10
Nov

Electric vehicle plan puts brake on fuel tax revenue

Scott Morrison’s electric car policy will punch a $2bn hole each year in the federal budget by 2030, prompting demands from the nation’s peak automobile body for the government to explain how the sharp reduction in fuel excise revenue will be offset.

With the Prime Minister predicting there would be 1.7 million electric cars on the road by 2030, the Australian Automobile Association said fuel excise revenue would drop from $13bn a year to below $11bn by 2030.

AAA managing director Michael Bradley said a failure to offset the reductions would lead to lower levels of spending on roads and other transport infrastructure.

Genuine tax reform is needed to ensure revenue is in future collected from all the different vehicles on our roads,” Mr Bradley said. “We need a sustainable revenue model to fund land transport into the future.”

Mr Morrison’s electric vehicle strategy did not outline any measures to offset the reduction in tax revenue, stating instead a “strong economy” would be enough to make up for the shortfall.

But ahead of the 2019 election, Mr Morrison demanded Bill Shorten outline how Labor would make up for the decline in fuel excise revenue under a target for electric vehicles to account for 50 per cent of new car sales by 2030.

He still has not explained what will be the impact of the petrol and diesel excise over the next decade,” Mr Morrison said ahead of the election. “Bill, what is the bill?”

Senior government sources have said the government will not implement road user charges for electric vehicles, despite the measure being pursued in NSW, Victoria and South Australia.

In 2018, Deputy Prime Minister Barnaby Joyce said it was “bleeding obvious” electric vehicle owners must start to pay their way. “You can’t say, ‘I want the roads but I don’t want to pay’,” said Mr Joyce, who was transport minister at the time. Mr Morrison, who in 2019 claimed Labor’s policy for electric vehicles to make up to half of new car sales by 2030 would “end the weekend”, said his plan allowed Australians to make their own choice.

Launching his strategy in Melbourne alongside Liberal MP Katie Allen, who holds the marginal seat of Higgins, he defended his criticism of Mr Shorten’s 2019 policy because it told “everybody what to do”. “I think Australians have had enough of governments telling them what to do. We’ve just been through two years of governments having to tell people what to do … and it’s not something I think Australians want to see more of,” Mr Morrison said.

With fuel excise revenue already down as carmakers produce greener and more efficient cars, Mr Morrison said petrol vehicles would not “shut down and electric vehicles start up the next day”. “I know the one thing that ensures that Australians can rely on the essentials that are provided by the governments is a strong economy. What drives your revenues is that you have an economic plan that sees your economy grow and it sees people in work,” he said.

Anthony Albanese, whose electric vehicle policy exempts electric vehicles from import tariffs and fringe benefits tax, said Labor would not take an electric vehicle target to the election, saying Australians “would make their choice”. “I think people will look at Scott Morrison today and this announcement and just shake their head and say, ‘what’s changed?’,” the Opposition Leader said.

Energy Minister Angus Taylor said Labor’s policy on electric vehicles would have “close to zero impact on prices or uptake”.

Electric Vehicle Council chief Behyad Jafari said the strategy was too little, too late. “We’ve got a government doing the reverse of everyone else. Fuel efficiency standards and rebates have been in place in the rest of the world for over a decade,” Mr Jafari said.

Extracted from The Australian