Peter Dutton is keeping tax breaks on electric vehicles in a big backflip

Peter Dutton has backed down from his opposition to tax breaks on electric cars, revealing he will retain Labor’s policy if he wins the election.

Opposition Leader Peter Dutton and candidate for Dunkley Nathan Conroy as they visited a petrol station in Carrum Downs. Picture: Richard Dobson / NewsWire

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Peter Dutton has backed down from his opposition to tax breaks on electric cars, revealing he will retain Labor’s policy if he wins the election, in a move aimed at keeping the focus on the prices of petrol cars increasing under the Albanese government’s vehicle emissions standards.

On Monday the Opposition Leader said a Coalition government would not repeal laws exempting EVs from the fringe benefits tax, despite the policy being among the $100bn Labor spending Mr Dutton opposed in the last parliament.

“We don’t have any proposals to change those settings,” Mr Dutton said.

With the Coalition opposing financial penalties for carmakers that exceed targets under Labor’s vehicle emissions standard, Mr Dutton said he was against “the government’s big tax on hybrids”.

“If people want to buy an EV, that’s fantastic. If people want to buy a RAV4, that’s a choice they should have,” he said. “A lot of Australians would be shocked to know that Anthony Albanese is proposing a $14,000 tax on a Ford Ranger, one of the most popular cars on the market.”

Mr Dutton strongly opposed legislation introduced to the parliament in 2022 to exempt electric vehicles and plug-in hybrids from the FBT, forcing Labor to strike a deal with the Greens that phased out the tax break for hybrids from April.

The policy, which saves EV buyers about $5000 a year on a novated lease, was criticised in March by opposition transport spokeswoman Bridget McKenzie. “What has to be cut from the federal budget to pay for Labor’s pursuit of an EV-only future,” Senator McKenzie wrote on X after The Australian Financial Review reported the measure had cost the budget 10 times more than initially predicted.

Opposition Treasury spokesman Angus Taylor also was highly critical of the measure when leading the Coalition’s argument against it in parliament.

Climate Change and Energy Minister Chris Bowen said Mr Dutton “will backflip on anything if he thinks it will help him at the election”.

“He can’t be trusted with a word he says,” Mr Bowen said.

“He wants Australia to remain the dumping ground for the world’s most expensive to run cars while cutting $600bn to pay for his risky nuclear scheme.

“He is all over the shop. The only thing that’s clear is he’ll cut and Australians will pay.”

The EV tax exemption was part of the $100bn of spending the Coalition opposed in the last term of parliament. This was a figure used in the past week by Mr Dutton and Mr Taylor to claim the Coalition retained fiscal discipline despite engaging in an election spendathon.

When asked by The Australian last week if he would repeal all of the $100bn of spending the Coalition opposed, Mr Dutton would not say.

“All that detail will be provided in due course in the run-up to the election,” Mr Dutton said in Brisbane. “What we’ve said is we are not supporting Labor’s wasteful spending because we don’t want inflation to go up.”

Mr Taylor’s office has distributed a list of Labor spending the Coalition has opposed, with $45bn being through off-budget funds that will not affect the headline deficit challenge.