Victoria’s ridiculous tax on Electric Vehicles has passed, starts July 1st 2021

Today, Victoria’s Legislative Assembly debated the merits of the ‘Zero and Low Emission Vehicle Distance-based Charge Bill 2021’. This bill is more commonly known as the EVTax.

The bill has now passed both houses after being committed and passed without amendment.

Despite much opposition to the EV tax, it is now set to come into effect from July 1st, 2021. The new EV tax will see 2 different per kilometre rates depending on characteristics of the vehicle.

  • 2.5 cents for electric vehicles and hydrogen vehicles;
  • 2.0 cents for plug-in hybrid vehicles

Here’s the kicker, the price will be varied in line with indexation, meaning it’ll go up over time, varied each financial year.

If you’re the owner of a Zero or Low Emission Vehicle (ZLEV), then you will be required to lodge an initial declaration that will be used to calculate the distance travelled of the coming months and years. This needs to be submitted within 14 days of the July 1st start date.

This needs to be in the form of an odometer reading, including evidence (i.e. a photo) at the time the declaration is lodged. This photo is information is to be provided to the secretary of the department of transport Victoria, who is currently Paul Younis.

After submitting your second reading, the Secretary will determine the amount of the ZLEV you need to pay and send you an invoice for the EV tax. The Secretary will calculate the distance travelled by the ZLEV in that period (some may opt for monthly/quarterly) and subtracting from that the distance travelled by the ZLEV during that period that was not on specified roads.

Here in lies one of the big issues with a state-based road usage charge. As someone from the regional city of Albury Wodonga, we have lots of people who live in VIC and work in NSW. This means you’ll clock up thousands of km per year on NSW roads, but be paying the VIC Government a tax for it. Clearly that’s wrong and it leaves the individual or business to track where they drove. This evidence of odometer readings and essentially a log of where you’ve been, are required to be kept for up to 5 years.

In a connected car like a Tesla Model 3, it would be possible to have the vehicle track the state in which the kilometers were driven and provide the exact number to the driver for submission, had the Government worked with electric vehicle manufacturers. Without that, the whole system is very manual.

If you drive an EV in Victoria and don’t submit a reading, or fail to pay your invoice for the EV tax, the Victorian Government can suspend your registration. If you are late on payment, you can also be charged interest on the balance.

What’s crazy about the EV tax, is that it was proposed as a solution to what will ultimately be a diminishing revenue from the current unleaded petrol and diesel excise that currently stands at 38.12 cents per litre. As more owners chose electric vehicles, there will be less tax going to the Government. Proponents of the tax argued that this money is spent on maintaining the roads, but that’s not actually true.

The Federal Government collects the fuel excise and GST and provides states with grants for road projects. At the local level Local Government fund road works in towns and cities, which can be collected via rates paid by home owners.

Having a systemic hole in a budget is a problem and a road user charge can seem a fairer technique to pay for existing road maintenance and new roads, however, it seems the motivation behind this tax is to bring in a new source of income for a State Government, that has absolutely no requirement to use this revenue on roads.

Introducing a tax on electric vehicles that reduce our emissions and help us achieve our state and national environmental objectives, should be encouraged, not taxed. In Australia, less than 1% of all new vehicles sold are electric, as prices remain high and vehicle choices remain limited.

Range of vehicles is increasing as battery tech improves, as is the story on recharging locations, but our transition to electric vehicles doesn’t happen automatically. Recently the Victorian Government began offering $3,000 rebates to up to 20,000 electric vehicle purchasers, so an EV tax seems to work against that incentive.

It is important to understand this EV Tax is here to stay for decades, while the rebate scheme is limited for the short term.

It is expected the average EV owner will pay around A$3-400 based on average km driven per year. It is worth remembering that distance charging isn’t necessarily fair. If we decide to go on a road trip on the weekend, or a holiday with the family, sure that’s optional travel, but if you bought a place 45 minutes out of the city, because that’s all you could afford, then you’ll pay more as you have to travel further every day and every year.

Obviously with the adoption of EVs in Australia being so low, it’s politically opportunistic to introduce this new revenue stream now, before there’s a higher percentage of EV owners that could vote differently at the next election.

This EV tax will be watched closely around the world, as others attempt to copy it.

Extracted from Tech AU

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