Toyota Australia chief executive Matthew Callachor backs Albanese Government as it softens ‘ute tax’

Headshot of Dan Jervis-Bardy
Dan Jervis-BardyThe West Australian
Prime Minister Anthony Albanese.
Camera IconPrime Minister Anthony Albanese. Credit: Car Expert

The nation’s top-selling car brand is backing Prime Minister Anthony Albanese’s contentious clean car plan after his Labor Government softened targets for utes and delayed the start of a new penalties system.

Toyota Australia chief executive Matthew Callachor said the carmarker still faced “significant challenges” to decarbonise its fleet as he sidestepped questions on whether the new fuel standards would jack up the price of vehicles.

Labor will on Wednesday introduce legislation to establish vehicle efficiency standards after agreeing to water-down its original proposal in response to industry blowback and the US Government’s move to slow its own clean car transition.

The concessions include a smoother shift to new pollution targets for light commercial vehicles including vans, utes and 4x4s.

A limited number of 4WDs — including the Toyota Landcruiser and Nissan Patrol — will be recategorised from passenger cars to light commercial vehicles, which carry less stringent targets.

The standards are still scheduled to start on January 1, 2025, but a new penalty for manufacturers which breach pollution caps has been delayed until July 1, 2025.

The policy will impose an emission cap on a carmaker’s overall fleet of new cars, forcing them to ship more EVs and fewer gas guzzlers into the Australian market.

It aims to slash pollution for new cars by about 60 per cent by 2029.

The Government has been under sustained pressure from the car industry to soften the standards or delay the start date amid warnings that the price of much-loved family vehicles would skyrocket thousands of dollars if Labor pushed ahead with its aggressive targets.

Toyota was among the companies that urged the Government to pump the brakes on the standards — dubbed a “ute tax” by the Opposition.

Appearing at a press conference in Canberra alongside Climate Change and Energy Minister Chris Bowen and Transport Minister Catherine King, Mr Callachor said the amendments were a “positive step forward”.

“But we aren’t under any illusions that there still remains a very big challenge in achieving these ambitious numbers, particularly as we look well into the future,” he said.

“But the reality is, we just simply need to get on with it now and move forward.”

Mr Callachor would not be drawn on whether the standards would drive up prices as the industry had feared.

“Australia is an extremely competitive marketplace in which we exist,” he said.

“You cannot afford to be mispriced, otherwise you’re basically not going very well at all.

“So from our perspective, we want vehicles to be basically practical, capable, and affordable.”

The Coalition remains opposed to the policy despite the concessions, demanding the Government and the carmakers supporting its plan provide assurances that prices won’t rise or models be withdrawn as a result of the standards.

“This was a tax on the family car, this is a tax on the family car, and it will be a tax on the family car,” shadow transport minister Bridget McKenzie and shadow climate change and energy minister Ted O’Brien said.

Australia and Russia are the only OECD countries without fuel standards, a policy seen as critical to boosting the uptake of EVs.

“This legislation will mean Australian motorists are no longer at the back of the queue, no longer treated as second-class citizens but given the same rights as those motors and consumers in 85 per cent of the world’s car markets,” Mr Bowen said.

The Federal Chamber of Automotive Industries — the leading industry critic of Labor’s approach — welcomed the concessions as a “step in the right direction”.

“However, we continue to have concerns about the impending challenges facing industry and motorists,” it said in a statement.

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