The latest Federal Budget appears to offer little encouragement for Australia’s EV uptake and renewable energy, instead halving the fuel excise tax for six months.
The budget seems primed for the coming federal election, likely on May 14, with the petrol and diesel excise tax cuts expected to save motorists about $15 per tank of petrol or a saving of about $300 for the average household, in spite of Russia’s war in the Ukraine driving up fuel prices globally (to more than $2 a litre of petrol in Australia).
Experts generally consider the new budget “disappointing”.
The largest new spending commitment is $3.1 billion for the Melbourne Intermodal Terminal in Victoria, which will go towards two new freight terminals and road infrastructure designed to service inland rail in addition to $2b announced in last year’s budget for the project.
Professor Jago Dodson, RMIT University Centre for Urban Research director, suggests the fuel excise should have been kept at current levels and increased over the longer term to increase the relative cost of operating an internal combustion engine (ICE) vehicle compared to an electric vehicle (EV). “This would assist to accelerate a transition to EVs,” he says.
“However, this would need to be accompanied by income measures, such as direct payments or tax relief to ensure those on low incomes who are highly car dependent are not disadvantaged overall.” Dodson also suggests more support for e-bikes and cycling infrastructure, given that many car trips are under five kilometres “and thus well suited to electric-supported cycling travel”.
“There are many congestion and fuel savings gains to be made from switching to this cycling (and walking) for local trips,” he explains.
“The fuel excise reduction is a further disappointing measure. It is better to provide general income relief or tax credit than to diminish a mechanism that assists to moderate travel behaviour away from cars. And the revenue foregone is money that can’t be spent to maintain roads or expand public transport, walking and cycling in our cities.”
Dodson says the most significant budget announcements in relation to transport and infrastructure in Victoria centre around two multi-modal freight terminals in Beveridge in Melbourne’s north and in Truganina in the west.
“That signals confidence in the inland rail project and will go some way to reducing the number of trucks on Melbourne’s roads, reducing congestion and contributing to carbon savings.”
Dodson sees some funding for some notable but not hugely significant road upgrades, including Mickleham Road in Melbourne’s north.
“But overall, the budget has been another missed opportunity to support Victorians and Melburnians who are interested in cycling and walking as a means of travel,” he says, adding better public transport options would help remove cars from suburban roads and ease congestion.
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