Victoria passes Electric Vehicles tax amid mixed opinions

Photo by Waldemar Brandt on Unsplash

On Wednesday, the Victorian Parliament’s upper house passed the ‘Zero and Low Emission Vehicle Distance-based Charge Bill 2021′, more commonly known as the EVTax.

The controversial bill, introduced by Victoria Treasurer Tim Pallas in March this year, has now passed both houses without amendments.

Set to come into effect from July 1st, 2021, EVTax will place a standalone tax on electric vehicles per kilometre rates depending on characteristics of the vehicle: 2.5 cents for electric vehicles and hydrogen vehicles and 2.0 cents for plug-in hybrid vehicles.

The rates will be varied from one financial year to another, depending on  the consumer price index for Melbourne during the period and the rate of the ZLEV charge for the previous financial year.

Infrastructure Partnerships Australia has called the bill a victory and a way to “future-proof road funding” for Victoria, with Infrastructure Partnerships Australia Chief Executive Adrian Dwyer encouraging New South Wales Government to follow suit.

“Victoria has now married Australia’s best EV policy with world leading funding reform,” Dwyer said.

“Victoria is knocking down barriers to EV ownership by delivering more than $3 in support for every dollar raised from their road user charge.”

Meanwhile, the Australian Electric Vehicle Association (AEVA) has slammed the bill as a “ham-fisted rush-job.”

The bill, as AEVA National Secretary Chris Jones commented, “has missed many opportunities to truly reform transport and mobility funding and improve how Victorians move around.”

“Instead we have a system which not only penalises zero emission drivers, it doesn’t delineate between the mass of the vehicle and therefore its efficiency. Worst of all, not one word of the legislation describes what the revenue is to be spent on. In the selling of this Act, we were told it was to be spent on roads and transport infrastructure but it’s clearly just another revenue stream,” Jones told Roads & Infrastructure.

The Greens have also slammed the vehicle tax, saying it undermines climate action.

“Labor’s EV tax comes at a time when transport is our biggest growing source of emissions in Victoria and we are lagging behind the rest of the world in the uptake of electric vehicles,” a Greens statement said.

The AEVA is calling for the legislation to be amended “as soon as possible” to include all road going vehicles.

The Association is also suggesting the bill should include a mass multiplier to account for proportional damage to the roads and to discourage needlessly heavy passenger vehicles.

Among the requirements of the bill, owners of a Zero or Low Emission Vehicle (ZLEV) are 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.

Recently, the Victorian Government announced $3,000 rebates to up to 20,000 electric vehicle purchases under $69,000, as part of a $100-million plan to encourage electric vehicle use. The new tax is now being seen as a contrast to that ambition.

At least 75 per cent of new car sales need to be electric by 2030 to help Australia achieve net zero emissions by 2035, according to modelling by Climate Council.

Based on figures from the Electric Vehicle Council, in 2020 there were 6,900 electric cars sold in Australia, a 2.7 per cent increase from the 6,718 sold in 2019. The 2020 figures show electric cars accounting for 0.7 per cent of total Australian car sales.



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