Frydenberg: Carbon tax report that would increase car prices by $5K is false

Josh Frydenberg has rubbished reports that the Australian government would introduce a new carbon tax that would see the prices of some popular vehicles increase by $5,000. The Environment and Energy minister said on Wednesday that the report was “beat-up.”

According to the proposal obtained by the Daily Telegraph, the Turnbull government was planning to slap emissions penalties on car distributors who failed to meet new fuel efficiency targets. From 2022, new cars would carry a surcharge of $100 for every gram of carbon per km generated and failed to offset over a three-year-period. The cost would be passed onto consumers.

This would mean that some of the most popular vehicle models in the country would not be able to meet the new guidelines and therefore would have price increase of up to $5,000. Australian Automobile Association said the proposal would add $3,925 to the price of Toyota Accent.

“This would be one of the most extreme efficiency standards in the world and will lead to car prices going up and motorists having fewer cars to choose from,” chief executive Michael Bradley said. Federal Chamber of Automotive Industries’ acting chief executive Tony McDonald also said the proposal would see “thousands of dollars in emissions penalties” added to the price of a car.

The proposal’s four-year phase-in period would start in 2020 when car distributors would have to report car sales and efficiency levels. By 2022, 65 percent of car sales would be required to meet the target. By 2025, 100 percent of car sales would be required.

Frydenberg, however, said the report was a “beat-up,” adding to ABC radio on Wednesday morning that the carbon tax story was “about as likely as Elvis coming back.” The minister said there has been no government decision yet and they are still consulting with the industry.

A spokesman for Prime Minister Malcolm Turnbull also said that the government has ruled out introducing carbon tax on family cars. The proposal published online was just a “consultation paper” that was awaiting feedback from the industry.