Senate set for fresh climate clash as Greens threaten proposed EV incentives

The government hailed Thursday’s expected passage of its emissions targets as a chance to end the climate wars.

But it could be drawn into yet another fight over its election promise to make electric cars cheaper during negotiations with the Greens.

At issue is whether hybrid cars – that run on both electricity and petrol – should be included in the proposed electric car discount bill, which would exempt electric cars costing less than $85,000 from fringe benefits tax.

The Greens think not.

“The government should not create a new fossil fuel subsidy,” Greens leader Adam Bandt toldThe New Daily.

“The Greens will raise our concerns with the bill directly with the government to ensure we get more electric vehicles on the road.”

Clashing views

Though almost certain to become obsolete, hybrid vehicles are projected to represent about 15 per cent of the market for low-emission cars by decade’s end, modelling commissioned by the Labor Party forecasts.

This currently includes the cheapest models of an expensive technology.

Richie Merzian from The Australia Institute cites international research showing hybrids draw on battery power one-third of the time when driven for personal use; for work cars this drops to one-fifth.

But Treasurer Jim Chalmers said the bill would help expand the market for affordable electric cars, a combination he describes as cutting pollution and taxes.

“Who could possibly oppose a tax cut to make electric vehicles cheaper for businesses and for workers in a way that increases the stock of electric vehicles in our country?” Dr Chalmers told Parliament on Wednesday.

The Greens will need convincing after the Coalition resolved to vote against the bill in its current form, citing concerns about its estimated $4.5 billion cost over a decade.

Shadow Treasurer Angus Taylor said the bill would increase demand in the already tight electric vehicle market, arguing taxpayer money would be better spent on building more charging stations.

“The government cannot say what this bill will deliver in terms of emissions reduction. They cannot say what it will deliver to (the) low-emissions vehicle market and they cannot even say what criteria will make it a success,” he said.

Without the Opposition, the government will need to cobble together 13 votes from across the Greens and one other in the Senate to pass this bill into law – and others still to follow.

That is throwing up some unusual potential allies from among the six Senators who sit on the crossbench.

One Nation is planning to vote against the bill.

A party spokesman told The New Daily the party was concerned about the safety of electric vehicles and the availability of electric vehicle infrastructure in Australia.

Strange bedfellows?

But the government has secured the unlikely support of at least one crossbencher on its right – the United Australia Party’s Ralph Babet – who told The New Daily he was open to reducing all tax “everywhere, anytime, for any reason’’.

A more likely government ally, independent Senator David Pocock, who campaigned on stronger action on climate change, is meeting with the government to discuss possible amendments.

The electric car discount bill was one of the first pieces of legislation introduced by the Albanese government.

If the legislation passes Parliament, the government estimates employers could save up to $9000 a year on vehicle costs, while individuals could recoup up to $5000 if they lease their electric car through their employer.

The Senate’s Economics Legislation Committee has recommended the Senate pass the bill, despite noting several stakeholders had expressed concerns that it might not lead to greater electric vehicle uptake in Australia.

University of Melbourne tax expert Professor Miranda Stewart told the committee that the tax exemptions would impact “a rather narrow class of employee beneficiaries and provides the largest benefit to the highest income earners”.

The Greens will settle their position if they achieve consensus at a party room meeting.

The Senate is expected to pass Labor’s bill to create a legally binding national target to cut greenhouse emissions by 43 per cent by 2030 on Thursday.

The Greens agreed to support the pivotal bill after initially demanding that the government ban new coal mines.