Albanese government backs legal challenge to Victoria EV tax

A legal challenge aimed at striking down the Victorian Labor electric vehicle road user tax in the High Court of Australia has gained the support of the Albanese Labor federal government in what could turn out to be a landmark case.

Electric car owners and residents of Victoria, Chris Vanderstock (who also releases videos about EVs on Youtube such as this one on installing a wall charger) and engineering consultant Kathleen Davies, launched the challenge in September 2021 after the Victorian government became the only state to charge EV owners the tax.

While NSW and South Australia have vowed to join Victoria in a bid to replace falling fuel excise, both are delaying the introduction until 2027 or the EV market share reaches a certain percentage.

The court will test two burning issues: The first is fight by EV owners to stop the road tax in its tracks, at least by the states. The second is the turf war between state and federal governments over who gets to impose a road user tax once the current fuel excise disappears with petrol and diesel cars.

Currently, some $12 billion a year is currently collected by the federal government through the fuel excise tax, and is placed in a general “bucket” before being divvied out to the states.

The introduction of the EV tax as fuel excise declines (largely due to combustion vehicles becoming more efficient) is therefore seen by the federal government as a tax grab by states as the transition to electric vehicles progresses.

Vanderstock and Davies’ challenge is based on the premise the EV tax is non-constitutional, because the charge is an excise which can only be implemented at a federal level. It has been supported financially by 629 crowdfunders.

When Victoria launched the tax, EV industry experts said it would only stall the nascent market. But the state went ahead nonetheless, introducing the tax on July 1.

The system, which relies on drivers sending in photos of odometers and in some cases estimates distances driven, has been dubbed the “worst EV policy in the world” and has seen drivers complaining about wildly inaccurate charges.

A letter sent to the supporters by Equity Generation, the lawyers representing Vanderstock and Davies, confirms that the federal government will support the defendants.

“In Constitutional cases, the Attorneys General from the Commonwealth and each state are permitted to appear before the Court,” the letter from lawyer Jack McLean and team states.

“The legal arguments in this case relate to the division of taxation powers between the states and the Commonwealth.

“Unsurprisingly, each state Attorney General has intervened in support of the State of Victoria. Last week, the Commonwealth Attorney General intervened to support Chris and Kath,” the letter says.

Attorney-General Mark Dreyfus filed the intervention to support the EV owners, because of “potential implications for longstanding constitutional principles in relation to revenue and economic policy,” a spokesman for Dreyfus told The Age on Friday.

The move by the Attorney General was welcomed on Monday by Solar Citizens, an organisation that support decarbonisation of transport and energy.

“Taxes on electric vehicles are premature and should only be introduced when EVs hold a significant market share,” said Solar Citizens clean transport campaigner Ajaya Haikerwal in a statement.

“The Andrews Government’s road user charge sends a message to Victorians consumers to steer clear of EVs, stymieing a rapid transition we need to deal with our rising transport emissions.”

The latest statements come as the ACT government has declared it will ban the sale of combustion vehicles from 2035, joining a slew of jurisdictions overseas.

“You only have to look as far as the ACT for what sensible policy on EVs looks like,” says Haikerwal.