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Car scheme will cut petrol bills by $727 million

1 May 2006

Media Release

Climate friendly car scheme will cut petrol bills by
$727 million: Will the Government say yes this year?

A policy to provide cash grants to buyers of fuel efficient, low emission cars would see 86,000 vehicles qualify in the first year – and cut their owners' petrol bills by $727 million over the lifetime of the vehicles.

The scheme will also cut vehicle green house gas emissions – and the Government's Kyoto carbon bill – while helping to clean our air.

The grants scheme has been put to the Government by the New Zealand Business Council for Sustainable Development.

The Business Council's Chief Executive, Peter Neilson, today welcomed the Government's first public comment on the scheme, made to TV One news last night.
Acting Minister of Climate Change and Transport Pete Hodgson said: "(On) gas guzzlers versus gas efficiency, there is a case for the Government to look at whether it can assist".

Mr Neilson says: "We hope that means the policy will be taken up in this year's Budget, being presented on May 17, or as an outcome of the Government's coming climate change and energy policy reviews."

The Business Council yesterday released a nationwide UMR poll showing 61% support for the policy to provide cash grants to buyers of fuel efficient, low emission used imported cars. There is 55% support for grants ranging up to $3000 for new cars on first registration in New Zealand, and a $2000 penalty on new gas guzzlers.

The new policy aims to quickly clean up one of the world's oldest and dirtiest car fleets, while delivering clean air and health benefits.

Mr Neilson says further research shows the Government, if it implemented the Business Council's proposed incentives, would pay buyers of 86,003 cars $103 million in the first year of the scheme.

These include new cars with a 20 year fleet life, and used imports with an assumed average of 13 years' life remaining.

The cars' owners will save a massive $727.6 million in petrol (at current prices) over the life of the vehicles. Research on the benefits in Kyoto carbon credits – also expected to be significant – was expected to be completed this week.

Mr Neilson says the country would be foolish not to implement the scheme.

Transport emissions can be tackled quickly – and the quality of life improved.

"At the same time, the financial bottom line is excellent.

"It will be viable for businesses to buy fuel efficient, low emission vehicles for their fleets. The benefits then flow on to second hand buyers," Mr Neilson says.


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