Victorian Parliament passes EVs tax

Denham Sadler
National Affairs Editor

A controversial new distance-based tax for electric vehicle owners has passed Victorian Parliament and will come into effect from July.

The “zero and low-emission vehicle distance-based charge” will see electric vehicle owners charged 2.5c per kilometre travelled and hybrid owners charged 2c per kilometre. The controversial legislation was passed unamended on Tuesday night with two key Crossbenchers supporting it along with the Labor government.

The new tax has been slammed by the Greens and a coalition of manufacturers and industry groups, who recently labelled it the “worst EVs policy in the world”, while the Opposition also voted against it.

Victoria has passed a new tax on EVs

The state government said the tax is “modest” and pales in comparison to the $100 million support package for EVs unveiled earlier this month. Key crossbencher Fiona Patten, the leader of the Reason Party, also supported the bill, saying that it won’t stop anyone from buying an electric vehicle, and will incentivise people to use private vehicles less.

The plan for a road charge based on distance travelled for electric vehicles was announced by the state government in November last year, and is expected to raise about $30 million over four years, with owners to pay an average of $300 per year.

Electric vehicle owners will have to keep a log of their driving, with this information used to calculate how much extra they will have to pay when they renew their car registration. Photos of a vehicle’s odometer will be provided to the state government via an online portal.

The Labor government announced a $100 million plan to support the uptake of EVs in the state earlier this month, with an overarching goal to have half of all car sales being electric by 2030.

This plan includes 20,000 subsidies of up to $3000 for new electric vehicle purchases of less than $69,000, $19 million for charging stations and $10 million to expand the government’s EV fleet by 400 cars.

Speaking in Parliament on Tuesday night, government MP Sonja Terpstra said the new charge will ensure electric vehicles are on parity with normal fuel-based vehicles.

“The government wants to introduce this charge in readiness so that once the uptake of low-emissions vehicles becomes more prevalent we can then look at providing relevant support for further uptake of those vehicles,” Ms Terpstra said.

“But also the charges that are going to be levied will then support further supports for the uptake of low-emissions vehicles.”

The new distance-based charge also provides an incentive for Victorians to use their vehicles less, she said.

Ms Patten and Animal Justice Party MP Andy Meddick provided the deciding support for the legislation.

Ms Patten said she was supporting the legislation because of the current climate emergency, saying it is a “fair and efficient way of raising revenue”.

“EV drivers are not telling me that paying $240 a year is going to break the bank for them. This bill is not going to stop people from purchasing EVs. Why should EVs not have a user charge?” Ms Patten said in Parliament.

The state needs to have less cars on the roads, and the policy will effectively incentivise people to use their private vehicles less, Ms Patten said.

Greens Leader Dr Samantha Ratnam had earlier urged the crossbench to vote against the EVs tax, labelling it a “terrible public policy” and “another barrier to the rapid uptake of electric vehicles”.

“It is a lazy, regressive way to increase state revenue that will have unnecessary negative impacts, particularly for regional drivers, when well-thought through fair road-user charges are an alternative,” Dr Ratnam said.

Dr Ratnam also said the incentive package announced recently by the state government is “tokenistic” and “will not overcome the significant long-term barrier the tax will have on uptake of electric vehicles”.

But Ms Patten said the criticisms of the crossbenchers voting in favour of the bill were “disingenuous”.

“It is completely disingenuous to be telling the crossbench that we are not progressive, that we do not understand the issues, that we are stupid and that we are misinformed. The type of condescending rhetoric that we have received really says more about them than it does about us,” she said.

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