Electric car owners could be slugged with new road toll

The Federal Government has called for a review of fuel tax in Australia as it re-thinks the cost of using the nation’s roads.

The current funding model in Australia is heavily predicated on users paying for fuel, a percentage of which (about 40 cents per litre) is put towards a fuel excise spent on maintaining and upgrading the national roads network.

However the advent of the electric car has triggered a re-think among government officials. The current fuel excise, which amounted to $11 billion in 2015-2016, makes up the bulk of funding the government’s annual $24 billion road expenditure.

Urban Infrastructure Minister Paul Fletcher told ABC News Breakfast that Australia needs to revamp its approach to funding roads.

“If you’re driving a 10- or 12-year-old Holden Commodore, through the fuel excise system you end up paying about 4.5 cents per kilometre to use our roads. Whereas if you are driving a brand new Tesla, you’re not paying through the fuel excise system at all,” Fletcher said.

“Is that fair? … Could there be a fairer system? Could there be a system that would give us better roads?”

While electric cars currently constitute 0.1 per cent of new vehicle sales in Australia, big changes loom. Many global manufacturers have made electric propulsion their primary focus as tightening global emissions standards begin to take effect.

The affordability of electric cars is also set to become more enticing as the technology become more widespread. Analysts believe electric cars and internal combustion cars will share similar price tags by 2025.

The shift in market demand has already raised a number of new proposals to fund ongoing road maintenance and upgrades in place of a traditional fuel excise, many of which were outlined in an Australian Productivity Commission report released late last year.

One front-runner is the idea to charge motorists a tax based on kilometres driven.

However, Fletcher is adamant that such changes would be years away.

“This would be a 10 to 15 year journey if there were to be any change,” he said.

“We’re not talking about any immediate changes here.”

Critics have questioned Fletcher's comments, arguing that introducing new charges would almost be a disincentive to go electric.

“A better model for our roads would be for the government to put in electric vehicle infrastructure and charge for its use,” Sustainable Platform founder Dr Mark Andrich told The New Daily.