Budget 2012: Green Tax, Rebates and Whatnot

The only car population news that was revealed in Friday’s Budget was the tax penalties and rebates based on carbon emissions. Yawn. This was hinted for some time to warm up the industry and the changes are that instead of penalties or rebates of up to $15k, it is up to $20k in the latest talks. Heh

Instead of restructuring the entire COE car-owner-pays system, the govt is rolling out this emission-based carbon tax. Very trendy now to introduce carbon footprint in taxes. WTF. OK before I focus on the merits and crappiness of the car carbon emission tax, let me bitch on what the government did not talk about but should have.

The current COE categories are outdated and should be revamped. There should be a separate COE category for taxis. There should be a separate COE category for green and even diesel cars. There should be a separate COE category for luxury or supercars. This is the way to cool the COE bidding wars, bring down COE prices, push out cab companies in bidding for the COE with private car owners, and regulate the type of cars on the roads, especially if the government is concerned about encouraging green cars e.g. allot a higer quota for green cars.

Also, ARF should not only be based on OMV but also higher weight on the size of the car as well i.e. a 3 litre sauerkraut monster should have a heftier ARF than a 1.6 litre sushi or kimchi sedan because of a specific size surchage on top of the OMV, which is the ball park figure based on car brand, import costs and currency exchange. These much debated ideas were not raised in the Budget at all. So expect COE to be in the $40k range upwards until the next GE as there is nothing new here for drivers.

Back to the emission-based taxes. Schizer, ze Jerman car lobby is revving! The German Chamber of Industry and Commerce started lobbying for a carbon-based tax system in Spore in 2010.  This of course reflected environmental and political preferences in Europe, and more importantly, also because the German car lobby in Spore calculated that they would have a comparative advantage over the Jap and Korean dealers. With the Euro V standards on diesel cars, size for size, diesel cars typically have lower carbon output that petrol ones, and also, VW, Audi, Mercedes and BMW all eager to import diesel variants here, it made sense that a carbon-based tax is adopted sooner than later in Spore from the German car lobby perspective.

Already the traditional Asian players in the car market are being displaced in their rankings. Under the current badly managed and overpriced COE regime, buyers are choosing continental cars as they have a higer OMV compared to Asian makes, that idea of bang for buck since COE premiums are so high. In 2011, BMW, Audi and Merc were the big boys and the humble true people’s car, the Altis was dethroned and dropped to number 4. Gone are the days when Jap cars were the best sellers and consumer prefences have changed since the COE prices went up as its supply dwindled.

With the status quo, the sushi and kimchi car dealers would be eaten alive soon enough by the Teutonic invaders under the new emissions tax environment. Only Toyota stands the best chance in raising its market share by taking advantage of the emissions tax environment with its Prius C. Heh the Japanese hybrid vs German diesel race for the green car market share is about to take place. The only issue is whether the govt is going to have a separate green car COE category. If so, what is the quota and that would really change the game to a large extent. And how any change in diesel duty is going to affect the preference for small diesel cars.

Ahem BTW don’t be fooled by all the crap that diesel cars are cleaner blablabla and that it is about time Euro V cars are recognised for being clean and green. Its German car lobby rhetoric, more or less. Yes they have lower carbon emissions, but they emit more soot and particulate matter aka pollutants, smog that really fracks up your respiratory systems.

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One Response to “Budget 2012: Green Tax, Rebates and Whatnot”

  1. VW Dealer Albuquerque Says:

    VW Dealer Albuquerque…

    […]Budget 2012: Green Tax, Rebates and Whatnot « The Void Deck[…]…

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