The Australian Government’s mooted plans to introduce a road user charge for EVs have been put on hold for now, amid a desire to get more motorists behind the wheel of electrified cars.
Last year, federal Treasurer Jim Chalmers raised the prospect of implementing a national road user charge, which would see motorists driving EVs taxed a certain amount for every kilometre they drive.
This would be intended to help plug the hole in the fuel excise tax, which brings in up to $18 billion of annual revenue, but is expected to decrease as Australian motorists purchase more fuel efficient vehicles.
While the current conflict in the Middle East has seen the government halve the fuel excise from 52.6 cents per litre to 26.3 cents per litre to ease prices at the pump, a record number of sales for EVs, plug-in hybrids (PHEVs) and hybrids has led to a downturn in the amount of new petrol and diesel cars leaving showrooms.
However, speaking on the ABC’s Insiders program, Transport Minister Catherine King said the prospect of an EV road user charge is effectively on hold, with the government instead wanting to help drive people towards purchasing more fuel-efficient vehicles.
“At the moment we’re trying to encourage as much electric vehicle uptake as we possibly can, we don’t want to disincentivise that at all, so there is a balance to be struck here,” Minister King said.
“We want to try and not disincentivise electric vehicle uptake, particularly right at the moment when we are seeing such a surge in that, so it may not be the time for it right now.
“[And] it’s obviously going to have to be legislated through the parliament, and I’m not clear that there’s a pathway for it through the parliament at this stage. We’ll wait and see.”
Australia has seen road user charges before, but only at a state level.
Victoria introduced a road user charge for EVs and PHEVs in mid-2021, starting out at 2.5 cents per kilometre for EVs and 2.0 cents per litre for PHEVs, before rising to 2.8 and 2.5 respectively.
The charge was criticised at the time, not only for its awkward rollout but for effectively double charging PHEV owners, who still needed to pay the fuel excise but were slugged with an additional charge.
It was later repealed in 2023 after the High Court found the road user charge scheme was deemed unconstitutional, resulting in the Victorian Government paying back the revenue it collected.
While New South Wales, South Australia and Western Australia had all also announced plans to introduce a road user charge, none have eventuated.
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