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The Australian
5 days ago
- Automotive
- The Australian
New road user tax: How much Aussie EV owners could soon pay per kilometre
The Federal Government is advancing plans for electric vehicle owners to pay a new 'road-user charge', but it may not stop at EV drivers. In Australia, drivers currently pay a fuel excise of 51.6 cents per litre every time they fill up. According to the Government, that money goes towards building and maintaining the nation's roads. But EV drivers currently pay nothing. The Productivity Commission has warned that Australia's $12 billion a year fuel excise is in 'terminal decline' as more drivers switch to low-and zero-emission cars. The proposed solution, currently being discussed and advanced by Treasurer Jim Chalmers, is a distance-based charge for EV drivers, but industry experts say it could be rolled out more broadly to cover all light vehicles, like in New Zealand. If that happens, it could mean all motorists pay a set fee for every kilometre they travel, regardless of whether they drive a diesel ute, petrol SUV, hybrid small hatchback or electric sedan. MORE: New road charge coming for EV drivers The Productivity Commission says all road users should contribute to the cost of infrastructure. (AAP Image / Julian Andrews). What is the road-user charge? Currently, Australian drivers of petrol and diesel pay a fuel excise – a tax of 51.6c per litre – every time they fill up. This tax money is used to build and maintain roads. Electric vehicle (EV) owners currently pay nothing, meaning as more Australians switch to EVs, the government's road funding pool is shrinking. A road-user charge (RUC) would change that by making EV drivers pay for each kilometre they travel. The aim is to ensure all road users contribute to the upkeep of the network, regardless of what powertrain they drive. In New Zealand, the approach is going even further. From 2027, all light vehicles – petrol, diesel, hybrids, and electric will be charged based on distance travelled and vehicle weight. This national approach means everyone pays for the exact road use they generate, but it also means some are paying more than others. If the same road-user charge is applied to all light vehicles in Australia, it's understood that would be instead of paying fuel excise, not on top of it. However, this is a big shift and has not been discussed or committed to yet. MORE: EV tax 'makes no sense' Petrol and diesel drivers currently pay a 51.6c per litre excise to fund road maintenance. Picture: NCA NewsWire / Andrew Henshaw How would it work? Victoria implemented a road user charge for electric and plug-in hybrid vehicles that later failed a court challenge, leading to millions of dollars in refunds. It worked like this: – Flat rate for EVS of approximately 2.8c/km – Flat rate for Plug-in hybrids of approximately 2.3c/km – Distance measured by odometer photos or an app – Funds directed to road maintenance and construction There have been discussions about exemptions or rebates for regional motorists, who often drive far greater distances, and others argue the charge should eventually apply to all vehicles, not just EVs. New Zealand's Road User Charge (RUC) framework does not offer specific exemptions or rebates for regional motorists based on travel distance. However, there are exemptions for certain vehicle types, such as: – Electric vehicles over 3.5 tonnes (heavy EVs), remain exempt until 1 July 2027. – Light electric vehicles under 1,000kg remain exempt. – Vehicles unsuitable for public roads or used almost exclusively off-road can apply for exemptions. MORE: China unveils plan to take on Tesla in Australia From 2027 the New Zealand model will charge all light vehicles based on distance travelled and weight, not just electric cars. Picture: Jonathan Ng When could it happen? Prime Minister Anthony Albanese has ruled out new taxes this term, so not before 2027. Treasurer Jim Chalmers has signalled it as a 'second term' reform, after further consultation with states and industry. If the RUC is applied to EVs only Using Victoria's scrapped 2.8c/km rate: City driver – 12,000km/year – EV: $336 a year (currently $0) – Petrol/diesel: No change – still pay fuel excise Regional driver (or high-mileage drivers) – 30,000km/year – EV: $840 a year (currently $0) – Petrol/diesel: No change – still pay fuel excise If the RUC is applied to EVs only, then EV owners, especially high-mileage or regional drivers, will be impacted. Outer-suburban and regional drivers typically driver far more than inner city drivers, not because they want to, but because they have to. According to data buyers searching for home up to an hour from the CBD have dramatically more choice, with as much as eight times the number of houses available compared to a 30-minute radius. Electric vehicle owners could soon face a per-kilometre tax under new federal plans. Picture: Mark Bean What if it expands to all vehicles like New Zealand? If Australia adopts a national RUC for light commercial vehicles, like New Zealand, the impact on your wallet would depend heavily on the type of vehicle you drive and how far you travel each year. For example, a large ute or SUV such as a Toyota HiLux, Ford Ranger or Toyota LandCruiser Prado uses approximately 10L/100km, which means drivers would pay roughly $336 a year under a 2.8c/km charge if they drive the national average of 12,000km. That's about $283.20 less than the $619.20 you'd currently pay in fuel excise, and the savings would be even bigger for high-mileage regional drivers. High-mileage vehicles like utes could face high costs under distance-based road tax. Picture: Supplied If the RUC is applied to everyone, similar to what New Zealand is implementing in 2027, then heavy/less efficient vehicles like petrol or diesel utes and SUVs will come out ahead. While EVs and very efficient hybrids will pay more than under fuel excise. However, owning an EV and paying per-km RUC will still be cheaper than what ICE drivers pay via fuel excise. Danielle Collis Journalist and Reporter Danielle's background spans print, radio and television, she has contributed to outlets such as The Age, ABC, Channel Nine and many more. For more than four years, Danielle has worked as Liz Hayes' producer and investigative journalist on her show 'Under Investigation', covering everything from corporate scandals to Australia's most baffling crime cases. Danielle's covered a range of topics from breaking news, politics, lifestyle and now motoring. Danielle Collis
Daily Telegraph
5 days ago
- Automotive
- Daily Telegraph
New road user tax: How much Aussie EV owners could soon pay per kilometre
Don't miss out on the headlines from Motoring. Followed categories will be added to My News. The Federal Government is advancing plans for electric vehicle owners to pay a new 'road-user charge', but it may not stop at EV drivers. In Australia, drivers currently pay a fuel excise of 51.6 cents per litre every time they fill up. According to the Government, that money goes towards building and maintaining the nation's roads. But EV drivers currently pay nothing. The Productivity Commission has warned that Australia's $12 billion a year fuel excise is in 'terminal decline' as more drivers switch to low-and zero-emission cars. The proposed solution, currently being discussed and advanced by Treasurer Jim Chalmers, is a distance-based charge for EV drivers, but industry experts say it could be rolled out more broadly to cover all light vehicles, like in New Zealand. If that happens, it could mean all motorists pay a set fee for every kilometre they travel, regardless of whether they drive a diesel ute, petrol SUV, hybrid small hatchback or electric sedan. MORE: New road charge coming for EV drivers The Productivity Commission says all road users should contribute to the cost of infrastructure. (AAP Image / Julian Andrews). What is the road-user charge? Currently, Australian drivers of petrol and diesel pay a fuel excise – a tax of 51.6c per litre – every time they fill up. This tax money is used to build and maintain roads. Electric vehicle (EV) owners currently pay nothing, meaning as more Australians switch to EVs, the government's road funding pool is shrinking. A road-user charge (RUC) would change that by making EV drivers pay for each kilometre they travel. The aim is to ensure all road users contribute to the upkeep of the network, regardless of what powertrain they drive. In New Zealand, the approach is going even further. From 2027, all light vehicles – petrol, diesel, hybrids, and electric will be charged based on distance travelled and vehicle weight. This national approach means everyone pays for the exact road use they generate, but it also means some are paying more than others. If the same road-user charge is applied to all light vehicles in Australia, it's understood that would be instead of paying fuel excise, not on top of it. However, this is a big shift and has not been discussed or committed to yet. MORE: EV tax 'makes no sense' Petrol and diesel drivers currently pay a 51.6c per litre excise to fund road maintenance. Picture: NCA NewsWire / Andrew Henshaw How would it work? Victoria implemented a road user charge for electric and plug-in hybrid vehicles that later failed a court challenge, leading to millions of dollars in refunds. It worked like this: – Flat rate for EVS of approximately 2.8c/km – Flat rate for Plug-in hybrids of approximately 2.3c/km – Distance measured by odometer photos or an app – Funds directed to road maintenance and construction There have been discussions about exemptions or rebates for regional motorists, who often drive far greater distances, and others argue the charge should eventually apply to all vehicles, not just EVs. New Zealand's Road User Charge (RUC) framework does not offer specific exemptions or rebates for regional motorists based on travel distance. However, there are exemptions for certain vehicle types, such as: – Electric vehicles over 3.5 tonnes (heavy EVs), remain exempt until 1 July 2027. – Light electric vehicles under 1,000kg remain exempt. – Vehicles unsuitable for public roads or used almost exclusively off-road can apply for exemptions. MORE: China unveils plan to take on Tesla in Australia From 2027 the New Zealand model will charge all light vehicles based on distance travelled and weight, not just electric cars. Picture: Jonathan Ng When could it happen? Prime Minister Anthony Albanese has ruled out new taxes this term, so not before 2027. Treasurer Jim Chalmers has signalled it as a 'second term' reform, after further consultation with states and industry. If the RUC is applied to EVs only Using Victoria's scrapped 2.8c/km rate: City driver – 12,000km/year – EV: $336 a year (currently $0) – Petrol/diesel: No change – still pay fuel excise Regional driver (or high-mileage drivers) – 30,000km/year – EV: $840 a year (currently $0) – Petrol/diesel: No change – still pay fuel excise If the RUC is applied to EVs only, then EV owners, especially high-mileage or regional drivers, will be impacted. Outer-suburban and regional drivers typically driver far more than inner city drivers, not because they want to, but because they have to. According to data buyers searching for home up to an hour from the CBD have dramatically more choice, with as much as eight times the number of houses available compared to a 30-minute radius. Electric vehicle owners could soon face a per-kilometre tax under new federal plans. Picture: Mark Bean What if it expands to all vehicles like New Zealand? If Australia adopts a national RUC for light commercial vehicles, like New Zealand, the impact on your wallet would depend heavily on the type of vehicle you drive and how far you travel each year. For example, a large ute or SUV such as a Toyota HiLux, Ford Ranger or Toyota LandCruiser Prado uses approximately 10L/100km, which means drivers would pay roughly $336 a year under a 2.8c/km charge if they drive the national average of 12,000km. That's about $283.20 less than the $619.20 you'd currently pay in fuel excise, and the savings would be even bigger for high-mileage regional drivers. High-mileage vehicles like utes could face high costs under distance-based road tax. Picture: Supplied If the RUC is applied to everyone, similar to what New Zealand is implementing in 2027, then heavy/less efficient vehicles like petrol or diesel utes and SUVs will come out ahead. While EVs and very efficient hybrids will pay more than under fuel excise. However, owning an EV and paying per-km RUC will still be cheaper than what ICE drivers pay via fuel excise. Originally published as Petrol, diesel, hybrid or EV: What new road user charge could mean for you
News.com.au
6 days ago
- Automotive
- News.com.au
Petrol, diesel, hybrid or EV: What new road user charge could mean for you
The Federal Government is advancing plans for electric vehicle owners to pay a new 'road-user charge', but it may not stop at EV drivers. In Australia, drivers currently pay a fuel excise of 51.6 cents per litre every time they fill up. According to the Government, that money goes towards building and maintaining the nation's roads. But EV drivers currently pay nothing. The Productivity Commission has warned that Australia's $12 billion a year fuel excise is in 'terminal decline' as more drivers switch to low-and zero-emission cars. The proposed solution, currently being discussed and advanced by Treasurer Jim Chalmers, is a distance-based charge for EV drivers, but industry experts say it could be rolled out more broadly to cover all light vehicles, like in New Zealand. If that happens, it could mean all motorists pay a set fee for every kilometre they travel, regardless of whether they drive a diesel ute, petrol SUV, hybrid small hatchback or electric sedan. What is the road-user charge? Currently, Australian drivers of petrol and diesel pay a fuel excise – a tax of 51.6c per litre – every time they fill up. This tax money is used to build and maintain roads. Electric vehicle (EV) owners currently pay nothing, meaning as more Australians switch to EVs, the government's road funding pool is shrinking. A road-user charge (RUC) would change that by making EV drivers pay for each kilometre they travel. The aim is to ensure all road users contribute to the upkeep of the network, regardless of what powertrain they drive. In New Zealand, the approach is going even further. From 2027, all light vehicles – petrol, diesel, hybrids, and electric will be charged based on distance travelled and vehicle weight. This national approach means everyone pays for the exact road use they generate, but it also means some are paying more than others. If the same road-user charge is applied to all light vehicles in Australia, it's understood that would be instead of paying fuel excise, not on top of it. However, this is a big shift and has not been discussed or committed to yet. How would it work? Victoria implemented a road user charge for electric and plug-in hybrid vehicles that later failed a court challenge, leading to millions of dollars in refunds. It worked like this: – Flat rate for EVS of approximately 2.8c/km – Flat rate for Plug-in hybrids of approximately 2.3c/km – Distance measured by odometer photos or an app – Funds directed to road maintenance and construction There have been discussions about exemptions or rebates for regional motorists, who often drive far greater distances, and others argue the charge should eventually apply to all vehicles, not just EVs. New Zealand's Road User Charge (RUC) framework does not offer specific exemptions or rebates for regional motorists based on travel distance. However, there are exemptions for certain vehicle types, such as: – Electric vehicles over 3.5 tonnes (heavy EVs), remain exempt until 1 July 2027. – Light electric vehicles under 1,000kg remain exempt. – Vehicles unsuitable for public roads or used almost exclusively off-road can apply for exemptions. When could it happen? Prime Minister Anthony Albanese has ruled out new taxes this term, so not before 2027. Treasurer Jim Chalmers has signalled it as a 'second term' reform, after further consultation with states and industry. If the RUC is applied to EVs only Using Victoria's scrapped 2.8c/km rate: City driver – 12,000km/year – EV: $336 a year (currently $0) – Petrol/diesel: No change – still pay fuel excise Regional driver (or high-mileage drivers) – 30,000km/year – EV: $840 a year (currently $0) – Petrol/diesel: No change – still pay fuel excise If the RUC is applied to EVs only, then EV owners, especially high-mileage or regional drivers, will be impacted. Outer-suburban and regional drivers typically driver far more than inner city drivers, not because they want to, but because they have to. According to data buyers searching for home up to an hour from the CBD have dramatically more choice, with as much as eight times the number of houses available compared to a 30-minute radius. What if it expands to all vehicles like New Zealand? If Australia adopts a national RUC for light commercial vehicles, like New Zealand, the impact on your wallet would depend heavily on the type of vehicle you drive and how far you travel each year. For example, a large ute or SUV such as a Toyota HiLux, Ford Ranger or Toyota LandCruiser Prado uses approximately 10L/100km, which means drivers would pay roughly $336 a year under a 2.8c/km charge if they drive the national average of 12,000km. That's about $283.20 less than the $619.20 you'd currently pay in fuel excise, and the savings would be even bigger for high-mileage regional drivers. If the RUC is applied to everyone, similar to what New Zealand is implementing in 2027, then heavy/less efficient vehicles like petrol or diesel utes and SUVs will come out ahead. While EVs and very efficient hybrids will pay more than under fuel excise.
News.com.au
6 days ago
- Automotive
- News.com.au
Plans being fast-tracked for new road user charge for EV drivers
The free ride enjoyed by drivers of electric vehicles is coming to a close with Treasurer Jim Chalmers and state governments fast-tracking plans for a new road-user charge. The Treasurer has long flagged the development of a new road-user charge across Australia for drivers of electric vehicles to ensure EV drivers are contributing a fair share to road upgrades. Now the government, state treasurers and industry experts are gathering to hold high-level talks on how a new road user charge will work ahead of next week's economic roundtable in Canberra. All Australian motorists who buy petrol and diesel at the bowser pay 51.6 cents a litre in fuel excise. Based on a planned NSW road user scheme, a national rollout will depend on your mileage but might cost between $300 and $400 a year. NSW officials have forecast $73 million in revenue from the road-user charge for the 2027-2028 financial year – increasing to $141 million the following 12 months. The Infrastructure Partnerships Australia road-user charging forum in Sydney this week will include officials from the NSW and Victorian Treasury departments, the Productivity Commission, Transurban chief executive Michelle Jablko and Australian Automobile Association managing director Michael Bradley. Victorian Treasurer Tim Pallas said that electric vehicles are 'heavier and do more damage to the road network as a consequence than do internal combustion engine vehicles'. 'But there's an environmental plus to electric vehicles,'' he told The Australian. 'So getting that balance right was key to us. The way we figured it, (a road-user charge) came in about half of the equivalent costs of fuel excise and that's not counting the incentives the state was putting into the vehicle purchase or registration for low-emissions vehicles,' Mr Pallas added. The Productivity Commission has urged the Albanese government to take action over declining fuel excise revenue amid spiralling rising maintenance costs. 'By giving drivers a clear signal about the cost of infrastructure, they would have an incentive to use it more efficiently,' the Productivity Commission report said. The Treasurer has made no secret of his support for a shake-up of the current system before the election, raising the idea with business leaders in February. 'We will also continue to work with states and territories on the future of road-user charging,'' Dr Chalmers said in June. 'All of this represents a big agenda on the supply side of our economy. None of these reforms are simple.' How does fuel excise work? The current rate of fuel excise is 51.6 cents in excise for every litre of fuel purchased. For a typical household with a car running on petrol, the tax costs more than $1200 a year. But the flat sales tax isn't paid by drivers of pure electric vehicles, who simply need to plug in their cars to recharge. While registration and driver's licence fees go to state and territory governments, fuel excise is collected by the federal government. Australian motorists paid an estimated $15.71 billion in net fuel excise in 2023-24, and are expected to pay $67.6 billion over the four years to 2026-27. However, governments have long-warned that a road-user charge will be required to fill the gap in the budget left by declining revenue from the fuel excise, as the petrol and diesel engines in new cars consume less fuel and Australians adopt hybrid and electric cars. What does the AAA say? The Australian Automobile Association (AAA) is calling for a national approach to road-user charging but wants a guarantee the revenue will be earmarked for road upgrades. The AAA backs a distance-based road-user charging as a fairer and more equitable way to fund land transport infrastructure. The 2024 federal budget forecasted a reduction in fuel excise receipts by $470 million over four years from 2024-25. Roadblocks to reform Currently, New South Wales is the only state with firm plans to introduce a road-user charge from 2027 or when EVs reach 30 per cent of new car sales. Plug-in hybrid EVs will be charged a fixed 80 per cent proportion of the full road-user charge to reflect their vehicle type. Western Australia has also stated an intention to implement a road-user charge. Meanwhile, Victoria's electric vehicle levy had to be scrapped following a ruling from the High Court. Two Victorian electric car owners launched a legal challenge on the basis the tax was not legal as it was an excise that only a federal government could impose. They won with the High Court upholding the legal challenge. There have been several false starts to enshrine a road-user charge including in South Australia, where the former Liberal Government planned to introduce a charge for plug-in electric and other zero emission vehicles, which included a fixed component and a variable charge based on distance travelled. It was later pushed back to 2027 due to a backlash before the legislation was ultimately repealed. 'Gold standard' for reform Some experts argue the gold standard for reform is a variable rate that factors in the vehicle's mass, distance travelled, location, and time of day. But there's a big barrier to the Commonwealth imposing those charges because the Constitution prohibits it from imposing taxes that discriminate between states or parts of states. State governments could impose those levies, but as the experience of the Victorian Government underlines, it is legally complex.
