Electric vehicle tax cut passes Senate

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Thousands of dollars will be slashed from the price of some electric vehicles in Australia after the Senate approved a tax cut following last-minute negotiations with crossbench senators.

The Electric Discount Car Bill is expected to pass into law Friday after the Senate votes in favor of the bill by a vote of 31 to 24.

The new law is expected to reduce benefits taxes for electric vehicles costing less than $84,916.

Under the new rules, employers can save up to $12,500 on the cost of a package of electric vehicles for an employee, while individuals can save $4,300 on the purchase of a $64,000 vehicle, according to Treasury estimates.

After approval by parliament, the tax cuts will take effect retroactively on July 1 of this year.

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But the rebates were only approved after negotiations between the Labor government, the Greens and Independent Senator David Pocock over whether plug-in hybrid vehicles should qualify for the rebate.

Plug-in hybrid vehicles feature both electric and internal combustion engines, and senators from several banks argued that the bill should not subsidize gasoline vehicles.

A deal on the bill will see the tax cut on hybrid vehicles end in April 2025 and prioritize battery electric vehicles in Commonwealth fleets.

Mr Pocock told the Senate that the electric car tax cut was vital to accelerating Australia’s carbon reductions and addressing the cost of living for motorists.

“The slow adoption of electric cars is costing Australians money,” he said.

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“It costs Australians money every time they go to the fuel pump, and it damages our climate. We need to look at the transition to electric cars in the context of climate change. This is something we need to accelerate quickly.”

However, Coalition senators opposed the new laws, with Liberal Senator Matt O’Sullivan questioning whether electric vehicles were too heavy, whether they would put a strain on the electrical grid, and arguing that they could not pull large loads over long distances.

“Some on the other hand might say, ‘Well, only 10 per cent of Australians could hook up a caravan or a heavy load at the weekend,'” he said.

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“My answer to that is if Labor wants to penalize those in that 10 per cent and put further pressure on their day-to-day living costs simply because they have the guts to own a motorhome, then they need to be at the forefront.”

Despite opposition, Electric Vehicle Council CEO Behyad Jafari called it a “landmark moment” for Australia’s transport industry that would not only encourage more companies to buy EV fleets, but also “turbocharge” the used EV market .

“This law will enable thousands of Australians to get behind the wheel of an electric car, where they can enjoy the benefits of lower fuel bills, less pollution and an enjoyable driving experience,” he said.

– MONKEY

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