This was published 6 months ago
Beginning of the end for EV drivers’ free ride on road charges
The nation’s treasurers have united to plan a joint road map to charge the growing number of electric vehicle drivers for driving on the country’s highways and streets.
State, territory and federal treasurers met on Friday to lay down principles for plans to charge electric vehicle owners because they do not pay the estimated $16 billion in annual fuel excise that other motorists do to fund road construction and maintenance.
In a statement released by federal Treasurer Jim Chalmers’ office on behalf of all the treasurers at the video conference meeting, the group said policies would have to evolve to manage the rapid development of EV technology.
They did not specify how a road user charge would work or when it would be implemented, but they did provide broad principles. “Reforms should be designed to not deter the continued take-up of electric vehicles,” the treasurers said.
“The design of reforms should be as simple as possible and minimise administration and compliance burden.
“We will ensure any changes are phased to enable the productivity, climate and consumer benefits of increasing electric vehicle uptake over the coming years.”
Fuel excise adds 51.6¢ to every litre of petrol purchased, adding up to $15.71 billion in 2023-24, according to the Australian Automobile Association. Drivers of heavy vehicles, such as trucks and buses, also pay a road-user charge on the diesel they purchase.
Victoria legislated a road-user charge on electric vehicles in 2021, but it was voided by the High Court in 2023 because such forms of tax are a federal responsibility. NSW has also enacted a road-user charge, but it is not operational yet.
Last month’s federal economic summit showed broad support for a charge on electric vehicle drivers, and Prime Minister Anthony Albanese has said he saw such a move as inevitable. Data from the automobile association shows that about 7 per cent of vehicles being sold are battery electric vehicles.
Greater electric vehicle sales are good for Australia’s attempts to reduce its greenhouse gas emissions, and government policies have been geared towards encouraging motorists to purchase them for that reason.
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Nick Bonyhady is the business editor of The Sydney Morning Herald and The Age. He is a former deputy federal editor, technology editor and industrial relations reporter.Connect via X or email.