Monday, 23 November 2020 07:18

Victoria to hit owners of EVs, hybrid cars with tax in 2021 Featured

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Victoria to hit owners of EVs, hybrid cars with tax in 2021 Image by Francis Ray from Pixabay

Victoria will impose a 2.5 cent per kilometre travelled levy on electric cars used by residents from July 2021, the state Treasurer Tim Pallas has said, adding that the levy for plug-in hybrid vehicles would be 2 cents per kilometre travelled.

He said on Saturday that, going by the Australian Census average of an annual 15,000 kilometre use of motor vehicles, an electric car owner would pay about $375 in tax every year. For hybrid vehicles, the tax would be about $300, he added.

Pallas said the measure was expected to raise about $30 million. "This is essentially the government making it a fairer system so that everybody pays their share of the wear and tear that they all bring in place," he added.

The government would spend about $45 million to encourage the use of electric vehicles, mainly through setting up of more charging stations, Pallas said.

The Federal Government gets 42 cents from each litre of petrol and diesel that is sold in Australia. Most of the money for maintaining roads comes from local council rates.

The Victorian Greens Party slammed the proposal for a tax in the state. Transport spokesman Sam Hibbins said: “The Victorian Greens will oppose the Victorian Labor Government’s electric vehicle tax.

“Governments around the world are making electric vehicles cheaper and encouraging uptake but the Victorian Government is heading in the opposite direction.

“The UK Government recently announced it would be banning the sale of petrol cars by 2030. Victoria should be making electric vehicles cheaper, not more expensive.

“This is a lazy tax that squibs the wider reform of replacing fuel exercise with road user charges. Placing a standalone tax on electric vehicles without wider reform will act as a disincentive for cleaner air and lower emissions.”

The think tank, Infrastructure Partnerships Australia, called Pallas' announcement "one of the most important reforms in a generation".

Chief executive Adrian Dwyer said in a statement, "For decades politicians and policy makers have talked about modernising the way we fund our roads, but today (Saturday) Treasurer Pallas acted.

“At its heart, this reform is about fairness. It’s not fair that right now a family in a Mazda or Kia is paying to use the roads while a millionaire in an electric Tesla, Porsche or Jaguar gets a free ride.

“Other countries and states around the world, including New Zealand, California, South Australia, Oregon and Utah have already moved to introduce comparable mechanisms and pilots to help future-proof the way they pay for road building and maintenance."

The US offers a rebate of US$7500 on every new electric vehicle purchased, up to 200,000 cars from each manufacturer. The Australian Labor Party had a 50% offset as part of its policy for the May 2019 election, but the Coalition offered nothing.

Many other countries, including the UK, have measures in place to support the take-up of EVs.

When South Australia announced that it would introduce a "road user charge" in its recent budget, The Australia Institute described the move as "a backwards and unnecessary step for the state that contradicts its supposed commitment to increasing the uptake of EVs into the future".

The AI's South Australia director, Noah Schultz-Byard, said at the time, "Penalising electric car owners because they don’t consume petrol that pollutes the atmosphere and our environment is absurd.

“This is, in essence, a great big new tax on not polluting. I can’t see how Adelaide will become the electric vehicle capital of Australia if the SA Government arbitrarily penalises the future industry that it supposedly wants to develop.

“As the budget papers show, this regressive move will undermine the government’s supposed goal of increasing the uptake of electric vehicles in SA.

The South Australian measure may not come into effect, because the state Labor party and the Greens do not support it.


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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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