The Government's decision to lift the price cap on carbon credits exposes the lunacy of the new tax on petrol vehicles, says the New Zealand Taxpayers' Union.

Union spokesman Louis Houlbrooke says, "The Government seems to understand that it can reduce New Zealand's emissions at will through adjustments to the Emissions Trading Scheme. So why is it duplicating its efforts with a punishing tax on rural New Zealanders and tradies?"

"Drivers of utes and other petrol vehicles are set to pay higher and higher ETS levies. These levies mightn't be popular, but at least they are fair – the cost to the taxpayer is proportionate to the amount of emissions produced."

"By contrast, the planned ute tax unfairly whacks a minority of New Zealanders with disproportionate costs. It seems to be less about reducing our total emissions and more about bullying ute drivers into lifestyle change, costs and practicality be damned."

"Of course, because the new tax is paid on top of the ETS levies paid at the pump, it's a double tax."

"In fact, the ute tax isn't just over-the-top – it's completely ineffective. That's because the total amount of emissions produced in New Zealand is determined by the ETS. Forcing down emissions from one sector simply frees up credits to produce emissions elsewhere."

"Now that James Shaw is demonstrating an understanding of the power of the ETS, he should take the next logical step and scrap the ute tax, along with the other costly and pointless regulatory interventions proposed by the Climate Change Commission."

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