The Australian Government is collaborating with states and territories to implement a road user charge aimed at owners of electric vehicles (EVs). This initiative, confirmed by Federal Treasurer Jim Chalmers, marks a significant step toward adapting transport policies in response to evolving vehicle technologies.
In a joint statement released with state and territory treasurers, the government outlined the broad principles for the proposed road user charge. The statement emphasized the need for reforms as the rapid advancement of electric vehicle technology reshapes both passenger and freight transport. “Reforms to road user charging arrangements for electric vehicles have the potential to bolster productivity through more efficient use of the road network and vehicle fleet,” the statement noted. It also stressed the importance of ensuring that these reforms do not deter the adoption of electric vehicles.
Chalmers reiterated the government’s commitment to collaborating with states and territories, stating they will take the necessary time to ensure the policy is thoroughly developed. The current proposal does not indicate plans to alter the levies applied to combustion-powered vehicle owners, which has drawn criticism from organizations like the Australian Electric Vehicle Association (AEVA). AEVA President Dr. Chris Jones argued, “A universal, mass × distance road user charge, introduced at a low rate, would actually serve the role fuel excise is supposed to play: a user-pays system proportional to impact.”
Dr. Jones further clarified that while EV drivers are open to a charge, they seek a scheme that equitably considers all vehicle types. He mentioned that smaller vehicles should not be penalized regardless of their propulsion system. In contrast, the Australian Automotive Dealer Association (AADA) has advocated for a national road user charging system that is equitable and does not hinder the uptake of hybrid and electric vehicles.
Currently, Australia imposes a fuel excise of 51.6 cents per litre on petrol and diesel, a flat tax that is adjusted with inflation. As more efficient vehicles and EVs gain popularity, the revenue from this excise is projected to decrease. This change has prompted states like Victoria to introduce their own road user charges to mitigate anticipated shortfalls in fuel excise revenue.
In 2021, Victoria implemented its road user charge but faced legal challenges. A High Court ruling in 2023 determined that only the Commonwealth can impose customs and excise duties, leading to the suspension of the Victorian scheme and the refunding of approximately $3.9 million collected from EV and plug-in hybrid owners during the 2022/23 financial year.
Other states, including New South Wales and Western Australia, have indicated intentions to introduce similar charges by 2027. Meanwhile, South Australia initially planned to implement a road user charge but reversed its decision following a change in government.
The Australian Government’s ongoing discussions signal a significant shift in transport policy, as officials seek to balance the need for sustainable funding for road maintenance with the growing adoption of electric vehicles. The outcome of these discussions could shape the future landscape of road user charges in Australia, ensuring that all vehicle owners contribute fairly to the costs associated with road use.
