National EV tax coming in ‘next few years’

Federal treasurer Jim Chalmers has confirmed an electric vehicle tax, most likely in the form of road user charges, will become a priority in the “next few years” as the Albanese government continues its tax reform.

Speaking at the National Press Club of Australia, Chalmers said the government was focused in the short-term on its existing reform areas – “multinationals, PRRT [petroleum resource rent tax], high-balance superannuation, changes on cigarettes, compliance” – and that some of them were yet to be legislated.

“But I think in the next few years, an increasing focus … will be this public policy challenge, this revenue challenge, this challenge to the revenue base,” he said.

“A big part of this is states-related. There’s a court case underway right now which goes to the core of this – it is part of the discussions I have with my state and territory colleagues, and in the coming years people will come at this challenge.”

The big challenge in question is making up the $13.7 billion loss in revenue currently sourced from fuel excise as zero-emissions vehicles become increasingly prevalent.

Australia’s uptake of EVs has been slow in recent years but is now increasing dramatically.

At a state level, Victoria has already introduced its own EV road user charge, with the going rate having recently increased from 2.6 to 2.8 cents per kilometre for EVs and 2.1 to 2.3c/km for plug-in hybrids.

The court case referenced by the treasurer refers to a High Court challenge to the Victorian tax by a pair of disgruntled EV owners claiming the charge is unconstitutional and unfair on motorists trying to reduce their carbon footprint.

Chalmers didn’t go into any specifics as to what the federal EV tax might involve or when it might come into effect, but did allude to the fact such details would be finalised in the near-to-mid-future.

“Our focus for the time being is a couple of strategies that Catherine King (Minister for Infrastructure, Transport, Regional Development and Local Government) and Chris Bowen (Minister for Climate Change and Energy) are consulting on and working up when it comes to the broader environment and infrastructure for electric vehicles,” he said.

“No doubt at some point probably relatively soon, by which I mean in the next few years, a government, our government, or our successor will turn our mind to it.”

Of the 678,618 new vehicles delivered so far this year ending July 31, 49,938 of them have been battery-electric while PHEVs have contributed another 4366 sales.

EV sales are up 385.4 per cent compared to the same period last year as more models come to market at increasingly attainable prices, not to mention incentives still being offered by some states and territories.