Victorian government to refund unconstitutional EV tax – with interest
State treasurer ‘advised’ to hand back controversial ZLEV road-user charges following last month’s High Court rulingThe Victorian government will refund roughly $7 million to taxpayers after its controversial zero and low-emission vehicle (ZLEV) road-user charge was deemed unconstitutional in a landmark ruling by the High Court six weeks ago.
State treasurer Tim Pallas this morning said all profits from the ZLEV excise will be returned – plus interest – after reportedly being ‘advised’ to refund the money paid by battery-electric and plug-in hybrid vehicle owners since 2021.
“The advice is we should be repaying those bonds,” he said, as reported by The Age.
“We’re now going through a process of identifying who it is that we need to rebate, and we’ll go through the process of making those rebates.
“I think we’ve even decided to be sufficiently generous, albeit there isn’t an obligation to pay interest, we’ll pay interest on the retention of those funds.
“It’s a relatively small amount.”
The process is expected to take several months to complete and could lead to a major revision of the state’s electric vehicle policies. The announcement and implementation of the tax was just one of a series of controversial EV-related decisions made by policy-makers, the most recent of which was the premature axing of its EV purchase incentives in June.
The ZLEV road-user charge came into effect in July 2021 and mandated the payment of 2.8 cents per kilometre travelled for EV owners and 2.3c/km for PHEV owners, including mileage outside the state.
A pair of disgruntled EV owners challenged the policy almost immediately and took their stand directly to the High Court in September that same year, claiming the tax to be unconstitutional.
This drew support from industry players like the Electric Vehicle Council of Australia, while backlash continued to grow as the Victorian government started deregistering vehicles of owners who failed to pay or incorrectly logged their mileage.
The High Court ultimately deemed the charge unconstitutional and while Pallas is complying with the ruling and following legal advice to refund the profits, he warned of “substantial problems” to come from what he describes as a “reimagining of the constitution”.
“What is not a relatively small amount is a reimagining of the constitution by the High Court,” he said.
“That is going to cause very substantial problems for every state. We have put this on the agenda to discuss at the upcoming treasurers’ meeting on Friday.”
Both New South Wales and Western Australia were due to implement a similar distance-based road-user charge as of July 1, 2027 – to offset the reduction in fuel excise revenue as more people switch to EVs and PHEVs – but it now seems those plans are up in the air.
South Australia, meantime, ditched its plans for a similar EV tax at the start of this year.
Related: Victorian EV tax judged invalid
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Related: South Australia axes its EV tax
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