Small car sector could be hit by increased fuel taxes, writes motoring editor Alastair Sloane
The review into Road User Charges plans to increase government tax on the growing small car sector, judging by its recommendation to hike the charges on diesel vehicles under 5 tonnes, while reducing those for heavier diesel trucks.
More than 50 per cent of passenger cars sold in New Zealand this year are light and small units, many of them diesel-powered.
Five years ago the light/small segment - Honda Jazz, Suzuki Swift, Toyota Corolla, for example - represented about 30 per cent of the passenger car market. Large cars like the Holden Commodore and Ford Falcon occupied 25 per cent.
Now the Commodore and Falcon division has about 12 per cent - and the light/small sector has been as high as 54 per cent of monthly sales.
Sales of diesel passenger cars have gone from 1 per cent of the market in 2004 to 8 per cent last year.
Add in sports utility vehicles - all of them under 5 tonnes - and diesel's share of the market in 2008 was 13 per cent.
There's the money spinner for the Government: sub-5 tonne diesel passenger vehicles are expected to occupy about 20 per cent of the New Zealand market by 2015.
The report, commissioned by the former Labour government in August last year, and released by Transport Minister Steven Joyce, has angered the motoring industry at a time when there is very little good news.
Motor Industry Association chief executive Perry Kerr said he accepted that there was a need for diesel vehicles to pay a charge because the fuel was not taxed at the pump.
"But we have a serious issue with the review's recommendation that the vehicles which cause the most damage to roads will have their costs reduced, and light diesels, which cause no more road wear than petrol-powered cars, have their charges increased," he said.
"This is totally unfair on the suppliers and buyers of small diesel-powered vehicles, which are already being penalised through having to pay virtually the same per-kilometre Road User Charge as a truck."
Carmaker Mini wants Road User Charges to be renamed "Small Car Advantage Minimalism" - or SCAM.
A Mini New Zealand spokesman said SCAM more aptly describes Road User Charges, given that drivers of small, fuel-efficient diesel cars would effectively be subsidising heavy, polluting trucks.
"The diesel Mini Cooper is one of the lightest cars on the road and can drive more than 1000km on a single tank," he said.
"Increasing the levies on this car at the same time as reducing those on trucks is quite literally highway robbery," the spokesman said.
The proposal also recommended against replacing the RUC system with a tax at diesel pumps, "because of costs that a diesel tax would impose on non-transport users".
Said Kerr: "We still maintain that far and away the easiest method of collecting tax from the majority of motorists is at the pump."
He said while the recommendations were not yet set in concrete, "we do expect a positive modification of the RUC charging scale to reflect the benefits that light diesel vehicles are contributing to the environment".
