Hidden cost of Labor’s electric car push revealed

Labor’s plan to dramatically increase the number of electric cars in Australia could blow a $1 billion-a year hole in road funding within a decade — and five times that by 2039.

Labor’s plan to dramatically increase the number of electric cars in Australia could blow a $1 billion-a year hole in road funding within a decade — and five times that by 2039.

Bill Shorten on Monday revealed he would set a “national target” for half of all new cars sold in Australia to be electric by 2030 but offered no plan for tackling the major shortfall in fuel excise revenue that would create.

Motorists currently pay more than $20 of fuel excise per 50L tank of petrol or diesel, which raises nearly $12 billion for roads each year.

Electric cars contribute nothing.

Bill Shorten charges an electric car at the launch of Labor's Climate Change Action Plan in Canberra. Picture: Kym Smith

“Right now the people who are driving Teslas costing $150,000 to $200,000 aren’t paying for roads like the people who are driving a Mazda3,” said Infrastructure Partnerships Australia boss Adrian Dwyer.

“There is no sense of the unfairness that currently exists,” Mr Dwyer said, because most owners of conventional cars were unaware they were already paying a road user charge.

Bloomberg New Energy Finance last year estimated the rise of electric vehicles in Australia would cut $1 billion a year from fuel excise revenue by 2029 and $5 billion a year by 2039. It did not respond to requests for further comment on Wednesday.

But its projections could be conservative.

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Bill Shorten has revealed he would set a “national target” for half of all new cars sold in Australia to be electric by 2030. Picture: Kym Smith

News Corp Australia has seen a 2017 Department of Infrastructure presentation that forecasts the loss could be as much as $3 billion a year within a decade and $7 billion annually 10 years later in a “high disruption” scenario.

Australian Automobile Association chief Michael Bradley said a push for more electric vehicles required a “plan for a significant hit” to revenue.

Modelling by the independent Parliamentary Budget Office shows that even if only 7.5 per cent of new car sales were electric by 2029, up to $440 million a year could be raised by imposing on those vehicles a road user charge for each kilometre driven.

Labor’s transport spokesman Anthony Albanese declined to respond when asked what a Shorten government would do to plug the road funding hole created by increasing the number of electric cars.

The push for electric cars requires a plan for a significant hit to revenue, says the Australian Automobile Association.

His office referred News Corp Australia to his comments at Monday’s electric car policy launch in which he blamed the Government for there being no plan to address the impact on fuel excise revenue.

At the launch Mr Albanese said in 2016 the-then urban infrastructure minister, Liberal Paul Fletcher, promised a study of road-user charging by a committee of three people, including one nominated by the Government and one by the Opposition.

“Guess what: the reason why you haven’t seen that committee report is that it hasn’t even been formed,” Mr Albanese said. “We’ve had to put up two separate people because one person was waiting 18 months ringing me once a month to say ‘what’s happening to the committee that I was going to be appointed on?’.”

Mr Fletcher has not yet responded.

Originally published as Hidden cost of Labor’s electric car push revealed