Teal MPs call for national road-user charges after high court shuts down Victoria’s EV tax | Electric vehicles

Teal independent MPs have welcomed the high court’s decision to strike down Victoria’s electric vehicle tax, urging the federal government to instead legislate national road-user charges.

Zoe Daniel, Allegra Spender, Monique Ryan and Kylea Tink have all called for road use charges to apply fairly to all vehicles, with a nationally consistent scheme that does not target EVs.

On Thursday the treasurer, Jim Chalmers, left the door open to the proposal, indicating that federal Labor wanted to “work with the Victorians and with the other states and territories on policy relating to electric vehicles” to respond to the high court’s decision.

The high court ruled that the imposition of a tax by the Victorian government for each kilometre ​driven was unconstitutional because the states do not have the power to impose such excise taxes on consumption.

Ryan said she welcomed the decision since Victoria’s tax “could have actively disincentivised drivers from transitioning to EVs” which would be a “retrograde step”.

Ryan also said she didn’t support “individual states and territories’ bitsy little taxes that contribute to [the] complexity of our tax system, without a national approach to an important problem”.

“The federal government should lead this,” she said. “We need a national plan that works out how to maintain our roads in a way that’s fair, and aimed at helping, not hindering, electrification of transport.”

Daniel said the decision was “a wake up call for the Albanese government”.

“Transport minister Catherine King needs to get her skates on and introduce fuel standards designed to encourage the sale of fuel efficient vehicles and EVs and in line with comparable countries,” she said.

“We need the government to initiate an equitable plan for a national road-user charge so that all road users pay their fair share for using our highways.”

Spender said: “While more and more Australians are now shifting to EVs, it’s important we don’t put additional barriers in place that might drive buyers to stay with fossil fuels rather than EVs.

“The court decision makes clear that the federal government must take a leadership role in fixing our failed transport tax system.”

Spender called for “a comprehensive road-user charge that applies fairly to all vehicles” to “to incentivise the shift to EVs, whilst maintaining a strong tax base for the future as fuel excise revenue declines”.

Tink said she would welcome “a sensible conversation about a national road-user charge, including a pricing regime that considers all the negative externalities associated with vehicle use, from carbon emissions to road damage, congestion, and health impacts”.

“The Victorian EV tax was not sensible. It targeted electric vehicle drivers at an early stage of adoption [and] was rushed and poorly administered.”

Independent MP Zali Steggall said she did not “see a clear case for EV road-user charging in the immediate future” because “EVs will play an important role in our efforts to decarbonise”.

“To support Australia’s transition to net zero the government needs to encourage EV uptake. Tax incentives, such as a generous sales tax rebates have helped countries like Germany and Norway successfully increase the uptake of EVs.”

The Greens also welcomed the high court decision, but urged the Albanese government to rule out introducing a tax on electric vehicles.

“We should be making electric vehicles cheaper and more affordable, not making them more expensive with an electric vehicles tax,” Greens leader, Adam Bandt, said.

The opposition’s transport spokesperson, Bridget McKenzie, said on Wednesday that Labor had been “very flat footed” on road-user charging.

McKenzie noted that the $13.7bn collected from fuel excise is in decline, driven by the uptake of EVs.

In September, McKenzie told a road user charging conference in Singapore that “every time a high-net worth Australian citizen buys an electric vehicle, they immediately stop paying fuel excise and stop contributing towards that cost of maintaining our roads”.

“As a result, with each passing week, the fuel excise in Australia becomes less and less equitable.

“And the implementation of a road user charge becomes more necessary and more inevitable.”

Chalmers said the federal government was “big supporters of electric vehicles”. “That’s why we’ve got the tax cuts to encourage more people to take up EVs, that’s why we’re also committed to the fuel efficiency standard.”