halve fossil fuel use by 2030 and eliminate fossil fuels completely by 2050.

Since 1990, road vehicle emissions have grown faster than any other source of climate pollution, and now make up about 17 percent of all greenhouse gas emissions. Transport emissions are likely to continue to rise in the next few years if there is not sustained government intervention. Previous legislative changes have already encouraged businesses to support clean modes of transport: by removing fringe benefit tax (FBT) from public transport passes provided to employees and removing the FBT from low-emissions active transport, including bikes, e-bikes, scooters and e-scooters. The Clean Car Discount previously resulted in a record uptake of electric vehicles. This Bill seeks to restore momentum to electric vehicle uptake by exempting, for five years, zero emissions vehicles that are provided to staff as part of their salary package. This will provide an incentive for employers and employees to choose zero-emissions vehicles over fossil-fuel powered vehicles until such time that they reach price parity.

Providing employees with cars for personal use attracts FBT at the same rate, no matter what type of vehicle is used. Removing FBT from electric vehicles would be an incentive to restore the momentum to the market for electric vehicles, which should also contribute to a growing second-hand market for electric vehicles in a few years’ time. This Bill also clarifies that, for the purposes of the FBT rules, a double-cab ute must be treated as a car.