Australia is closer than it has been to charging electric vehicle drivers by the kilometre, and the pressure is coming from the revenue side rather than the road side. ABC's 7.30 reports that from July next year, EV drivers in New South Wales will pay a road user charge of almost 3 cents per kilometre in place of fuel excise. The federal government has just reinstated the full fuel excise of 53.7 cents per litre after a four month reprieve, and according to the report that excise raises around $15 billion a year, a figure that shrinks with every EV sold. The report says electric and plug in hybrid vehicles made up almost a third of sales in the June quarter, while internal combustion sales have slumped to barely half the market.
There is a constitutional history behind why this argument keeps landing back at the federal level. In October 2023, in Vanderstock v Victoria, the High Court of Australia ruled by a four to three majority that Victoria's distance based charge on zero and low emission vehicles was invalid, on the basis that it amounted to a duty of excise, which the Constitution reserves to the Commonwealth. Legal commentary published after the judgment read the decision as shifting responsibility for any road user charge on EVs to the federal parliament. The 7.30 report does not address how the New South Wales scheme is structured or how it sits alongside that ruling, and nexusEVnews has not reviewed the state legislation. What the judgment does explain is why a national scheme keeps returning to the agenda, and why the Sydney driver interviewed in the report objects less to paying than to paying while drivers in other states do not.
The report puts numbers on both sides of the argument. It says petrol and diesel owners pay an average of about $1,400 a year in fuel excise, which works out at several cents per kilometre. Professor Simon Jackman, who led a survey of 3,000 drivers for the Electric Vehicle Council, tells the programme that adding a tax on top of existing concerns about range and charging was enough to dissuade three in ten likely EV buyers, and argues that any charge should arrive slowly and account for the wider benefits of EVs. The report says the federal push has stalled since the war in the Middle East pushed fuel prices up, citing the view that the government does not want to discourage EV uptake while sales are surging, and reporting that Catherine King, the minister responsible, does not believe there is sufficient Senate support. It notes the minister declined its invitation to speak, and that a spokesman said fair and future proofed road funding should be a priority across parliament. The Greens are quoted rejecting a charge on EV drivers while the diesel fuel rebate for mining companies stands. The report also follows a driver in western Sydney who covers close to 100 km a day commuting, charges from a home solar battery, and says the arrangement saves him around three to four thousand dollars a year. He has signed a petition against the state charge organised by EV Drivers Australia, and says he would accept a federal scheme because it would apply to everyone.
Bottom line: the case for a road user charge is sound and the timing is awkward, which is the honest version of what almost everyone in this report is saying. Roads have to be paid for, and a fuel tax on a shrinking fuel base is not a plan. But a per kilometre charge that applies in two states and not the rest is not a road funding policy, it is a penalty for a postcode. Do it nationally, phase it in slowly, and publish the number years before it starts. Do it state by state and it will keep costing more in deterred sales than it collects in revenue.
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