Perrottet flags “holistic” approach to electric vehicle road tax in NSW

The NSW state government says it will take a more “nuanced” approach to the introduction of an electric vehicle tax, following the blowback to Victoria’s blunt introduction of a road user fee.

The controversial topic of state governments taxing electric vehicles based on distance has been bandied about for months now, and criticised for its backwards approach and its misrepresentations about the use of fuel excise to fund new roads and upgrades. It actually goes into general revenue.

Juice Media took a well-aimed hit at the proposed tax in a very satisfying satirical ad posted on Saturday.

NSW treasurer Dominic Perrottet indicated in late 2020 that he would consider following the proposal now under discussion in Victoria, which will see EV drivers pay 2.5c for every kilometre driven from July 1.

Modelling has shown this would effectively whack another $16,000 on the total cost of an electric vehicle, in contrast to the various tax exemptions and incentives provided in most other advanced economies, the lack of which threatens to stop the industry dead in its tracks in Australia.

Nissan Australia CEO Stephen Lester said at a press event announcing the new long-range Nissan Leaf last Friday that introducing such a tax is “problematic”. Volkswagen Australia boss Michael Bartsch has gone as far as calling such a stance as “positively hostile” to EVs and that Australia is an “automotive third world” and a dumping ground of old and dirty cars.

In response, Perrottet now insists he will adopt a “holistic approach” – whatevery that means – at the upcoming state budget so that the fledgling industry is not impeded.

‘‘Over time, people who use the roads should pay for the roads, just like they do with fuel excise, but what we don’t want to do is impede innovation and take-up of electric vehicles,’’ Perrottet was quoted as saying by the Sydney Morning Herald on Thursday. ‘‘We’re working on a holistic package to announce in the budget.’’

Details were not revealed. A NSW EV strategy is expected in 2020, but Perrottet said, ‘‘I was looking to have something finalised in the half-yearly review but my thinking hadn’t settled.’’

The more nuanced approach has been praised by Electric Vehicle Council (EVC) chief executive Behyad Jafari.

“Seizing the abundant benefits of the electric vehicle transition whilst simultaneously identifying new revenue streams for the state is a tough balancing act. So we respect the NSW Treasurer’s consultative and thoughtful approach to meeting this challenge,” Jafari said in a statement on Thursday.

Jafari says the EVC, which represents more than 71 EV industry stakeholders, may not agree with all the points that Perrottet will lay out at the state’s budget, but appreciates that the treasurer is taking note of the complexity of the issue.

“The NSW Government has shown a genuine understanding of what electric vehicles can deliver for the state: cleaner air, new jobs, and a pathway to net-zero emissions,” he said.

“The NSW Government appears committed to develop policy that supports and accelerates the state’s transition to electric vehicles. To date, that commitment has been met with enthusiasm, including the first Australian made electric bus being manufactured in NSW. ”

Jafari says that done properly, road user charges are the way forward.

“But they should not be introduced in a way that encourages people to stay in oil-thirsty vehicles. That’s unfortunately what Victoria’s blunt EV tax will do, and it is a trap Mr Perrottet has thankfully avoided for his state.

“We look forward to continuing our discussions with Mr Perrottet and his colleagues and we are optimistic New South Wales can take its place in the exciting electric vehicle revolution happening across the globe,.”