Good morning Friend,

What an incredible 24 hours!

Last night the Prime Minister's Office stepped in and overruled Simon Watts.

Within six hours of our email, Christopher Luxon's office went into damage control and has now totally ruled out Watts' "Ute Tax 2.0" and the proposed Fringe Benefit Tax raid on work vehicles.

After we blew the whistle yesterday, our phones ran hot from media interested in the story and asking for the Ministerial papers.

What became clear is that despite the Climate Change and Revenue Minister instructing IRD officials to develop the policy – and even had IRD consult with the tax industry on implementation – most of Simon Watts' Cabinet colleagues just had no idea!

We understand the issue took Luxon's office by total surprise. 🤦

Heather du Plessis-Allan picked up the baton (interviewing the Federated Farmers spokesman) and was first to get the U-turn out of National (listen to it unfold here).

Heather's producer was provided the following statement from Luxon's press team in response to the Taxpayers' Union and Federated Farmers exposing Watts' Ministerial direction and the IRD's proposals:

The National Party also rushed out an email last night to its rural members which locks-in the policy U-turn (click to open larger version).

When the documents literally show that IRD officials were instructed by the Minister of Revenue to progress an FBT Ute Tax, the Nats now claiming that those who expressed concern are "misinformed" is political spin at its worst.

It's almost from the Ardern-era. 😉

But who cares, ? As soon as the National Party realised what Simon Watts had been quietly orchestrating this tax grab for months, they saw the political risk and acted quickly to overrule Watts and kill the policy.

The Prime Minister's office could not be clearer, Simon Watts has been overruled and the Ute Tax is dead. 🪦

Thank you for your support – especially to the many thousands of people who used our email tool to contact National Party MPs yesterday. Chalk it up as another policy victory. 😇

This win proves again: when taxpayers raise their voices, politicians are forced to listen – even to rein in their own rogue ministers.

Have a great Matariki.

Jordan @ Taxpayers' Union.

From: Jordan Williams <[email protected]>
Date: Thursday, 19 June 2025 at 11:51 AM
To:   <[email protected]>
Subject: The Climate Change Minister is rebooting Labour's Ute Tax!! 🛻 🤑 😱

Hi Friend,

Two years ago, the National Party campaigned against Labour's Jacinda Ardern/Chris Hipkins' outrageous "Ute Tax".

Well, in the most astonishing turn of events, we can confirm that National's Climate Change and Revenue Minister, Simon Watts, has instructed officials to develop new tax rules that will smash ute owners even harder than Jacinda Ardern's original Ute Tax!

As reported by Radio NZ:

Under the change, farmers with a mixed used farm ute costing $70,000 will be hit with an annual [Fringe Benefit Tax] bill of $6370, at the proposed 26 percent rate for petrol and diesel vehicles.

"Farmers are buying vehicles at Fieldays, looking forward to a reduced cost thanks to depreciation deductibility, but oblivious to the tax grenade coming their way in 12 months," [Findex tax advisory partner Craig Macalister] said.

"Worse still, any vehicle over $80,000 - such as a $75,000 ute with $6000 in extras - will be classified as 100 percent taxable."

Friend, Labour's Ute Tax hit only when you bought a new ute. Simon Watts' Ute Tax 2.0 will see the tax payable each and every year!

Currently, if you use a ute mostly for work, you can keep a logbook and avoid FBT, provided private use is genuinely minimal. That’s only fair.

But Watts wants to remove the logbook system and slap a flat tax on nearly every ute in the country, regardless of how it’s actually used.

He's getting IRD officials to say it's about 'simplification'. Yeah right! It's nothing short of an on-farm tax grab.

Labour's Ute Tax maxed out at a one-off $5,175. Simon Watts version is much harsher.

Say you buy a Ford Ranger "Raptor" (currently listed online for $86,990). Under the current rules, assuming it's mostly a work vehicle and personal use is incidental, no FBT is payable. Under Simon Watt's proposed tax rules, $6,318 or even $8,213 will be payable in Fringe Benefit Tax in the first year alone! (The exact amount will depend on the driver's marginal/income tax rate). 

It's not principled – it's nothing short of a $100+ million tax grab from farmers and tradies.

For utes worth $80,000 or more, FBT will be deemed to apply at 100% even if there is no personal use or benefit. 

Watts going on? Has this National Party Climate Change Minister gone rogue?

Friend, this isn't some IRD brain fart or just officials getting ahead of themselves. According to documents uncovered by the Taxpayers' Union yesterday afternoon, Minister Watts has been proactively asking IRD to do work on hiking FBT on utes and work vehicles!

Do National Party MPs even know Watts going on?

Just last week, at National Fieldays, Christopher Luxon and Nicola Willis were literally bragging that they scrapped Labour's Ute Tax!

And here is one of the National Party's social media posts from just two years ago:

The National Party are either being super sneaky or simply doesn't know what their Climate Change/Revenue Minister has been up to.

As far as we can tell, nothing has gone to Cabinet – it's all being snuck through buried within business-as-usual annual IRD tax amendments.

We've rushed to create an email tool for you to contact your local National MP and demand they scrap Simon Watts' Ute Tax 2.0.

A $100 million tax grab targeting ute owners 🤑

According to IRD estimates, based on the assumption that the policy change would impact just 30% of the number of double cab utes (which our own tax policy expert say is likely to be a gross underestimate), the "fiscal impact" of the Simon Watts' proposed changes is a whopping $100 million.

That's $100 million in new ute taxes each and every year!

So much for "Going for Growth". The very people holding up New Zealand's economy right (farmers, tradies, etc) are the ones set to be targeted by this new tax.

Friend, demand Labour National rule out their Ute Tax

Friend, the Taxpayers' Union is about accountability and that includes holding the current government to their word. We didn't defeat Labour's Ute Tax just for National to give us their own!

👉 Email your local National MP to demand they scrap the Ute Tax 2.0

If you are not in a National Party electorate, email your closest National MP instead.

It's essential that every National Party MP knows that this tax grab won't go unnoticed. That's why we need you to take action now.

Please take 30 seconds to email your local National MP to demand they rule out this Ute Tax 2.0.

Thank you for your support.

Jordan Williams Executive Director New Zealand Taxpayers’ Union.