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Home / New Zealand

Tax cuts for small diesel cars on the cards

By Mathew Dearnaley
27 Mar, 2007 05:00 PM3 mins to read

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KEY POINTS:

Motorists could pay less fuel tax for diesel cars after the Automobile Association complained that the existing scale was unfair to drivers of smaller vehicles.

Transport Minister Annette King has asked officials to investigate overhauling road user charges, which are now the same for anything from a micro-car to a three-tonne goods van.

Ministry of Transport officials are considering whether a more graduated scale should be introduced for light vehicles running on diesel or future biodiesel blends.

Only vehicles heavier than three tonnes pay extra charges, based on each additional tonne of weight.

All 25 diesel vehicles entered in last November's Energywise rally incurred the same road user charge, regardless of how fuel-efficient they were. That amounted to $52.21c for the 1624km they travelled in the rally.

A Fiat Grande Punto entered in the small-car category used only $69.16 worth of fuel, while a 2.5-litre Volkswagen California in the "large lifestyle" group used $136.93 of fuel.

AA technical services general manager Stella Stocks expressed hope after the rally that its results would help motorists to make informed choices based on fuel efficiency when buying new vehicles.

But she said that although diesel vehicles in the rally proved themselves "incredibly fuel efficient", the way road-user charges were applied meant this was neither recognised nor rewarded.

It meant that although the Grande Punto used less fuel than any other vehicle in the rally, its total diesel and road-user charges bill of $121.37 was more than what the drivers of six thirstier cars paid for petrol.

Ministry of Transport environment group manager David Crawford said last night that the charging system would probably remain distance-based, rather than being fine-tuned to take account of the volume of fuel used for every 100km, but it could become more graduated.

That could mean lower charges for lighter vehicles.

Government taxes are included in petrol pump prices, as opposed to road-user charges for diesel, which must be paid in advance.

Vehicles up to three tonnes incur a uniform charge of $32.15 for every 1000km driven.

Mr Crawford noted that the review followed a tenfold reduction last year in the maximum amount of polluting sulphur allowed in diesel, which is to be followed by a further fivefold reduction in 2009, to 10 parts per million.

The minister announced the charging review to the AA's annual meeting after recalling Government announcements late last year of its intention to set minimum harmful exhaust requirements for used vehicle imports, and to raise emission standards for new cars.

"This will allow us to begin to encourage the use of new diesel vehicles, which are far more efficient than their petrol counterparts, without having to worry about the air-quality issues that are associated with older diesel vehicles," Ms King said.

AA motoring affairs manager Mike Noon yesterday welcomed the review, saying his organisation believed that adjusting the charging scale to reward fuel-efficiency was preferable to providing one-off financial subsidies to car-buyers.

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