The Senate committee charged with reviewing the government’s proposed new legislation for the exemption from fringe benefits tax (FBT) for electric vehicles (EVs) has now handed down its report.

Some of the key themes picked up in the committee’s report include:

  • The submissions made to the committee were broadly in support of the proposal as a first step towards reducing emissions;
  • Concerns were raised as to the relatively narrow set of taxpayers who would benefit from the changes, with a higher benefit going to higher income earners;
  • The changes on their own, were felt by some to not adequately address the cost gap between EVs and higher emissions vehicles;
  • There were differing views as to whether plug-in hybrid EVs should be covered by the FBT exemption, with the Greens in particular recommending they be removed and the cost savings deployed to support further EV uptake;
  • Supply chain issues and Australia’s lack of fuel efficiency standards were noted as hampering the effectiveness of the measures; and
  • There was no work done to quantify the expected emissions abatement to result from the new measures.

Whilst officially, the committee has recommended the draft legislation be passed, this was based on the view of the government representative committee members. The other members all dissented and oppose passing the legislation in its current form. The Coalition have since confirmed that they will not be supporting the bill.

A couple of proposed amendments have since been introduced to parliament – to include hybrid EVs and to include imported second hand vehicles.

Watch this space in terms of any further amendments and the final outcome.

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