News Australia’s first tax on electric vehicle drivers passes in Victoria

Australia’s first tax on electric vehicle drivers passes in Victoria

Electric Vehicles Australia EV incentives
While Victoria plans its tax on EV drivers, industry analysts have been calling for more incentives to get Australians to switch cars. Photo: Getty
Twitter Facebook Reddit Pinterest Email

Victoria will become the first state in Australia to tax electric vehicle drivers after controversial legislation passed both houses of parliament.

The Andrews government’s electric vehicle tax passed without amendment in the upper house on Tuesday night.

It will mean electric vehicle drivers pay 2.5 cents for every kilometre travelled from July 1.

The Victorian Greens vehemently opposed the bill but it passed 19-14 with the support of crossbenchers including Reason Party MP Fiona Patten and Animal Justice Party MP Andy Meddick.

Greens MP Sam Hibbins said the tax would make Victoria a “global laughing stock” and ensure the state continues to lag in the uptake of electric vehicles.

“This is climate vandalism in the midst of a climate crisis,” the party’s transport spokesman said.

“This was a big test for the upper house, and they failed. Rather than stand on the side of climate action and the Victorian people, they decided to roll over and stand for nothing.”

The tax is expected to raise $30 million over four years and is forecast to cost the average electric vehicle owner between $260 and $300 annually.

Treasurer Tim Pallas has previously described the tax as “modest”, about half the rate of what other vehicle owners pay through the fuel excise.

He said it will ensure electric vehicle drivers make a fair contribution to the cost of building and maintaining the state’s road network.

“Everybody who uses a road should pay their fair share to maintain them,” Mr Pallas told reporters in March.

South Australia was the first state to announce its intention to introduce a user charge on electric vehicles but has put the plans on hold until July 1, 2022.

NSW Treasurer Dominic Perrottet has also foreshadowed an “holistic” tax plan for electric vehicles in next month’s state budget.