Before the last election Chris Bowen, the Energy and Climate Minister, promised that he would lower your bill by $275. It took less than a year in government for him to break that promise.
Some politicians seem to operate on the principle that if you break one promise, best just to make another. So, a couple of weeks ago Chris Bowen announced that he would impose new carbon dioxide restrictions on all cars sold in Australia. He promised us all that this would actually lower the cost of driving cars not increase it.
The same guy who promised to cut your power bills by $275 now says that his new tax on cars will lead to lower car prices.
If you are just a little bit sceptical of Bowen’s promise after he just broke a promise, you are right to be.
The Labor Government argues that its emissions standards won’t increase car prices because the US has had the same system and car prices there have not budged. The issue is the US has nowhere near the same system.
Over the last five years, the US has lowered its emissions limits by 25 per cent. Labor is proposing to lower our limits by 60 per cent over the next five years. Labor has no explanation about how a system that is more than twice as stringent as the US could lead to the same outcomes as the US.
Labor has also set the fine for going over their carbon dioxide emissions limits at three times the level that has existed in the US. Labor justifies doing this because last year the fine in the US increased to about the level Labor wants to apply. But Labor is using data from the US when the lower fines prevailed to justify their own higher tax levels.
That higher fine in the US caused General Motors to pay $500 million in one year in fines. GM, and other car manufacturers, have warned, that unless the scheme is changed, average car prices in the US might increase by $4,500.
Given the even steeper cuts to emissions in Australia, the cost impact will be higher. The most popular car sold in Australia last year was the Ford Ranger. According to government figures, the Ford Ranger emits 188 grams of carbon dioxide per kilometre. By 2029, the Government wants this type of car to emit 81 grams of carbon dioxide per kilometre. Even if you assume that car engines will become more efficient at the rate of 1.5 per cent per year (that is the Government’s assumption), the Ford Ranger will emit 168 grams by 2029.
Under the Government’s plan every gram you are over, you will have to pay $100. So, the Ford Ranger will be around 90 grams over the limit, and at a charge of $100 will cost an extra $9000 in 2029.
Given this massive cost increase at a time of record wages, it is not surprising that the Government is refusing to release its modelling to the public.
This week the US Government seems to have buckled, with the *New York Times* reporting that the Biden administration will soften its plans to impose stricter emission limits and target a higher share of electric vehicle sales.
So, the entire justification for Chris Bowen’s promise has been blown up in a week. At least Labor is making progress. Their last broken promise on electricity bills took a year to expose. Their promise on not raising the price of cars lasted just a week.
