Victoria's proposed electric car road usage tax gets mixed reactions - ABC News  11/22/2020 03:13:14 

The Victorian Government's plans to tax electric vehicle owners a road usage fee could discourage people from taking up the new technology, an industry group says.

  • The Victorian Treasurer says the charge will help create a fairer system for taxing road users
  • It is expected to raise about $30 million per year and will be introduced in July 2021
  • But the Greens and an industry group say it will harm electric vehicle uptake and put Australia behind other developed countries

The new tax was announced by Victorian Treasurer Tim Pallas yesterday, in the lead-up to the release of the State Budget.

A 2.5 cent/km charge would apply to electric and other zero-emission vehicles, including hydrogen vehicles, and a 2.0 cent/km charge would apply to plug-in hybrid-electric vehicles.

"We need to recognise we have to put in place appropriate arrangements as we move to more electric vehicles and low-emissions vehicles on the network," he said.

The Victorian Government hopes to introduce the new tax in mid-2021.

Electric Vehicle Council (EVC) chief executive Behyad Jafari, who represents the industry in Australia, said the tax would have a "detrimental impact on the uptake and availability of electric vehicles in Australia".

"Our market's already behind a list of other developed nations, with less than 1 per cent of vehicles sold in Australia being electric  and [the tax] is only going to do more harm to that."

However Adrian Dwyer, the chief executive of Infrastructure Partnerships Australia (IPA), a think tank that has called for road user charges for electric vehicles, said the tax would help ensure roads were paid for as more people transitioned away from petrol- and diesel-powered vehicles.

Currently, roughly 42c per litre on petrol and diesel fuel goes to the Federal Government.

"Right now we raise about $11 billion per year through fuel excise, and that's in terminal decline with the greater fuel efficiency of vehicles," he said.

"As those dollars go, the money's going to need to come from somewhere to pay for roads."

Mr Dwyer also rejected the idea the new tax would push people away from electric cars.

"I think it's pretty clear that if someone's buying a $180,000 Tesla, they're not going to be disincentivised by a couple of hundred bucks a year on road user charges," he said.

"That would just be demonstrably untrue."

South Australia only other state to tax electric car users

The tax would make Victoria the second state to announce a tax on electric car users. South Australia announced a similar measure this month.

Mr Pallas said the Government expected the charge would raise about $30 million per year.

"This is essentially the Government making it a fairer system so that everybody pays their share of the wear and tear that they all bring in place," he said.

But Mr Pallas said the revenue would be "more than offset" by $45 million in the next Budget for measures to encourage electric car use, such as the creation of more charging stations.

Mr Dwyer said transitioning to a "pay for what you use" approach was important to ensure governments continued generating revenue from road users.

Traffic slows on a freeway
The Greens say a reform of road tax is needed.(Reuters: David Gray, File photo)

But the Victorian Greens opposed imposing a road usage tax specifically on electric car users.

"This is a lazy tax that squibs the wider reform of replacing fuel excise with road user charges," transport spokesperson Sam Hibbins said in a statement.

"Placing a standalone tax on electric vehicles without wider reform will act as a disincentive for cleaner air and lower emissions."

Mr Jafari also acknowledged the need for road tax reform but said encouraging electric vehicle uptake should come before looking at new taxes.

"No-one's against the idea of talking about road funding reform  it's really just about timing," he said.

"And at this very early time for electric vehicles, while the rest of the world is providing support to encourage uptake, this is the wrong time for Victoria to be taxing them and discouraging people from buying them."

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