EV Road User Charge: ‘A Great Big New Tax on Not Polluting’


The State Government’s proposed road user charge for electric vehicles, as announced in the Budget, is a backwards and unnecessary step for the state that contradicts its supposed commitment to increasing the uptake of EVs into the future, The Australia Institute has said.

Key points:

  • The State Government is planning to introduce a ‘road user charge’ for electric vehicles, which will include both a fixed component and a charge based on distance travelled.
  • Fuel excise, the tax that the EV road user charge is supposed to be replacing, is a federally levied tax that goes to general revenue and is not hypothecated to roads funding.
  • In an admission that the uptake of electric vehicles will continue to be supressed in South Australia, the budget states ‘Collections from the proposed user charge are expected to be very low across the forward estimates while there are still very few electric and zero emissions vehicles in South Australia’.

“Penalising electric car owners because they don’t consume petrol that pollutes the atmosphere and our environment is absurd,” said Noah Schultz-Byard, SA Director at The Australia Institute.

“This is, in essence, a great big new tax on not polluting. I can’t see how Adelaide will become the electric vehicle capital of Australia if the SA Government arbitrarily penalises the future industry that it supposedly wants to develop.

“As the budget papers show, this regressive move will undermine the government’s supposed goal of increasing the uptake of electric vehicles in SA.

Our research shows that there are a range of policies that support the uptake of EVs which are very popular with the South Australian people. These include offering loans for electric vehicle purchases, building more charging stations and removing the Luxury Car Tax on zero emissions cars.

“It is somewhat disingenuous to suggest that roads are funded by the fuel excise, as that money is collected by the Federal Government and goes towards general revenue. If the State Government is looking to increase general revenues, there are far better ways to go about it that don’t disincentivise the use of electric vehicles.”

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