Fuel tax is in trouble, and there are calls for an alternative now
Australian motorists pay 51¢ excise for every litre of petrol or diesel when they fill up at the bowser, which is expected to raise $17.7 billion for the federal government this financial year to fund road maintenance.
But electric vehicle owners have so far escaped any equivalent tax for their driving, prompting concerns the uptake of low- and zero-emissions vehicles will undermine the ability to maintain the road network.
Victoria implemented a short-lived road-user charge in 2021, which saw EV drivers pay around 2¢ every kilometre they drove on the state's roads. But that was quashed by a High Court decision in October 2023 which ruled the charge was an excise which only the Commonwealth can impose.
The Australian Financial Review reported in February that Treasurer Jim Chalmers told a closed-door dinner with business leaders that establishing a road user charge for EVs was a tax reform priority but he has said little publicly about implementing any such scheme.
EVs made up 11 per cent of new light vehicle sales in the first quarter of this year – 6.3 per cent battery electric (BEV) and 4.8 per cent plug-in hybrid (PHEV).
Helen Rowe, transport lead at Monash University's ClimateWorks centre, said the federal government's Economic Reform Roundtable on August 19 was the perfect springboard to put road user charging on the national agenda.
However, Rowe said the discussion should go beyond a simple one-for-one replacement of fuel excise, with a road user charge having the potential to boost productivity by tackling congestion and carbon emissions, and generating funds for public transport investment.
'We've seen cities manage congestion, manage emissions, build productivity and help reduce pressure to build more infrastructure – these things are potential benefits of road pricing,' she said.
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