Australia federal election 2025: stoush looms over vehicle emissions, tax breaks

The Coalition and Labor are heading for a showdown over the twin issues of vehicle emissions standards and the price of plug-in hybrids.

The Coalition is targeting Labor’s vehicle emissions standards ahead of the upcoming election. Picture: Ian Currie

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The Coalition will abolish or water down Labor’s vehicle emissions standards and provide more incentives for hybrids, as opposition energy spokesman Ted O’Brien falls short of promising to reduce electricity prices in the first term of a Dutton government.

Opposition transport spokeswoman Bridget McKenzie said ­increasing the price of plug-in ­hybrids when the tax breaks phase out on April 1 did not make sense “if you want to lower emissions”.

She would not say whether a Coalition government would permanently include hybrids on the carve-out of the fringe benefits tax for vehicles on a novated lease, as called for by the sector.

Labor intended to permanently include plug-in hybrids in the tax breaks but they were phased out of the benefit under an agreement with the Greens.

“Because the Liberal Party opposed the EV tax cut in the Senate, it was necessary to agree to the phase out of the EV tax cut for (plug in hybrids) to ensure its passage. This is the outcome of the Liberal Party’s opposition to EV tax cuts,” a spokeswoman for Energy Minister Chris Bowen said.

Senator Bridget McKenzie does not rule out going to the election vowing to abolish the scheme. Picture: Martin Ollman

Emissions policy on its way

Senator McKenzie was also critical of the impact of the New Vehicle Efficiency Standard and did not rule out going to the election vowing to abolish the scheme.

“The Coalition voted against the NVES when it came to parliament … and we are in the process of developing a low-emissions transport policy that we will make clear … closer to the election,” she said.

Nationals leader David Littleproud said the NVES would push up the price of popular cars from July 1, including the Toyota RAV4 and the Ford Explorer.

“We need to just allow time and technology to catch up,” Mr Littleproud said.

“Our international commitment is 2050, not 2030.”

Mr Littleproud said it was not only regional Australians and tradies who will be negatively impacted by the NVES, which the car industry argues has targets that are too steep.

“The tool of the trade for a young family is a RAV4,” he said. “If you want to put in a car seat and go to the shop and put a pram in, a little sedan is not going to do the job. You need an SUV.

“What we need to do is not add more costs in a cost-of-living crisis on Australian families. I don’t think Australian families realise that if you go and buy a car after July 1, the price is going up because there’s a tax coming.”

Nationals leader David Littleproud believes the NVES will push up the price of popular cars from July 1. Picture: Fia Walsh

Gas-led price hope

Mr Littleproud said the Coalition would bring electricity prices down by expediting the supply of new gas. But Mr O’Brien did not commit to reducing electricity prices under a Coalition government, only saying prices would be lower than under Labor.

When asked if the Coalition had modelled electricity prices under its policy, Mr O’Brien pointed to the claim in Frontier Economics analysis that energy infrastructure under the nuclear plan would be 44 per cent cheaper than Labor’s policy.

This analysis did not say anything about the price of electricity, but Mr O’Brien said it would deliver a “massive $263bn in savings for households and businesses”.

“Anthony Albanese’s reckless policies are driving up costs, threatening our energy security and pushing households and businesses to the wall,” he said.

‘Massive policy shift’

Energy expert Bruce Mountain said he did not think electricity prices would come down under either the Coalition or Labor.

“Increasing gas supply in the east coast in a meaningful quantity such to bring domestic prices down is going to be a massive policy shift, the likes of which successive ministers over the past two decades have not managed to achieve,” Mr Mountain said.

In The Australian last week, Mitsubishi Motors Australia chief executive Shaun Westcott said the government needed to rethink the aggressiveness of its targets aimed at lowering the carbon footprint of new cars by 60 per cent by 2030.

The sector is anticipating the NVES would lead to car suppliers paying $2.7bn in fines by the end of the decade for missing carbon-emission requirements.

With fines to begin from July, Federal Chamber of Automotive Industries chief executive Tony Weber said the industry would face a double hit of steep targets and the phasing out of the tax break on hybrids.