Climate Change Minister James Shaw has defended the Government's new scrap-and-replace scheme for electric vehicles after the policy faced heavy criticism from Opposition parties.
The Government revealed its first Emissions Reduction Plan which showed how emissions will be reduced over the coming decades as the country targets net-zero by 2050.
Part of the $2.9 billion plan will be allocated towards getting Kiwis out of their gas-guzzlers and into electric vehicles. The new scrap-and-replace scheme will cost $569 million, subsidising low and middle income families to ditch their clunkers for an EV.
In the new scheme, the Government would help Kiwis 'scrap' their old cars with a rebate to help buy new electric vehicles.
But not all parties are happy with the idea. ACT's Climate Change spokesperson Simon Court told AM on Tuesday the scheme is "totally unnecessary".
"It's totally unnecessary in terms of carbon emissions as the Emissions Trading Scheme already puts a cap on New Zealand's transport emissions and it's also a complete waste of taxpayer money," Court said.
But Shaw defended the $569m scheme, saying by getting lower-income households into more fuel-efficient vehicles, it will lower their living costs overall.
"Most New Zealanders drive second-hand cars and people on lower incomes tend to purchase the cheapest models available," Shaw told AM host Ryan Bridge.
"They tend to be by definition older and less efficient and actually very expensive to run, so whilst people might be available to afford the up-front cost of the vehicle, what happens over time is that those vehicles cost an enormous amount in both maintenance and fuel cost.
"So one of the things we can do to lower household living costs is to give people the ability to switch away from those kinds of vehicles. So that is the intention of the scrappage scheme that we are proposing."
Shaw noted the scheme is starting with a trial of only 2500 vehicles, which would inform their final policy design.
He told AM there had been examples overseas where similar schemes had worked well, but also those that hadn't been so successful.
Bridge questioned Shaw, arguing the scheme seemed very expensive - but the Climate Change Minister said "vehicles are a reasonably expensive asset" and people could receive a rebate of between $6000 to $10,000 per vehicle.
Shaw said the point of the policy is not about handing out free cash for electric cars.
"I think it's a mistake to say it's all about purchasing electric vehicles, it isn't, there are a number of other options available," Shaw told AM.
"One of the other things we are looking at is in some cases people might be able to use that to subsidise public transport or to buy e-bikes in some places where that is the best thing for them to do.
"But also the point is for many houses actually just getting another petrol car but one which is way more efficient would have a huge beneficial impact on their household living costs because the cost of fuel would be so much lower."
Petrol prices in Auckland hit an all-time high of $3.15 on Thursday last week, and Shaw reiterated if lower-income families moved away from vehicles that chug through fuel, it could "dramatically lower their household living costs".
"If you look at second-hand [Toyota] Prius' there are thousands of them in the market at quite low prices," Shaw said.
"If you're able to just get them [Toyota Prius] into the zone where a low-income family was able to afford them, then that would perfectly suit their needs and then that would really dramatically lower their household living costs."
Watch the full interview with James Shaw above.
