Call to replace excise with national road user charge

Anthony Albanese is being urged to abolish the fuel excise and implement a new tax on all cars as part of an overhaul to the way roads are funded.

Fuel excise revenue is projected to decline further amid a rise in electric vehicle usage.

Anthony Albanese is being urged to abolish the fuel excise and implement a new road user tax on all cars as part of an overhaul to the way roads and their upkeep are funded.

A new major report from Infrastructure Partnerships Australia called on Labor to urgently implement a national distance-based road user charge to force motorists to “pay their fair share” for roads and to help drive down transport emissions.

The independent think tank has argued for the removal of the fuel excise, warning the policy is increasingly unsustainable after improvements in vehicle fuel efficiency eroded the total revenue collected.

With fuel excise revenue projected to decline further amid a rise in electric vehicle usage, motoring organisations have called for a nationally consistent model for road funding into the future.

IPA chief executive Adrian Dwyer warned motorists would be forced to pay more tax if the government failed to act.

“The central case for road user charging remains crystal clear: it is the most effective means to secure long-term funding for our roads. The question is not ‘if’ or ‘why’, but ‘who’ and ‘how’,” he said.

“Ultimately, most taxpayers don’t care which level of government handles the charges they pay for road use – they just want good quality roads and transport services, and for the charging system to be user-friendly.”

The calls come after the Victorian government’s controversial electric vehicle tax was struck down by the High Court, preventing other states from introducing road user charges and placing mounting pressure on federal Labor to ensure viability of the nation’s roads into the future.

The High Court ruled the tax unconstitutional, forcing the state to wind back its levy.

Under the tax – which was expected to raise about $30m over four years – motorists with electric vehicles were charged at a rate of nearly 3c per kilometre travelled, with drivers required to ­submit a photograph of their odometer once a year.

The IPA report, titled Completing Road Reform, argues that a nationally consistent road user charge will secure funding to maintain road networks while also bringing down emissions.

“Calls for road reform to address the country’s transport emissions are growing even louder, and with transport accounting for over a fifth of our greenhouse gas emissions each year it’s not hard to see why,” the report states.