South Australia’s EV tax smashed by Opposition, but NSW keen to follow suit

South Australia’s disastrous and illogical road tax on electric vehicles looks set to be defeated in the state’s Parliament after the Labor opposition vowed to block it, with help from the minor parties. But that has not stopped NSW from floating a similar idea.

It seems that South Australian Labor agrees with the State treasurer Rob Lucas’ description of the tax as a “no brainer”, as in only someone with no brains would suggest discouraging people from shifting to electric vehicles by putting a special tax on every kilometre they drive.

Labor called the move a dangerous precedent, with state Labor leader Peter Malinauskas ranting: “We should be striving to be a national leader when it comes to electric cars, which would benefit our economy and our environment,” he said.

“Instead, (state premier) Steven Marshall is whacking a new tax on electric cars, which will slam the brakes on the growing market here in South Australia.”

The proposed tax had already received plenty of strident criticism from the motor vehicle industry and people who believe that climate change is real, as well as academics and commentators. 

The Federal Chamber of Automotive Industries (FCAI) was also quick to add its criticism, and did so again yesterday in response to the NSW Government mooting a similar road-user-charging plan for electric vehicles.

Tony Weber, chief executive of the FCAI, said the latest announcement from NSW showed just how far behind some Australian states are when it came to encouraging environmentally friendly initiatives.

“All around the world, global automotive companies have invested billions of dollars to develop environmentally friendly vehicles,” Weber said.

“And all around the world, progressive governments have supported the introduction of these vehicles.

“But here in Australia, we inhibit their introduction by levying extra charges on them.  It simply beggars belief at this early stage of electric vehicle introduction.”

South Australian treasurer Rob Lucas unveiled his State’s proposed tax earlier in the week, calling it a “no brainer” because EVs do not pay fuel excise.

It has been pointed out that this reasoning is flawed because fuel excise does not specifically get spent on roads and infrastructure for cars, it goes into general revenue.

As do the extra costs that EV buyers pay for their vehicles, including higher purchase prices, stamp duty, luxury car tax and the GST that comes on the electricity they use to charge their vehicles.

Electric Vehicle Council chief executive Behyad Jafari was also quick to criticise the NSW position.

“No other jurisdiction in the world – aside from the South Australian Coalition Government this week – has thought it sensible to apply a special new tax to electric vehicles,” Jafari said.

“Yes, in the long run governments won’t be receiving as much in fuel excise as people drive more efficient vehicles. But that’s a good thing. Burning less foreign oil in our cars is good for our city air, it’s good for our health, it’s good for our climate, and it’s good for our economic sovereignty.

“The money paid in fuel excise doesn’t get quarantined for roads. That’s a myth. If tax is dwindling from one area, governments don’t have to make it up from that same area. That would be like whacking a new tax on nicotine gum because you’re worried about a drop in the tobacco excise. It’s madness.

“One day, when electric vehicles start becoming common place, the time may come to consider new taxes. But at this point in our history, when we should be doing everything possible to encourage people to switch to electric vehicles, this tax would be pure poison.

“Of all the jurisdictions in the world New South Wales would have to be one of the last who should worry about the speed of EV uptake. New South Wales is already languishing up the back of the pack in the global race toward electric vehicles. Mr Perrottet now wants to blow out our tyres.”