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Coalition Pledges to Scrap Penalties in Australia's New Vehicle Efficiency Standard

Opposition Leader Peter Dutton calls the penalties an 'unfair tax' as the Coalition vows to maintain fuel efficiency standards without imposing financial burdens on automakers and consumers.

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The Coalition will scrap a tax it says Australians "cannot afford". But experts argue new standards are leading to more fuel-efficient vehicles.
Rows of cars in a car park, with stacked shipping containers behind them.
The Opposition will scrap incoming vehicle efficiency standards, warning it will "unfairly" drive up the price of vehicles.

Overview

  • The New Vehicle Efficiency Standard (NVES), set to take effect in July, mandates emissions ceilings for automakers with heavy penalties for non-compliance.
  • Peter Dutton and the Coalition have pledged to abolish the penalty mechanism if elected, framing it as a financial burden on families and small businesses.
  • The Coalition plans to retain the framework of the NVES to encourage cleaner vehicles but argues penalties will unnecessarily increase car prices.
  • Industry forecasts suggest NVES penalties could total up to $2.7 billion by 2028, with some manufacturers potentially passing costs onto consumers or removing models from the market.
  • Labor defends the penalties as vital for achieving emissions targets, while critics highlight global automotive uncertainty exacerbated by U.S. trade policies.