Contentious charge for electric vehicles in Victoria to be introduced to parliament

Electric vehicle owners could be hit with a new tax but the opposition says it’s ‘bad economics and bad for the environment’.

Owners of electric and low-emission cars could soon be asked to pay a road usage fee, with new laws to be introduced to the Victorian parliament on Wednesday.

The legislation, flagged ahead of last year’s State Budget, has sparked fierce debate within the community and environmental advocates have warned it unfairly taxes drivers for reducing their emissions.

A fight in the upper house is also looming, with multiple crossbench MPs indicating they may not support the scheme already opposed by the Opposition.

But the Andrews Government will this week push ahead with its scheme and the distance-based charges for zero and low emission vehicles is set to become law by July 1 this year.

Other Australian states around the country have moved to introduce similar programs over the past 12 months and have argued they are necessary because the cars do not pay for roads funding through the fuel excise collected by the federal government.

Treasurer Tim Pallas on Wednesday defended the decision and said it was “all about fairness”.

“It’s about making sure everybody pays for the use of their roads,” he said.

“Currently motorists who have petrol or diesel engines are effectively paying something in the vicinity of $600 a year on average through fuel excise.”

“Ultimately we have to make sure our roads are safe and well maintained.”

Owners will be charged 2.5c per kilometre to use their electric vehicles.

Mr Pallas said the federal government collected more than $10 billion a year in excise that was then provided to states for roads funding and that electric vehicles were tipped to be on equal price levels to other cars by 2025.

He said the state government was backing the take-up of newer and cleaner cars and that rebates existed for registration and duties.

“Introducing a road usage charge now, before take-up increases substantially, ensures a fair and sustainable revenue base to fund investments in the road network, including the smooth integration of electric vehicles,” Mr Pallas said.

“We are providing confidence to new electric vehicle owners with a massive boost to our charging network, funded by the distance-based charge, which will reduce range anxiety as a key barrier to take-up.”

The fee will apply to cars registered in Victoria and be applied at a rate of 2.5c per kilometre for electric cars and other that do not have emissions.

Plug-in hybrid electric vehicles will be asked to pay at a rate of 2c per kilometre.

Electric vehicle owners would be forced to pay an extra $330 each year, on average.

Greens transport spokesman Sam Hibbins slammed the move and said no other government in the world was introducing similar laws.

“We’re calling on all non-government members to oppose this new tax on electric vehicles,” he said.

“This is a pointless tax on electric vehicles, it’s a tax on clean air.

“I’m very hopeful that the crossbench will knock this off … This is a real test for the upper house.”

Opposition Leader Michael O’Brien said the Coalition would not support the legislation.

“The state government is introduced yet another new tax on Victorians,” he said.

“This time they’re actually putting their pockets before the planet.

“This is bad economics, its bad for the environment and Victorian families cannot afford another $300 slug to their hip pocket.”

Its understood drivers could be slugged with the fee by reporting their odometer readings while paying their registration.

The state government is anticipating electric vehicle owners will pay an extra $330 each year because of the scheme, which is expected to rake in about $10 million annually.

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