Budget move seen as globally unilateral and retrograde by industry groups
South Australian Treasurer Rob Lucas’ Budget plan to tax electric vehicles (EVs) has engendered a significant negative industry response nationally.
It isn’t something the state government makes much of a fanfare about but renewable-energy and EV proponents and vehicle vendors are quick to reject the idea, while the Australian Logistics Council (ALC) wants the nation to avoid yet another unilateral state-policy landmine in need of future defusing nationally.
The SA government says it will spend $18.3 million over four years on an Electric Vehicle Action Plan (EVAP), to establish a state-wide electric vehicle charging network to increase the uptake of EVs.
But this comes with an electric and zero emission vehicles user charge as from July 1, based on distance travelled, to contribute towards road maintenance – an idea the New South Wales government proposes in the ‘NSW Review of Federal Financial Relations: Supporting the road to recovery’ document.
While the ALC is calling for a transparent national approach to the design and implementation of any charge, it notes the Budget papers indicating consultations with other states and territories on the concept.
While welcoming the EVAP as an infrastructure investment that would “assist in the staged transition of vehicles from fuel to electric powered vehicles”, ALC wants more work done, with industry properly represented in the discussions designing any proposed user charge so that it is both nationally uniform and efficient.
“Australia functions as a single national market. It is imperative that there is a consistent road user charge operating throughout the nation so that businesses who decide to make an early transition to electric vehicles can make appropriate purchasing decisions,” CEO Kirk Coningham says.
“Governments around Australia should therefore now indicate where the process of developing a road user charge for electing vehicles has arrived at so that industry can assist in designing a scheme that is practical and actually works in practice.
“Designed correctly, the approach can be directly applied in other programs including the long-running Heavy Vehicle Road Reform process which is designed to modernise the way in which heavy vehicles are charged to access Australia’s roads.”
Read about impediments to fleet EV take-up, here
The Federal Chamber of Automotive Industries (FCAI) CEO Tony Weber is trenchant in his criticism, describing the move on low and zero emission vehicles (LZEVs) as “beyond belief”.
“We believe this charge will make South Australia the only jurisdiction in the world that actually opposes the uptake of low and zero emission vehicles,” Weber says.
“The automotive industry realises that excise, and the treatment of motorists and their vehicles, is a long-term issue.
“We recognise that road user charging is a complex topic that needs to be discussed in a holistic manner and on a national basis.
“But first, we need to have a sophisticated discussion about how we encourage the uptake of all low and zero emission vehicles into our marketplace.
“These vehicles offer economy wide benefits, including improved health outcomes, and will make a major contribution to improving our environmental scorecard.”
Electric Vehicle Council (EVC) chief executive Behyad Jafari blasts the move as mistaken in conception and proposed implementation.
“While governments around the world are using every means possible to incentivise the uptake of electric vehicles, South Australia reckons they have it all wrong,” Jafari says.
“If the revenue from fuel excise is falling because South Australians are burning less foreign oil, that should be considered a blessing.
“Overall, it’s good for air quality, it’s good for the health budget, it’s good for carbon emissions, and it’s great for economic sovereignty.
“The last thing any sane government would do is try to hit the brakes on this trend.
“It’s like responding to a drop in the tobacco tax take by slamming a new excise on nicotine gum.
“There’s no special bucket of money for roads. Roads need to be paid for from general revenue, just like everything else.
“There is zero need for the SA government to slap a big new tax on an emerging technology that delivers so much for the community.”
On the other hand
However, the tax was welcomed by the Australian Automobile Association (AAA) which has long argued that Australia needs a new way of funding transport projects, as technological shifts reduce fuel excise revenue.
AAA managing director Michael Bradley insists the South Australian government is right to start this transition by focusing on electric vehicles, just as many other jurisdictions are around the globe, but cautioned that the federal government needs to play a coordinating role to ensure drivers are treated consistently across the nation.
“The South Australian Government deserves to be congratulated on taking a position of leadership and for taking on a tax reform that has for too long sat in the too-hard basket,” Bradley says.
“Ensuring all drivers contribute to the transport projects we all need makes our tax system more sustainable and more equitable, however a state-by-state approach to what in reality is a national road network and a national market, brings risks. Inconsistent approaches risk unnecessary cost, inequity, and confusion.
“This is a critically important reform and one that the federal government needs to take an interest in to ensure changes are made consistently, equitably, and in a manner that does not disincentivise technological transition.”
According to the AAA, South Australia will join US states of California, Utah, Oregon and Washington, which are already either implementing or trialling road-user charging systems that incorporate EVs.