Categories: EV NewsPolicy

NSW rejects EV road user charge, targets net zero trains and electric ferries

New South Wales Transport Minister Andrew Constance says he will not follow Victoria in introducing a road user charge on electric vehicles for “many, many years”, saying at this stage it is necessary to incentivise, not penalise, EV uptake.

The minister also announced plans to retrofit smaller Sydney Harbour ferries with electric engines by 2025, and offset the Sydney train network so that it is carbon neutral by 2025, in an effort to decarbonise the state’s transport and help halt climate change.

The package of commitments puts Constance alongside NSW Energy Minister Matt Kean as one of the loudest Liberal voices on the need for an aggressive approach to climate change mitigation – a stark contrast to the pro-fossil fuel approach taken by their fellow Liberals at the federal level.

In an editorial in Guardian Australia, Constance cited the Black Summer bushfires of 2019-20 as motivation to “take action now” on climate change, and electrifying transport was an “immediate way” of doing that.

He said concerns that the switch to EVs would result in plummeting fuel excise revenue were misguided, saying Victoria’s decision to implement a road user charge at this moment – when EVs make up less 1 per cent of car sales in Australia – had made it the “laughing stock of the world”.

“[W]e need to encourage, not discourage, change for the better,” he wrote. “We need visionary thinking to deal with this issue. We need to incentivise the market. We need to see a variation in price points – the notion of electric vehicles as being only for the wealthy must be dispelled – and importantly, we need to do this here and now.”

Citing Norway’s world-beating EV uptake, which is based on aggressive incentives and tax breaks, he said: “We are worrying about tax when we should be worrying about how we can speed up the electrification process. It makes me nervous that we are stuck having a debate around revenue. We have got to think differently.”

Beyond ruling out a road user charge, Constance announced no concrete policies to incentivise EV uptake.

However, he said he was considering stamp duty relief, allowing EVs to use transit lanes, and car parks that are full of charge points “where people can park their cars for free and charge them all day, for free”. He also suggested the federal government re-examine the luxury tax threshold for cars.

In a separate interview with the Sydney Morning HeraldConstance said he was planning to power Sydney’s suburban train network through 100 per cent renewable contracts by 2025.

He gave few details of how this would be structured – whether, for example, offsets would be involved along with power purchase agreements – and his office had not responded to questions by deadline.

He said the plan for the electrification of ferries would focus on “lighter ferries” including the River Class fleet. However, he said eventually his “vision is for the entire transport fleet to be electric”.

Constance’s rejection of a road user charge will come as a huge relief to the EV industry and environmental groups, who were generally bemused and appalled by the Victorian Labor government’s position.

The decision to tax full EVs 2.5 cents per kilometre was widely seen as a strategy to seize control of EV taxation before the federal government – which collects fuel excise – wakes up to the inevitable rise of EVs. The fact the Andrews government eventually added a package of EV incentives to go with the tax only partly appeased critics.

Nature Conservation Council chief executive Chris Gambian called Constance’s announcements “very sensible measures that will help NSW become carbon neutral by 2050″.

“I applaud the minister for showing leadership in this critical area. Making the state’s transport sector run on 100% clean energy is the next big challenge after transitioning the electricity grid in NSW,” he said.

“We still have a long way to go to clean up the grid, but we can’t wait until that’s done to tackle the transport sector.”

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