Southern Australia halts the introduction of road tax targeting EV users

Electric vehicles Energy

In November 2020, the government of Southern Australia (SA) announced an introduction of a road tax to all-electric vehicle (EV) users through the region’s treasurer. It was a move to equitably distribute tax responsibilities among motorists since other gasoline users paid a similar tax.

In recent developments, the administration has delayed this by-law which was estimated to raise about $1 million annually. The taxation was to begin from July 2021 but has been extended for 12 months to give the government time to evaluate other states’ developments. “The extension will provide more opportunity to monitor developments in other states, such as Victoria, to ensure a degree of national consistency,” said Rob Lucas, Southern Australia’s Treasurer.

“The reality is, if you are driving an electric vehicle, then you are not paying fuel excise at the pumping, and you’re contributing significantly less to the vital upkeep of our vast road network,” added Lucas.

The state compares notes with other states to ensure a coordinated approach towards road taxes across the country. As of July 1 this year, Victoria’s authority is expected to introduce the road tax. According to Lucas, SA’s road tax will be based on odometer readings and not GPS tracking reliant.

“Ultimately, this reform will have to happen, as more and more Australian motorists shift to zero and low-emission vehicles,” noted Lucas. Electric vehicle industry stakeholders noted that this by-law was premature. Instead, the government should focus on improving the EV charging infrastructure.

“The priority today should be putting in measures to help more people choose to drive an electric vehicle, and adding in new charges, like road user charges, later on in the decade,” said Behyad Jafari, CEO of Electric Vehicle Council. Jafari highlights that the government should have sat down with all stakeholders to determine the best approach to the EV sector’s growth.

“What they found was; as a result, they made a whole bunch of mistakes in their assumptions of how it would work, how it would apply, and the really damaging impact it would have on something they supported –the transition to electric and zero-emission vehicles,” added Jafari.

“We have heard a lot of thought bubbles coming out of the government around whether we would put in GPS trackers, have people self-report. Clearly, these are things that haven’t been entirely thought through,” added Jafari.

In Victoria, the new road tax will differ depending on whether the car is fully electric or a hybrid. Zero-emission vehicles will attract a 2.5-cent per kilometer, while the plug-in hybrid vehicles will attract 2.0-cent per kilometer.

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