Victoria’s EV road-user tax ‘unfairly’ administered

Victorian Ombudsman Deborah Glass has detailed a “range of failures” in the state government’s implementation of a road-user tax for drivers of EVs and plug-in hybrid electric vehicles (PHEVs), finding charges have been “unfairly” administered since the controversial scheme was established in 2021.

On the day that Victorian premier Daniel Andrews stepped down, making way for his deputy Jacinta Allan to replace him, Ms Glass’ investigation into the state transport department’s implementation of the EV tax was tabled in parliament, delivering a scathing report on the process.

The probe did not consider whether it was good public policy to impose a charge on EV owners for each kilometre they travel, ensuring they pay their “fair share” in the absence of a contribution other drivers make through the fuel excise.

But it did study the impact of the road-user charge on EV and PHEV owners, focusing on the department’s actions.

“Thousands of people have been affected by the charge since it came into effect in 2021, many of them unfairly,” Ms Glass said in the report.

“While this report focuses on the actions of the Department of Transport and Planning, there are broader lessons for the public sector about the dangers of making policy on the run – or not making it at all – and the importance of exercising discretion.

“Imagine buying an electric vehicle, and then being charged for more kilometres than you have driven, because ‘this average calculation is bound by legislation’.

‘Or travelling thousands of kilometres on fuel in your plug-in hybrid vehicle in remote parts of Australia with no charging stations and being charged hundreds of dollars for road use, despite having already paid the Commonwealth fuel excise on all those kilometres.

“Imagine finding your car has been deregistered, even though you paid your rego, because you failed to provide an odometer reading while you were overseas. And, adding insult to injury, imagine then receiving a ‘penalty’ charge for making a late declaration of the reading.

“Furthermore, that ‘penalty’ is calculated based on the ‘average distance’ travelled, which may be far more than you actually used your vehicle.

“As the Robodebt inquiry showed us, there are dangers in making assumptions and using average calculations to charge people. Assumptions have been made about how people will use their electric vehicles, which plainly disadvantage people with older vehicles or those who have less access to charging stations.

“And imagine, lastly, that when you complained, you received an unhelpful template response. You were told the department had no choice, no waivers were possible, its hands were tied by the legislation – although this very same legislation provided the department with a very broad discretion to waive charges. A discretion it repeatedly chose not to use,” she said.

More than 180 complaints have been made to the Victorian transport department over the EV road-user tax, with 67 per cent of these about unsatisfactory process or policy.

These come from more than 240 EV and PHEV registrations that have been cancelled as a result.

The complaints concerned two main issues – whether the charges were unreasonably applied, considering how owners used their vehicles, and whether additional charges imposed after submitting a late odometer declaration were wrong.

Ms Glass said the department told her office that it had not developed a policy for exercising discretion as the legislation was new – “even though by the time we asked, it was already two years old, and the government was happy enough to collect money under it”.

“This approach is unreasonable and wrong,” she said.

“We found an unreasonable lack of policy guidance to those administering the legislation, inflexible handling of complaints and an unwillingness to exercise discretion.

“It is also wrong to charge penalties not provided for in legislation, and the money collected under this ‘penalty’ should be repaid.

“While the department has resolved some complaints and refunded some monies during this investigation, it has not yet acknowledged that other decisions were unfair, and that it could exercise its discretion in these cases.”

She added that the department appears to be using a High Court challenge to the legislation, which remains unresolved, “as a smokescreen for inaction”.

“Whether or not its validity is successfully challenged, this legislation is being administered unfairly. This needs to change,” she said.

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