Taxpayers’ Union Slams National’s “Ute Tax 2.0” As Even Worse than Labour’s Original

The New Zealand Taxpayers’ Union is calling on the National Party's leadership to rule out Simon Watts' proposed changes to the Fringe Benefit Tax (FBT) regime that amount to a new, harsher version of Labour’s infamous “Ute Tax”.

Taxpayers’ Union Executive Director Jordan Williams says, “National campaigned against Labour’s Ute Tax. More than 38,000 ute owners signed our petition to scrap it. Now, astonishingly, the National Party’s own Climate Change Minister has been caught out instructing IRD officials to bring in a ute tax of his own — and it’s even worse than Labour's.”

According to Inland Revenue Ministerial briefing documents obtained by the Taxpayers' Union, Minister Simon Watts has instructed officials to develop new FBT rules that would result in ute-owning farmers and tradies being taxed annually — not just once, as under Labour’s version.

“Labour’s Ute Tax maxed out at a one-off $5,175 when buying a new ute. Simon Watts’ proposal would see some work vehicle owners stung with more than $8,000 in tax every single year,” says Williams.

“Under current rules, if a ute is used almost entirely for work, a logbook can be kept to ensure FBT doesn’t apply. But Minister Watts wants to abolish that option and instead slap a flat tax on every work vehicle worth $80,000 or more — even if it barely leaves the farm.”

Williams continued, “Let’s be clear: this is not about fairness or simplification. This is a calculated, $100 million-a-year tax grab that targets the very people who keep our economy running — farmers, tradies, and rural New Zealanders. It’s Labour’s Ute Tax, but this time it’s blue.”

“National MPs were just at Fieldays bragging about scrapping Labour’s Ute Tax. Either they’re being sneaky or they have no idea what their own Minister is doing behind the scenes. If this change proceeds, we will not be pulling punches in calling out the betrayal.”

“The National Party must rule out this outrageous tax on work vehicles. New Zealanders didn’t vote for this. It's essential the National Party leadership overrules the Climate Change Minister.”