Road tax floated for EV users ahead of economic summit

Electric car drivers could be hit with a road tax, with one federal frontbencher saying it’s a “sensible” move as more people switch to EVs.

Ahead of the federal government’s productivity roundtable next week, the idea of a road tax has been floated as an idea to ensure money is set aside for road upkeep.

The possibility was flagged by Treasurer Jim Chalmers during a speech in June, saying he was working with the states and territories “on the future of road-user charging” for EVs.

Transport industry leaders met on Monday, ahead of next week’s roundtable.

While the federal government has maintained the issue was for states and territories, frontbencher Tanya Plibersek said the idea of a tax for EV users made sense.

“I don’t think anything’s happening tomorrow, but I do think it’s sensible … for the states and territories, to look long term at what they do, to make sure that there’s enough money to build the roads that people want to drive on,” she told Seven’s Sunrise program.

“It’s no secret that as the number of petrol vehicles and diesel vehicles goes down, the tax from fuel excise decreases (and) that means less money for building and maintaining roads.

“The states and territories have been looking at this for some time.”

Money collected as part of the fuel excise is allocated for fixing roads, but concerns have been raised there will be less set aside in coming years as the number of EVs on the roads increases.

Victoria tried to put in place a two cent per kilometre charge on EV users in 2023, but the proposal was overruled by the High Court.

New Zealand has a scheme in place for road-user charges for EVs, with petrol cars soon to be added to the tax.

Coalition senator Jane Hume said more needed to be done to fix ailing roads, which a broader road tax could achieve.

“The fuel excise has been a shrinking tax base, and it’s one of the few taxes that’s hypothecated for road maintenance,” she told Sky News.

“The rise of EVs is something that has happened exponentially in the last few years.

“We want to make sure that those EV users are making sure that they’re responsible for road maintenance in the same way that petrol and diesel car users are.”

The Electric Vehicle Council said it supported fair road user charges, as long as they did not slam the brakes on the shift to clean transport.

“Any reform to fuel excise should drive Australians toward EVs, because they cost less to run, cut emissions, and reduce our reliance on foreign oil,” said EVC chief executive Julie Delvecchio.

“They also support our energy system and improve the air we all breathe. Reforms should only apply once electric vehicles reach 30 per cent of new vehicle sales. That way we encourage EV adoption and don’t tie Australians to expensive petrol and diesel cars that increase carbon emissions and harm our environment.”

Source: AAP