Finance Consumer Victorian government edges closer to electric vehicle tax

Victorian government edges closer to electric vehicle tax

Electric cars
The Victorian government is one step away from introducing an EV tax on July 1. Photo: Getty
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You may have heard the Victorian government wants to tax owners of electric cars 2.5 cents for every kilometre they drive on Australian roads.

After all, there has been a bit of pushback.

But evidently not enough to stop the lower house of Victoria’s Parliament passing the controversial bill on Thursday.

Despite strong opposition from leading car manufacturers and environmental groups, who warned the tax would effectively make electric vehicles even more expensive and discourage uptake, the reforms are now just one step away from coming into effect on July 1.

In a submission to a separate Senate inquiry, Professor Jake Whitehead of the University of Queensland said that if the road user charge was introduced, consumers would view this as “being equivalent to approximately a $4500 increase in the vehicle’s purchase price”.

“In other words, for a $45,000 EV, the proposed EV road tax is predicted to have an effect approximately equivalent to an additional 10 per cent tax, or doubling the current GST rate, in terms of consumer perception,” Professor Whitehead wrote in his submission.

He said if Victoria’s tax was implemented nationally, it could result in 35-68 per cent lower sales over the next 30 years unless significant incentives were introduced to offset the charges.

Since then, the Victorian government has gone some way towards addressing the tax’s disincentive to EV ownership.

Car manufacturers and environmental groups called the Victorian government’s policy the worst EV policy in the world.

Last weekend it announced a $3000 subsidy for non-luxury electric vehicles and said it wanted EVs to account for at least half of all new cars sold in Victoria by 2030.

The target won more praise than the subsidy, and so all eyes will now turn to how the Victorian government plans to get us there.

State ministers have said they will set up an expert advisory panel “to advise the government on policies, programs and infrastructure required to ensure we meet our 50 per cent target by 2030”.

But the exact make-up of this panel has yet to be decided.

The New Daily has been told the Victorian government will have more to say about it towards the end of the year.

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