Car makers, environmental groups blast ‘worst electric vehicle policy in the world’

Leading car makers and environmental groups have branded the Victorian government’s plan to impose a tax on electric vehicles the worst electric vehicle policy in the world.

Volkswagen, Hyundai and Uber have joined 25 organisations, including Environment Victoria and the World Wildlife Fund, in signing a letter that says the tax will mean Victorian drivers will miss out on the most efficient and affordable electric vehicles.

Victoria is set to become the first Australian state to enforce an electric vehicles tax.Credit:

The Andrews government wants to tax electric vehicle drivers, who do not pay fuel excise, 2.5¢ per kilometre to contribute to the cost of maintaining the road network.

Treasurer Tim Pallas has said the excise would put in place a tax infrastructure as electric vehicle uptake grows towards an anticipated 26 per cent of all cars in Australia by 2030.

Treasury forecasts suggest the new tax, the first of its kind in the country, will raise $30 million over four years and will cost the average electric vehicle driver up to $300 a year.

But the letter’s 25 signatories said that no other jurisdiction in the world has introduced such a targeted levy on energy-efficient vehicles without significant incentives to entice drivers to purchase electric cars.

“Most industrialised countries are prioritising incentives for electric vehicles to benefit from cleaner air and new jobs from a growing industry," the letter says.

“This new tax means the world’s manufacturers are far less likely to send Victorians their best, most affordable, zero-emission vehicles.”

Jake Whitehead, a transport expert at the University of Queensland, agreed Victoria’s approach was among the worst.

He described Victoria’s plan as only narrowly better than some of the electric vehicle policies implemented in parts of the mid-west of the United States where governments have a vested interest in fossil fuels.

Victorian Treasurer Tim Pallas said incentives will accompany the tax but has not detailed what they will be.Credit:Paul Jeffers

“It’s one of the worst approaches and it is quite short sighted,” he said.

Mr Whitehead said the government should consider starting with a lower tax rate that increased with sale targets. He also suggested an opt-in approach in exchange for incentives, which would put the onus on the government.

The government has been in negotiations with crossbenchers since it introduced the bill to Parliament last month, when Mr Pallas suggested incentives would accompany the tax package.

The legislation is due to be debated next month, but the government has not detailed what new incentives will be included.

Reason Party MP Fiona Patten will support the tax if the government offers a satisfactory incentives package.Credit:Justin McManus

Labor holds 17 of the 40 seats in the upper house and will need the support of three crossbenchers to pass the bill.

Key crossbencher Fiona Patten wrote to Mr Pallas last week indicating she would support the legislation, but only if the government agreed to include a wide range of incentives to entice the public to purchase electric vehicles.

The Reason Party MP offered six suggestions: investing in infrastructure such as charging stations, stamp duty exemptions, a waiver on registration fees until June 2024, discounts or waivers on road tolls, a $15,000 interest-free loan program to buy electric vehicles or charging infrastructure and converting the government fleet into electric cars.

The open letter against the proposed tax, which will appear in The Age on Thursday, urges crossbench MPs to vote against the bill when it comes before Parliament.

“Every other state and territory in Australia has ruled out or delayed plans for a premature new tax on electric vehicles,” the letter says.

“Going it alone will mean Victoria has the worst electric vehicle policy in the world.”

The letter has also been signed by Doctors for the Environment Australia, the Australian Conservation Foundation and the Clean Energy Council.

Another signatory, Australia’s Electric Vehicle Council – an industry-led group which represents more than 60 companies, including major car makers and all zero-emission vehicles manufacturers – believes the tax will ensure Australia remains at the bottom of the list when it comes to the take-up of electric vehicles.

“Victoria is already massively behind comparable jurisdictions in the US, the UK and across Europe in terms of electric car uptake. This tax will exacerbate the yawning gap,” chief executive Behyad Jafari said.

“Far from being on track to achieving net zero emissions by 2050, emissions from transport are rising in Victoria. This is the wrong time to tax zero emissions vehicles.”

Both Ms Patten and Animal Justice Party MP Andy Meddick – another key crossbencher in negotiations with the government – said they were seeking an incentive package that actively motivated Victorians to take up electric vehicles, rather than one that simply offset the negative connotations of the tax.

Mr Meddick said the road user charge was problematic unless there were substantial incentives for Victorians to make their next car an electric vehicle, including reigniting vehicle manufacturing in Victoria.

”A key to uptake will be diversity of vehicle models and price points and Victoria has the opportunity to lead the charge,” Mr Meddick said.

The Age can also reveal that Mr Pallas has been negotiating with Tesla and Nissan, who did not sign the open letter, on how to make their electric models more accessible in Victoria.

Addressing the letter’s criticism, the Treasurer said a tax was necessary because electric cars were destined to dominate motorways in the future given “they’ll always be more economical to run” and price parity with petrol cars was predicted to arrive by the mid 2020s.

“This reform is geared towards the long term and that’s why we’re acting now,” he said.

Greens leader Samantha Ratnam cannot be convinced to support the tax, which her party says sends the wrong message to the public. Their opposition means that even if the government is able to sway Ms Patten and Mr Meddick, they must secure the support of at least one other MP.

Transport Matters MP Rod Barton, a former taxi driver, previously suggested a proposal that taxis and ride-share vehicles receive bonuses for converting to electric.

It’s expected Mr Pallas will present the government’s final incentive package as the bill moves to the upper house when Parliament resumes on May 4.

Start your day informed

Our Morning Edition newsletter is a curated guide to the most important and interesting stories, analysis and insights. Sign up here.

Most Viewed in Politics

From our partners

Source: Read Full Article