Ms Catherine King (Ballarat, Australian Labor Party, Minister for Infrastructure, Transport, Regional Development and Local Government) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

Today has been a long time coming. After a quarter of a century of failed attempts, Australia will finally have a New Vehicle Efficiency Standard.

After extensive consultation, the government is introducing a New Vehicle Efficiency Standard that delivers Australians more choice of new cars, will save Australians thousands at the bowser, will reduce our emissions, and a model where Australians will continue to buy the utes and the SUVs that they love.

Australians have been left behind as consumers in most advanced economies across the world benefit from more fuel-efficient cars and greater access to new low- and zero-emissions technology. There are more than a million new cars being sold in Australia each year and unlike 85 per cent of cars sold worldwide, they are not required to meet a vehicle efficiency standard. Together with Russia, we have been one of the only advanced economies that do not regulate the efficiency of new vehicles.

This means that Australians are missing out on fuel savings and can't access the range of fuel-efficient vehicles consumers in other advanced economies enjoy.

There are more than 500 low- and zero-emission vehicle models available worldwide, but less than 100 are available in Australia. It is therefore not surprising that the average Australian vehicle uses 40 per cent more fuel than its European counterpart and 20 per cent more than in the United States.

More choice means that you will be able to keep buying the vehicles you know and love. It also means that there will be more choices of new vehicles into the future.

And, as importantly, we will be reducing transport emissions. With no action, transport emissions are expected to become Australia's largest source of direct emissions by 2030. Sixty per cent of transport emissions come from cars. This legislation will reduce the emissions from new cars by half by the end of the decade.

It is an Australian standard for Australian conditions.

The new vehicle efficiency standard draws on the best aspects of the standards that apply in other countries to build a framework specific to the Australian vehicle market.

The bill will establish a duty for light-vehicle suppliers to meet or beat a carbon emissions target, adjusted for the types of vehicle they sell and the weight of each vehicle.

Importantly, the government is smoothing the emissions trajectory for light commercial vehicles and moving a limited number of four-wheel drives such as the Toyota LandCruiser and Ford Everest, regarded as 'workhorse' four-wheel drives, into the light commercial vehicle category.

The goal is not only to increase the number and range of zero-emission vehicles manufacturers bring to Australia, but to incentivise them to bring us the most efficient versions of the vehicles they sell across their range, be that better petrol, better diesel, better hybrid or other cars. The new vehicle efficiency standard will not ban or prevent the importation of any particular vehicle.

A key feature of the new vehicle efficiency standard is the way it adapts to reflect the different types of vehicles supplied. It doesn't expect small cars and large SUVs to meet the same target, or a tradie's ute to beat the emissions of a daily commuter's car. We understand these vehicles have different uses and different characteristics. The goal of this legislation is to make next year's new vehicle more efficient than this year's—across the range—from the smallest hatch, to SUVs, to workhorses like utes.

The new vehicle efficiency standard framework rewards suppliers who consistently beat their targets with tradable credits and enables trades of those credits between suppliers. Penalties only apply to suppliers who, two years after the initial calculation of their performance towards the emissions target, have not brought their emissions below the specified target by changing the vehicles they supply or by purchasing credits from other suppliers. Penalties can be avoided if vehicle suppliers send us their best cars, make more vehicles more efficient or buy credits from other suppliers that have done that work.

This bill provides certainty for industry by including the targets for the next five years, while providing the flexibility for the responsible minister to set future targets that reflect the circumstances of that time. To maintain the integrity of the framework, a ratchet mechanism is included to ensure it becomes more effective as suppliers gradually adjust their stock.

For car dealers, we have heard that the industry would like the scheme to move to a point-of-sale system, rather than the point of import. We have listened to that. While implementing this would be particularly complex and is not possible by 1 January 2025, the government will look to move to compliance at the point of sale, including through the review of the scheme to be undertaken in 2026.

It is vital that all sectors of the Australian economy start taking steps towards net zero now to support vibrant, competitive markets over the longer term. The transport sector is no different. The new vehicle efficiency standard will bring Australia into line with other advanced economies, reduce transport emissions and reduce the amount Australian motorists spend at the bowser.

The passage of this bill will mean Australians can start to benefit from low fuel and maintenance costs, with estimated savings of $95 billion out to 2050, and will see around $5 billion in health benefits from cleaner air over the same period. Australians deserve the best cars that manufacturers can provide across their range. The new vehicle efficiency standard will give Australian consumers a seat at the table so we can access the most advanced emissions technologies, and vehicle manufacturers are already supplying to other advanced economies.

Can I particularly, in this debate, thank the officials from my department—in particular Tristan and Ben, who are in the chamber, and Marisa for their work on this important legislation so far. This is something you can be very proud of. Can I also thank staff in my office and in Minister Bowen's office: Joseph and Michael in mine, and Andrew and Cam in Minister Bowen's office. In particular to Joseph: when you came to me three years ago, this was exactly the sort of reform that you wanted to see governments bring in, and, again, this is something to which you can be very proud of. I'd also like to thank the industry and climate groups for engaging with the government in such a constructive way. Particularly, I would like to acknowledge Toyota, Hyundai, Tesla, the EV Council, the Smart Energy Council, the Motor Trades Association of Australia and the Australian Automotive Dealer Association for their really constructive engagement.

This bill will make a substantial difference to the way in which consumers are able to access the most efficient vehicles, save money at the browser and reduce emissions at the same time as ensuring that you can still buy the cars that you love to drive here in Australia. I commend the bill to the House.

Debate adjourned.