Meat & Livestock News

New Zealand Government Axes ‘Ute Tax’ to Support Farmers

Two male farmers in gloves shaking hands

In a significant policy reversal, New Zealand’s new Minister of Transport, Simeon Brown, has delivered on a key campaign promise by repealing the contentious ‘Ute Tax’. This move, executed within the Government’s first 100 days, has been positively received by the agricultural sector.

Legislative Shift and Farmer Impact

The legislation passed in the last weeks of the previous year, abolishes the Ute Tax and Clean Car Discount for vehicles registered post-31 December 2023. This repeal was one of Federated Farmers’ 12 policy priorities to bolster farmer confidence.

Brown stated that removing the Ute Tax, a central election promise of the National party, was crucial as it unfairly penalised farmers and tradespeople who depend on utes for their livelihood, given the lack of suitable alternatives.

Economic Considerations and Policy Criticism

Brown critiqued the previous Labour Government’s policy as inequitable and financially imprudent. The scheme, intended to be financially neutral, led to a substantial shortfall. More than NZ$579 million was disbursed in rebates, with NZ$13.5 million spent on administration, while only NZ$290 million was collected in charges, resulting in a NZ$302.5 million deficit for taxpayers.

Response from Federated Farmers

Mark Hooper, Federated Farmers’ spokesperson for transport and roading, acknowledged the tax’s repeal and thanked the Minister for keeping his promise. He noted that the repeal was significant in principle despite the current economic challenges making new utes unaffordable for many farmers. Hooper emphasised the necessity of utes in farming operations and criticised the additional financial burden imposed on farmers, who already contribute to carbon emissions reduction through the Emissions Trading Scheme.

Future Focus on Rural Infrastructure

With the Ute Tax issue resolved, Federated Farmers is shifting focus to rural infrastructure needs. Hooper underscored the urgency for investment in rural roads and bridges, especially following damage from recent cyclones. The organisation anticipates the new Government’s funding initiatives to enhance these vital transport links.

Government’s Assurance

In response to queries about future infrastructure plans, Minister Brown conveyed a straightforward message: “Help is on the way.” This statement suggests the Government’s commitment to addressing rural infrastructure concerns.

In conclusion, the abolition of the Ute Tax represents a notable change in New Zealand’s agricultural policy, reflecting a greater alignment with the farming community’s needs and challenges.