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Transportation on the move

Minister walking the talk and delivering on a promise, but is he heading in the right direction? Whether you agree or disagree with the way the coalition Government is tracking in regard to its transport policies, it’s pretty clear the current Transport Minister Simeon Brown is not sitting on his hands or taking the long road to announce change.
 |  Jack Biddle  | 

He seems energized to get on with implementing the coalitions promise of doing a U-turn on many of the previous Governments Transport agenda. He is also looking like a minister not afraid to stand up and answer his critics with a no nonsense and direct approach when questioned or challenged.

I can’t say I fully agree with some of his comments and actions to date, especially the handbrake being applied to many local authority projects moving forward, designed to encourage cycling and walking especially.  As a keen cyclist, I have seen the benefits of safer and far more enjoyable cycling with the introduction of dedicated cycle lanes, trails and pathways already in place throughout the country, many of which have been supported by NZTA funding. Sadly, that doesn’t include the greater Coromandel by the way.     

So where are we at currently?  What are the benefits and disadvantages of the Minister’s swift change of direction in regard to our passenger fleet?

First up and as promised, was the removal of the ‘Ute Tax’ and the Clean Car Discount rebate for vehicles registered after 31 December 2023. The big plus with this change was those that needed and relied on operating a diesel ute were no longer penalised for their purchase, when there were no current alternatives. This applied especially to commercial businesses such as forestry, farming and tradies.

The Clean Car Discount on the other hand was offered as a monetary incentive for motorists to move into the electrified passenger vehicle fleet in some way. The scheme, when introduced initially, was an almost overnight success and created a huge demand and no doubt profit windfall for new and used vehicle distributers but came with a massive financial cost to the Government.

The scheme was designed to achieve fiscal neutrality, with the ‘Ute Tax’ charges supposedly covering the rebates and administration costs of the electrified vehicle incentive. However, in reality, millions of dollars more were paid out in rebates than were ever received in the ‘Ute Tax ‘charges, with taxpayers at the end of the day having to foot the bill.

The big downside for many with these recent changes is utes are back in demand big time while the sales of many fully electric vehicles and plug-in hybrid vehicles have basically fallen through the floor. Worst, is the current resale value of many of these vehicles with reports of some owners looking to lose almost 50% in depreciation in the first year of ownership alone. 

As new updated models come to market, most new vehicle dealers target existing customers to trade up to the all-new and improved models. The trade-in price of a current fully electrified or plug-in hybrid vehicle will no doubt be a very hard conversation to enter into, but the question is maybe more about those dealers actually wanting to trade such a vehicle at all.

Utes on the other hand currently rule the roost when it comes to the purchase of a new passenger vehicle and it’s not just the commercial sector that are putting up their hands to buy especially now the ‘Ute Tax’ has gone.

What our Minister of Transport has created by removing the ‘Ute Tax’ is a potentially massive increase in the numbers of these vehicles on our already crowded main arterial roads and motorways for the foreseeable future. These vehicles will not be hard to sell on the used market either, so owners can expect to receive healthy trade-in prices when it comes time to update.

Next move by Minister Brown was to announce the introduction of Road User Charges for all electric vehicles including plug-in hybrids from the 1stApril this year. Sounds like a sensible plan as shouldn’t all road users contribute?

Currently motorists contribute to the Governments roading programme mainly via:

• Vehicle relicensing

• Road User Charges (example – diesel vehicles)

• Petrol excise duty

The future plan is to remove the fuel excise duty and change all vehicles over to the Road User Charge (RUC) model. On the surface it gets my tick of approval as motorists will only pay for kilometres travelled and vehicle weight rather the amount of fuel consumed. The big winners should be lower income households who traditionally own older and less fuel-efficient vehicles. But does the coalition Government along with our Minister of Transport have an actual plan to reduce the number of vehicles on our already heavily congested towns and cities? Just as important, is there a plan to improve air quality?