The Future of Road Taxes in the spotlight as South Australia imposes Electric Vehicle Tax from 2021

The cat is now well and truly among the pigeons. A fight that has been brewing but held off has commenced with the South Australian Government introducing a road-usage charge for Low and Zero emissions vehicles from 2021.

Straight off the bat this has set the cat out there running around.

Boss of the EV council here in Australia Behyad Jafari says this is happening at the wrong time for EVs “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”

Going on to say “If the revenue from fuel excise is falling because South Australians are burning less foreign oil, that should be considered a blessing,”

But then there was this from Jafari saying “It’s like responding to a drop in the tobacco tax take by slamming a new excise on nicotine gum.”

I’ll get to that in a moment. Over at the traditional car industry, the CEO of the Federal Chamber of Automotive Industries Tony Weber says “The announcement this morning that the South Australian Government plans to introduce a road user charge for low and zero emission vehicles (LZEVs) is simply beyond belief.

“All around the world, developed countries recognise the environmental and health benefits of low and zero emission vehicles.  These countries encourage the uptake of LZEVs through incentivisation and the deployment of infrastructure.

“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,” Mr Weber said.

But here’s the issue. It’s chicken and egg in a way. Do we encourage EV take up and then land ourselves in hot water over loss of revenue?

Jafari’s claim that it’s like taxing Nicotine Gum is ridiculous. Tobacco kills, and the impact on the health system is tangible when smoking is reduced. I don’t believe the same is as clear cut with the “health benefits” of a higher number of EVs on our roads.

And we do need to talk about it now.

In April last year I wrote of the issue of Fuel Excise revenue, outlining that today, the Fedearl Government reaps a staggering $17 BILLION dollars a year from us paying taxes when we buy petrol!  By 2030 with the projected growth in that revenue that has been anticipated over the years, that will grow to $27 BILLION (Should we not switch to Electric).  

Now firstly, that doesn’t just split in half, we’re talking about 50% of NEW Vehicle sales, in 2030, when we reach 50%, the percentage of Electric cars on the road in Australia would be less than 15%.

What the Government of the day needs to work it is how to they fund the short-fall.  It’s around $1000-$1500 per year per car and goes up every year.

It’s a huge amount of money, and while the EVs are out there, they are using the roads, so outside of Rego, what input are they having into the infrastructure? The debate needs to happen now. And nationally.