As Australians prepare to vote in the upcoming federal election, key policy differences between the major parties are emerging around electric vehicles (EVs), Fringe Benefits Tax (FBT) exemptions, and fuel excise relief. These policies are particularly relevant to businesses, fleet managers, and everyday drivers trying to manage transport costs while navigating the shift towards cleaner technologies.
Here’s a balanced breakdown of where Labor and the Coalition stand on these issues and what each approach could mean for consumers and the fleet industry.
1. Electric Vehicle (EV) Policy and Market Access
Labor’s Position:
Labor has implemented the New Vehicle Efficiency Standard (NVES) to encourage car manufacturers to import more fuel-efficient and electric vehicles to Australia. The policy includes both credits and penalties, designed to shift the mix of new cars towards lower-emission models. Supporters argue it increases consumer choice and puts downward pressure on running costs by improving access to newer, more efficient vehicles.
Critics of the policy, however, have expressed concern about potential impacts on vehicle prices, particularly for larger family cars and utes that may struggle to meet emissions targets.
Coalition’s Position:
The Coalition has committed to maintaining the NVES framework but removing the penalty system. This would turn the scheme into more of a voluntary guideline. Their approach is designed to give manufacturers greater flexibility and avoid fines that could increase vehicle costs. Proponents argue that this model avoids passing compliance costs onto consumers.
On the other hand, some in the automotive and environmental sectors suggest that without enforcement, manufacturers may not prioritise Australia for their most efficient or affordable models.
2. Fringe Benefits Tax (FBT) Exemption for EVs
Labor’s Position:
Labor introduced an FBT exemption for battery electric and hydrogen fuel cell vehicles provided through novated leases and company cars for personal use. The policy aims to reduce the cost barrier to EV adoption, particularly for employees in salary packaging arrangements. Many households in outer suburbs and regional areas have taken advantage of the policy to access EVs that were previously out of reach.
Supporters say the exemption promotes environmental outcomes while lowering running costs. Critics, however, have questioned whether the benefits are equitably distributed, noting that high-income earners and large organisations may be best placed to take advantage of the scheme.
Coalition’s Position:
Initially supportive of the existing exemption, the Coalition recently announced plans to wind back the FBT concession for EVs. The party argues that its focus is on broader cost-of-living relief and avoiding subsidies that favour certain vehicle types or income groups. Their position aims to simplify the tax system and target assistance more widely.
However, leasing and fleet associations have raised concerns that removing the exemption could slow down EV uptake and increase the cost of vehicle ownership for those relying on salary packaging.
3. Fuel Excise Cuts
Labor’s Position:
Labor has not proposed a fuel excise cut in this election cycle, instead focusing on long-term strategies to reduce transport costs, such as vehicle efficiency standards and support for EVs. The government’s view is that encouraging the uptake of lower-cost-to-run vehicles will deliver more sustainable savings over time.
This position has been welcomed by environmental groups but criticised by some motorists who feel more immediate relief is needed amid high petrol and diesel prices.
Coalition’s Position:
The Coalition has promised to cut fuel excise by 25 cents per litre for one year, which it claims would save a two-car household around $1,500 annually. The savings would apply across petrol and diesel, with the ACCC monitoring retailers to ensure the cut is passed through.
Supporters of the cut highlight its immediate impact on family budgets and business operating costs. However, critics argue it’s a temporary measure that may not address long-term fuel cost trends or Australia’s emissions reduction goals.
Conclusion: Two Distinct Paths to Managing Transport Costs
Both Labor and the Coalition have developed policies aimed at easing transport costs and supporting choice for consumers. Labor’s focus is on long-term structural change through regulation and incentives for lower-emission vehicles. The Coalition has prioritised immediate cost relief and market flexibility, including fuel tax cuts and less regulatory pressure on manufacturers.
The differences come down to timelines, enforcement, and policy levers — one approach aims to shape the future vehicle market through stronger standards and incentives, while the other looks to preserve consumer choice and deliver short-term financial relief.
For voters, particularly those managing fleets or considering their next car purchase, these contrasting approaches offer two different pathways to addressing the same challenge: how to reduce the financial burden of transport in a changing economic and environmental landscape.
