Victorian Electric Vehicle drivers still being told to pay ‘unconstitutional’ tax despite High Court ruling

Vic Roads is instructing drivers of electric vehicles to keep paying a tax deemed “unconstitutional” by the High Court, despite the state government pledging to “comply” with the ruling.

Victorian electric vehicle drivers are being instructed to continue paying a tax deemed “unconstitutional” by the High Court, despite the state government pledging to “comply” with the landmark ruling.

Vic Roads is advising zero and low-emission vehicle drivers to renew their registrations as the state government examines whether it will be forced to refund drivers millions of dollars in revenue.

“Motorists who are due to renew their zero and low emission vehicle (ZLEV) registration should continue to do so,” the Vic Roads website reads.

“We are in the process of contacting all ZLEV customers directly to explain what the decision means for them and any next steps.”

The High Court on Wednesday declared the state tax on zero and lower emission vehicles was unlawful, which could result in millions of dollars being refunded to electric vehicle users.

Vic Roads is advising zero and low emission vehicle drivers to renew their registrations as the state government examines whether it will be forced to refund drivers.

Opposition Environment and Climate Change spokesman, James Newbury, called on the government to “immediately confirm that VicRoads would pause the collection of the Electric Vehicle Tax as part of the registration process”.

“Victoria has become an international laughing stock on electric vehicle policy. Sadly, we will all lose out, because the Labor government is in chaos,” he said.

It comes as the state government confirmed $5.1m in revenue had been reeled in through the road-user tax in the two past financial years — $1.2m in 2021 and $3.9m in 2022.

Another $2m has also been stripped from zero and low emission vehicle drivers so far this financial year, bringing the total to about $7m.

It comes as Treasurer Tim Pallas flagged the High Court’s decision could force the state to “totally recast the way that we raise revenue”, Treasurer Tim Pallas has flagged.

Mr Pallas on Thursday said the High Court ruling was a “matter of genuine concern” and could lead to constitutional challenges on other taxes.

“We’re obviously going to have to look at this, we’re going to have to look at which taxes may be impacted, and we’re going to have to think about whether or not there is legislative responses to secure the state’s revenue base or indeed whether there is an order for the Commonwealth to play in order to do that,” he said.

The High Court’s decision to scrap Victoria’s electric vehicle tax could force the state to ‘totally recast the way that we raise revenue’. Picture: David Geraghty

“The High Court has reimagined the constitution, but they upturned 50 years of interpretation of what constitutes an excise.”

Mr Pallas said the state could impose an added charge to car registration to work around the electric vehicle verdict.

“Yes, it could be. Although, we’ve got to now start to think about what this decision actually means to the broader interpretation that the majority of the High Court have taken, so we’ll have to think about that,” he said.

“It could well mean that we’ll have to totally recast the way that we raise revenue in this state, if the Commonwealth are heading down this path, but at the moment let’s not get too far ahead of ourselves.

“We’ve had 24 hours to absorb a 400-page judgment ... We can’t complain about the umpire, we just have to try and work within the new set of rules that they’re creating for us.”

Mr Pallas said the government was still seeking legal advice on whether it would refund the tax to electric vehicle users.

IJohn Pesutto says he fears a ‘political cartel’ of Labor governments will team up to raise taxes across the country. Picture: Josie Hayden

“I don’t think the government is particularly fazed with the fact that we might have to return a small amount of money,” he said.

“It’s about how we might be able to identify the class of people who are affected as a consequence, and might I say whether or not it’s proper in the circumstances to do it.”

Opposition Leader John Pesutto said he was concerned a “political cartel” of Labor governments would team up to raise taxes across the country.

“They’re going to give each other cover to raise taxes,” he said.

“We want businesses to grow and invest more and we want households to be given the opportunity to deal with growing cost of living pressures ... (but) we’re concerned that there’s this kind of Labor political cartel where they’re all together with an appetite to increase taxes.

“If there’s a way for Jacinta Allan and Tim Pallas to tax people, I’m sure they’ll take that opportunity. They’ve got form.”