Fee overhaul of Victoria’s road taxes on horizon with focus on variable taxes

A major overhaul of the state’s fuel and motoring taxes could spell a major shift in costs for drivers.

Motoring and similar fuel taxes could be scrapped in Victoria under a major set of road reforms backed by the state government.

The plan would come into place over the next decade and focus on replacing fixed road user charges with variable taxes.

This would build on the state’s user charge for electric vehicles which sits at 2.5c per kilometre.

It comes months after Infrastructure Victoria’s recommendations which pinpointed “gradually expanding and reforming the existing electric vehicle charge” over the next decade.

The plan would be put in place swapping by fixed road user charges for variable distance-based fees — meaning drivers would essentially pay depending on how much they drive.

The changes were drafted under the expectation there will be a surge in low emissions vehicles over the next decade.

A fee overhaul could be on the horizon for Melbourne drivers. Picture: David Geraghty

However, in its own infrastructure plan released on Thursday, the state government said it supported the plan in principle, but it would remain subject to revisions.

“The introduction of distance-based charging for zero and low-emission vehicles in Victoria is a first step in ensuring the long-term sustainability of the transport network by making sure everyone pays their fair share to build and maintain our roads,” it said.

“(The Government) is considering the long-term effects of the erosion of revenue from the fuel levy as more vehicles move to non-fossil fuels and electric propulsion.”

Originally published as Fee overhaul of Victoria’s road taxes on horizon with focus on variable taxes