Driven out
By David Hughes
First published in the MRC’s Watercooler newsletter. Sign up to our mailing list to receive Watercooler directly in your inbox.
One area where Australia comes close to leading the world is motor vehicle ownership. There are almost as many vehicles as people, with over 780 vehicles per 1,000 people. Some people suggest it’s because cars, SUVs and utes have become an indulgent lifestyle choice. But I suspect there is more to the story.
Australia is a unique place to live. We have the third lowest population density in the world (after Greenland, Mongolia and Namibia). We also have the longest city in the world with Perth stretching 150 kms. We also travel further for work than most other nations. A recent report found that Sydney's average daily commute time is 63 minutes. And our public transport systems rarely, if ever top any lists for the most convenient, reliable and cheapest in the world.
Our citizens often need to travel long distances for work, family, and leisure, more so than in many other countries. This reality is inherent in a vast country like Australia, and governments should acknowledge this fact. They have been complicit in the development of our expansive cities and towns with inadequate roads and public transport.
Given our heavy reliance on vehicles to work and live our lives, any policy that seeks to limit our access to our vehicle of choice is going to be closely watched by Australian families. Earlier this month, the Government released a complex proposal designed to make some vehicles cheaper and some more expensive with the goal of reducing net emissions. In short, the policy will set an emissions cap for each vehicle manufacturer to meet. If the company sells more cars over the cap than under the cap then they will have to buy offsets. Of course, any additional costs will be passed on to consumers through higher purchase prices for vehicles.
The Government has stated its preferred threshold for this tax to kick in is on vehicles that emit more than 141 grams of CO2 per kilometre on average. To put this into context, in 2019, the average new light vehicle sold in Australia produced 181 grams of CO2 per kilometre.
Many discussions around this policy have framed it as a levy on utes and large SUVs. However, it's crucial to understand that any vehicle emitting beyond the 140 CO2(g/km) cap could see a price hike. This isn't limited to larger vehicles; it could also extend to many compact and affordable models, like the Kia Rio or Mazda 3. To demonstrate the far-reaching impacts of this blunt-instrument policy, we've compiled a comprehensive list of 572 cars available in Australia that emit over the threshold and could be impacted. Access the full list here.
Despite the Government’s refusal to publish modelling on the projected impact of the new tax on the cost of popular cars, the Chamber of Automotive Industries has provided some analysis. According to its modelling, the price of the nation’s 20 best-selling cars could go up by anything between $1,280 and $13,250. Below are a few examples to illustrate this.
Make no mistake, this is more than just a tax on tradies' utes. It is a tax on families that will disproportionately impact working families from the outer suburbs and regional Australia.