Victoria locks in controversial EV tax

Electric vehicle owners in Victoria will pay 2.5 cents for every kilometre travelled with effect from July 1, following the formal implementation of a new EV tax by the Andrews government.

Despite the efforts of the Greens to have the legislation blocked, the bill passed through the upper house of state Parliament this week with the support of cross-bench MPs.

The tax is anticipated to raise $30 million over four years for state government coffers, and will cost the average EV owner between $260 and $300 a year.

That would equate to annual travel of between 10,400 and 12,000km, which is well short of the distances modern EVs can run over the course of a year.

The upside is that the Victorian government has recently introduced a $3000 subsidy for electric cars priced below $68,740, and that will offset the EV tax for 10 years, based on the state government’s projections.

In a press release issued yesterday, the Greens denounced the tax and the upper house MPs who supported the passage of the bill.

“Passing the ‘worst electric vehicle policy in the world’ will now make Victoria a global laughing stock, and we will continue to be a laggard in EV uptake,” Greens MP Sam Hibbins said. “This is climate vandalism in the midst of a climate crisis.”

The Greens are not prepared to let the matter drop, with Hibbins promising that the party will “move to repeal this backwards tax on clean air”.

In a Victorian government press release issued back in March, it was revealed that the tax raised would be less than the money ($45 million) the state government will invest in charging infrastructure to reduce range anxiety for EV owners.

“Introducing a road usage charge now, before take-up increases substantially, ensures that everybody pays a fair and sustainable charge for the use and the wear and tear on our road network and that means safer roads,” the Victorian treasurer Tim Pallas said at the time.

Taxing EVs has long been on the agenda of state governments, but Victoria always looked likely to pull the trigger first.

South Australia is reportedly postponing its plans until July of next year, and New South Wales is understood to be considering a tax plan for EVs in the state budget, to be released in June.

The taxation of electric vehicles has the support of various bodies, including Infrastructure Partnerships Australia, the Australian Automobile Association and the Australian Trucking Association, but not the Federal Chamber of Automotive Industries or the Electric Vehicle Council.