CILTA’s Kim Hassall weighs in on what the current High Court decision on an EV road user charge in Victoria will mean for the future of an electric vehicle excise
As the debate around the road user charge on electric vehicles (EVs) continues to rage on in the High Court of Australia, what could be the outcome?
Two electric car owners began the battle in Canberra in February, taking on the road user charge implemented to EV owners in Victoria in July 2021.
The drivers argued that the road user charge imposes an excise, which only the Commonwealth can do under the constitution.
While all of the state and territory bodies have supported Victoria’s call, the Commonwealth has taken the drivers’ side in the legal fight.
As we know, EVs won’t pay the fuel excise and therefore the redistribution of the excise bucket, at least to Victoria, will probably be lower.
So let’s levy a state replacement fee which we will call a road user charge. I find it funny that when a tax crosses a state border that it no longer remains a tax, but instead becomes a charge. It’s funny how a leopard can change its spots when it crosses a state border.
Many years ago, the then NRTC examined the difference between a tax, a fee and a charge and decided there was really only a semantic difference. However, luckily, we are not arguing the difference between a rebate and a subsidy, which has more recently arisen in relation to diesel fuel credits when there is a mile of actual difference between these two terms and their delivery. But that is a different argument for another day.
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For the casual observer, the road freight industry actually has a Road User Charge (a RUC), which comes into play in the NTC’s PAYGO model, whose first determination goes back to 1995.
What can any future EV road user charge learn from the truck RUC?
Well, the truck RUC, combined with the registration fee, covers the attributable cost of road infrastructure damage and a common cost allocation to trucks above 4.5 tonnes GVM.
The truck Road User Charge, however, has generally been a retrospectively calculated charge based on actual road expenditures on maintenance, road rehabilitation and a component of new road related infrastructure.
So what will an EV Road User Charge reflect? An allocation to EVs of attributable road use expenditure, a calculated makeup for a lost share of excise, or just an addition to a state general revenue jar with no link to actual road use or costs?
Will a future EV road user charge actually have some level of hypothecation, backward or forward looking, to the actual roads and infrastructure that the EVs use? The High Court decision on this case will be very interesting.