Proposed 'ute tax' disaster in the making, says Wannon MP

It's a huge concern for Callaghan Motors dealer principal Steve Callaghan, who said it would affect people's ability to be able to upgrade their vehicles.

"Unless the manufacturers can adapt, which some won't be able to, it's going to have a huge impact," Mr Callaghan said.

"From what I understand it could be an additional $11,000 to $13,000.

"It's going to totally change the market."

Mr Callaghan said he hoped there would be changes to the proposed New Vehicle Efficiency Standard (NVES), which is expected to come into effect on January 1, 2025.

Member for Wannon Dan Tehan said he had been contacted by a number of car dealership owners who had concerns about the proposed tax.

"This is an irresponsible decision made at the wrong time and it will have a negative impact on rural and regional communities," Mr Tehan said.

"What we are going to see is a rise in the price of utes and SUVs during a cost of living crisis."

Mr Tehan said he had been told the cost could increase by between $10,000 and $14,000.

"It will lead to people holding onto their older vehicles and doing nothing to reduce emissions," he said.

"Regional and rural Australia does not have the charging infrastructure in place and our farmers - in particular - don't have the ability to pay the costs of putting that infrastructure in place.

"All in all, this is a disaster in the making."

Mr Tehan said he hoped the federal government would rethink the proposed tax.

"This will not only impact farmers, but local tradies and will drive costs up locally," he said.

However, Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King hit back at the claims.

"New vehicle efficiency standards operate in 85 per cent of the global car market without any price impact on models offered there, and nor will Australia be any different," Ms King said.

"And it's obvious that in other countries with a New Vehicle Efficiency Standard, 4WDs and utes as well as petrol and diesel cars are still widely available.

She said the opposition was being deliberately deceitful about a standard they themselves tried to introduce.

"The numbers the LNP are using have already been debunked, yet they keep using them anyway," Ms King said.

"It's up to Dan Tehan to explain why he thinks regional Victorians should have less choice and pay more in petrol than people overseas."