Peter Dutton slams the brakes on EV tax break pledge

The Opposition Leader has committed another campaign blunder, wrongly declaring the Coalition would retain Labor’s tax breaks for electric vehicles.

Opposition Leader Peter Dutton on the hustings. Picture: Richard Dobson / Newswire

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Peter Dutton has committed another campaign blunder, wrongly declaring that the Coalition would retain Labor’s tax breaks for electric vehicles in what marks the second major policy backflip by the opposition since the ­election was called.

Introduced in 2022 as part of Labor’s broader efforts to decarbonise the economy, the scheme allows drivers to deduct the cost of an electric vehicle worth up to $91,387 from fringe benefits tax when it is bought through a novated lease.

While the Coalition voted against the scheme in parliament, on Monday the Opposition Leader gave a definitive “no” when asked if he would repeal the FBT discount for electric vehicles if he became Prime Minister.

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

But in a statement issued on Wednesday afternoon, the Opposition Leader reneged on that commitment, stating he would scrap the tax break as the Coalition scours the budget for savings.

“The Coalition will … unwind Labor’s taxpayer-funded and badly designed electric car subsidies, saving upwards of $3bn over the forward estimates and $23bn over the medium term,” it read.

A Coalition source suggested Mr Dutton might have misheard the question on Monday.

Following Mr Dutton’s strong opposition to the FBT legislation in 2022, Labor was forced to strike a deal with the Greens that phased out the tax break’s ­coverage of hybrid vehicles from April.

The policy, which saves ­electric vehicle buyers about $5000 a year, 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 in a post on X after The Australian ­Financial Review reported that the measure had cost the budget 10 times more than initially predicted.

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

Climate Change and Energy Minister Chris Bowen blasted Mr Dutton’s latest policy U-turn, and questioned Mr Dutton’s readiness to govern.

“This is work from home all over again, but worse,” Mr Bowen said, referring to the Coalition’s now-dumped plan to force ­Canberra-based federal bureaucrats back to the office full-time.

“Two days ago Peter Dutton clearly said he would keep the EV tax cut. Today he’s scrapped it.

“If he can’t keep a policy for two days, how can be prime minister for three years?”

The Coalition continued to face scrutiny over its return to work mandate on Wednesday, even as Mr Dutton had jettisoned the policy more than a week ago after voters were left with the impression that it would extend to other sectors beyond the public service.

Appearing on ABC News, ­opposition finance spokeswoman Jane Hume – who was quoted at the weekend saying that the ­­mandate hadn’t come at the right time – was pressed if the policy would make a return.

“No,” Senator Hume said. “This policy was a mistake. We’ve said that and we will not go ahead with that.”

Pressed if it was her idea, ­Senator Hume said it “fell under my portfolio” but did not say whether she had devised the work from home ban.

“It was a public service policy, not supposed to apply to women Australia-wide,” she said.

“It was a mistake. We will not proceed with it.”