Victoria third state to propose EV tax

Victoria has taken a Leaf out of South Australia’s EV road user charge (RUC) book, aiming also to introduce it from July 2021.

A similar proposition has come from New South Wales, and the latest announcement from Victoria treasurer Tim Pallas has prompted the Australian Automobile Association (AAA) to urge the federal government to roll out a consistent EV RUC nationally.

The AAA says the RUC should initially be at a discounted rate to avoid disincentivising EV uptake and that part of the revenue collected from it should be apportioned to help the “roll out of low fuel consumption technologies and infrastructure”.

Victoria’s announcement that it will join South Australia and possibly New South Wales and go its own way to introduce a new charging regime for zero and low emission vehicles is another step in the right direction, the AAA says, also warning that Australia needs a new national model for funding transport projects.

“The technological shifts we’re seeing in the car market are good for consumers and the environment, but they are also going to significantly undermine the federal budget and its reliance on fuel excise revenue to fund transport projects,” AAA managing director Michael Bradley says.

“The federal government must step in and ensure tax changes are nationally consistent, equitable, and progressed in a manner that does not disincentivise technological transition.”

October’s federal budget shows Australian motorists will pay $49.3 billion in fuel excise over the next four years, and the average Australian household will contribute $1188 in fuel excise alone this financial year.

A survey by the AAA this month shows 79.9% of Australians agree that EV owners should contribute towards the costs of the nation’s roads in some way, with a similar proportion agreeing that a new RUC should be at a rate that does not discourage EV uptake.

Victoria aims to raise about $30 million annually from the EV RUC.

It is likely to be levied on a 2.5c/km basis for full electric vehicles, and 2c/km for plug-in hybrid vehicles (PHEVs). That equates to about $500 for an EV doing 20,000km annually, or $400 annually for a PHEV, The Driven.io reports.

The Electric Vehicle Council (EVC) is critical of the moves to introduce an EV RUC, saying governments need to encourage EV uptake rather than discourage it.

The EVC also urges Australia to introduce a ban on new petrol car sales from 2030 like the United Kingdom, Perth-based EV advocate professor Ray Wills agreeing Australia needs to commit to such a move and adding that a RUC should apply to all vehicles and not just EVs.

Meanwhile, the AAA says household transport costs are rising as the economy reboots from COVID-19 restrictions, with a typical household spending $309 weekly on transport during the September quarter, according to its latest Transport Affordability Index.