EV owners take Victorian government to court

Two disgruntled electric car owners have lodged a High Court challenge to the Victorian government’s controversial new EV road user tax.

In a move that has won support from EV proponents including the Electric Vehicle Council, documents filed in Australia’s highest court this week claim Victorian treasurer Tim Pallas’ new road user levy for EV drivers is unconstitutional.

The controversial ‘Zero and Low Emission Vehicle Distance-based Charge Act 2021 (Vic)’ was passed into law in May and came into effect on July 1.

It imposes a levy on electric car drivers of 2.5 cents per kilometre travelled, or 2c/km for plug-in hybrid electric vehicle (PHEV) owners.

The road user tax is set to be mirrored by other states once they have met certain EV sales thresholds.

In essence, the road user charge was introduced to offset income lost by the petrol excise tax, which will become less relevant as more motorists take up electrified vehicles.

The motoring industry and environmental groups have lambasted Victoria’s decision to implement the tax immediately, arguing it is undermining the uptake of low-emissions vehicles and, subsequently, climate targets.

Two plaintiffs are listed on the High Court filing: EV owner Chris Vanderstock and PHEV owner Kathleen Davies.

They are being represented by Equity Generation Lawyers, a firm which specialises in Australian climate change law.

Lawyers for the plaintiffs will ask the High Court to determine whether Victoria can levy the taxes under Section 90 of the Australian Constitution, “which our clients argue reserves the exclusive power to levy such charges for the Commonwealth”.

The Electric Vehicle Council has thrown its support behind the case, arguing the Victorian tax is misguided and unfair at a time when EV purchases should be incentivised.

“I’m not surprised to hear there are grounds for a legal challenge, this plan was developed in secret without consultation with experts and has been rejected as premature and destructive by every other government in Australia,” said EVC chief executive Behyad Jafari.

“It is fundamentally unfair for the state government to punish Victorians who made the socially and environmentally responsible choice to select an electric vehicle over a combustion engine alternative.

“People who buy EVs instead of ICE vehicles a making the civic-minded choice. They are helping clean the air of the pollution, reduce the state's carbon emissions, and lessen the state's dependence on foreign oil. For the government of that state to then single them out for special punishment is bizarre and unfair.

“There is nothing wrong with road user charges, but to aim them solely at the most environmentally responsible form of motor vehicle is totally misguided.”

Earlier this month, Mitsubishi Australia released a white paper urging Australian governments to reconsider road user charges for plug-in hybrid vehicles, which would be slugged twice under the new measures.

Other car-makers including Volkswagen Australia have also questioned the reasoning behind Victoria’s decision to impose the road user tax immediately.