EV Tax Delay to 2027 Welcomed but Small, Temporary Incentive Falls Short

The South Australian Government’s decision to delay its EV Tax until 2027 is welcome but the small, temporary EV incentive revealed today is insufficient to facilitate the rapid transition to zero emissions cars that our state needs, The Australia Institute says.

Key points:

  • As it stands, the 6000 one-off purchase incentives offered represent just 0.4% of the 1.48 million vehicles registered in SA.
  • A South Australian package that was scaled by population to match New South Wales’ recently announced EV policy would deliver $107m in funding, instead of the $36 million on offer.
  • Australia Institute research shows seven in 10 South Australians (69%) will be less likely to purchase an EV once the tax is introduced.
  • If introduced, the EV Tax would cost the average South Australian driver over $300 per year, in today’s dollars.

“A small, temporary incentive slapped on top of a permanent tax on an essential weapon in the fight against climate change just doesn’t cut it. You can’t fatten the pig on market day, but that looks to be exactly what the government is attempting to do here with its deeply unpopular EV Tax legislation,” said Noah Schultz-Byard, SA Director at The Australia Institute.

“Delaying the start date for the EV Tax to either 2027 or when EVs make up 30% of new car sales is a welcome move, but the latest IPCC report shows that the climate crisis will not be solved in the next few years.

“We are in the midst of a climate emergency and South Australia is already lagging badly behind the rest of the world when it comes to reducing carbon emissions from our transport sector. More needs to be done to support a rapid switch to EVs.

“It is a simple policy principle that you tax the things you want less of and provide meaningful incentives to support the things that you want more of. The EV Tax gets this principle all wrong and the incentive offered, which is very small when compared to the New South Wales policy, doesn’t change that fact.

“The Marshall Government had an opportunity to follow the lead of their Liberal Party counterparts in New South Wales on this policy by permanently abolishing the inefficient tax of stamp duty on EVs and replacing it with a Road User Charge. Unfortunately, this package falls short of the mark and will not bring about the EV transition that we need in SA.”

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