Cleaner Car Rebate Set For Delays And Budget Cuts

Following calls last month from the Federal Chamber of Automotive Industries for a rethink on the scheme's criteria, the Federal Government looks set to overhaul its upcoming Cleaner Car Rebate before its launch in January.

Under the current plan, motorists would be eligible for a $2000 rebate when trading in their pre-1995 car towards the purchase of any vehicle that holds a Greenhouse Rating of six or higher on the Government's Green Vehicle Guide.

Prime Minister Julia Gillard announced the program as part of her government's election climate change policy, with a total cost of around $394 million.

New reports this week however suggest that the scheme is now likely to be scaled down and delayed, depending on the outcome of the government's Mid-Year Economic and Fiscal Outlook statement.

A spokesperson for Senator Kim Carr, Minister for Innovation, Industry, Science and Research has confirmed discussions are underway with the Australian automotive industry on how best to implement the program - although reports from the AAP this week suggest Senator Carr is more interested in a tax break than a rebate.

The Federal Government has previously shied away from any form of rebate or subsidy, preferring to inject money into the local development and production of greener cars through its Green Car Innovation Fund.

Suggesting a lack of direction among the scheme's planners, Peter Garrett, representing the industry minister in the House of Representatives, appeared to duck a question from Opposition industry spokesperson Sophie Mirabella on the rebate's future. Mr Garrett also referred to the scheme as "cash for clunkers" rather than the Cleaner Car Rebate, it's official title.