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NZ can top US "cash for clunkers" oil price plan

28 April 2006

Media Release

New Zealand can top the American's "cash for clunkers" plan to best rising oil prices

New Zealand can top a United States proposal that the Government should buy back "gas guzzling clunkers" from their owners as the world looks for ways to beat rising fuel prices.

The New Zealand's Business Council says governments would be better providing cash grants to people buying climate friendly cars which use up to half the fuel of the gas guzzlers, and also cut green house gas emissions.

The chief energy economist for Deutsche Bank in New York is calling on the Government there to pay consumers to surrender gas guzzling cars and SUVs for crushing and recycling.

Business Council Chief Executive Peter Neilson says the cash for clunkers idea looks clueless alongside the Kiwi proposal to help people cut fuel costs – while making the air and quality of life a lot better.

The Business Council wants the Government to bring in cash grants of up to $3000 for new fuel efficient-low emission cars and up to $1000 for imported cars which are fuel efficient and have low emissions.

People buying gas guzzlers, using more than 14 litres of fuel per 100 kilometres, would pay a $2000 penalty.

This would make the climate friendly vehicles competitive – and help the country move more quickly to quit its fleet of ageing gas guzzling polluters.

"The Americans might consider it a brilliant idea too. You get a modern fleet, not just a bill for a pile of crushed clunkers," Mr Neilson says.

"The UK has introduced tax incentives for climate friendly cars and the US Secretary of the Treasury has a proposal in legislation now, following similar moves by some states."

ENDS

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