Across local government, the pressure to deliver on Net Zero commitments is rising fast. With renewable electricity largely solved and buildings well on the path to de-gasification, fleet has become the next—and often largest—chunk of remaining emissions. But at the Fleet EV Expo for Local Government last year, one theme kept resurfacing: salary-packaged vehicles and private-use entitlements are quietly undermining council fleet decarbonisation strategies.
Fleet Managers know the story well. Councils are competing for skilled staff in a tight labour market, and vehicles have long been part of the employee attraction and retention toolkit. For many employees—particularly in professional or managerial roles—the offer of a vehicle is seen as a perk, not a work tool. And that distinction matters.
A Benefit That’s Becoming a Liability
Salary-packaged and private-use vehicles often drive the wrong outcomes for emissions goals. As several panel members noted during the discussion on climate change and net zero targets, these arrangements create structural barriers that slow down council EV transition plans. They tilt vehicle selection towards lifestyle preferences, not operational needs.
In practice, this means that while operational teams are trying to electrify passenger cars and small SUVs wherever possible, the private-use side of council fleets is still filled with:
- dual-cab 4×4 utes
- large SUVs
- vehicles chosen for weekend lifestyle activities rather than daily council duties
These assets rarely align with a Fit-for-Purpose philosophy—and they rarely align with Net Zero strategies.
When Perks Overshadow Purpose
One of the more telling observations during the panel discussion came when someone asked, “why metro councils have so many utes and so many 4WDs?”. It’s not because the work requires them—it’s because the benefit structure encourages them.
When a vehicle is a perk:
- payload doesn’t matter
- towing doesn’t matter
- duty cycle doesn’t matter
- emissions outcomes don’t matter
But fleet teams are still responsible for maintaining, fuelling, and replacing them. And in many councils, workshop effort is being consumed by vehicles that contribute little to community outcomes.
As one panel member pointed out, workshops are spending a disproportionate amount of time servicing and supporting private-use and lifestyle vehicles—time that should be directed toward mission-critical assets such as waste trucks, parks vehicles, and road maintenance equipment.
Straining Limited Fleet Resources
The fleet teams in councils are already stretched. They manage aging workshops, tight budgets, and an expanding compliance environment (CoR, WHS, telematics, asset management plans). Every additional private-use SUV or ute is another asset that must be:
- scheduled
- maintained
- repaired
- replaced
- supported with infrastructure
- considered in emissions reporting
- included in asset management forecasting
The more time spent supporting salary-packaged vehicles, the less time fleet teams have for the heavy lifting of electrifying operational fleets.
That trade-off has never been more serious. Heavy and specialist vehicles already face technology gaps, long replacement cycles, and multi-million-dollar infrastructure challenges. Every hour of workshop time going toward an employee’s weekend vehicle is an hour not spent preparing the real fleet for Net Zero.
A Barrier to Electrification That No Technology Can Fix
EV supply, charging infrastructure and power constraints are genuine challenges—and the industry will solve them. But structural choices inside councils can be far more difficult to shift than technology.
Salary-packaged vehicles:
- lock councils into long replacement cycles
- embed high-emissions vehicles until 2030 or 2035
- complicate charging strategies
- inflate fleet size
- create resistance to downsizing or switching to EVs
- distort the fleet profile away from Fit-for-Purpose categories
Even worse, private-use arrangements make it harder for Fleet Managers to set and enforce policies such as minimum emission standards, body type restrictions, or electric-first procurement rules. When employees have choice, councils often end up compromising sustainability outcomes to retain staff.
A Business-First Approach Is Needed
The message for local government is clear: Fleet must be treated as a community asset, not an employee benefit. If councils are serious about hitting Net Zero and modernising their fleet operations, the shift must start with policy.
Best practice emerging from the panel discussions suggests:
- define what assets are mission-critical,
- prioritise EV transition for those assets first,
- remove or reduce employee choice in fleet categories,
- transition vehicle benefits to cash allowances,
- cap private-use vehicle types,
- enforce Fit-for-Purpose selection before lifestyle preferences,
- ensure fleet policy underpins decarbonisation strategy.
These changes don’t remove benefits—they modernise them. They allow councils to continue attracting staff while ensuring the fleet is managed as the essential operational system it is.
The Bottom Line for Councils
Local governments are committed to Net Zero, but the path is narrowing. Fleet is now the defining challenge—not because the technology isn’t ready, but because internal structures often aren’t.
Salary-packaged vehicles served councils well for decades. Today, they are holding councils back.
To deliver on emissions targets, cut operating costs, and focus scarce fleet resources where they matter most, councils will need to rethink the role of private-use vehicles. The shift is unavoidable—and the earlier it begins, the faster the real progress on electrification will follow.
