Australia is taxing consumers who refuse to burn fossil fuels, according to Renew Economy. First, it was the carbon price that was world-leading — then trashed to please those who think climate change is a hoax. Then there was the possibility of introducing fuel efficiency standards — an idea that got trashed as well when the media touted it as a “carbon tax on wheels.” This made Australia “a dumping ground for dirty and expensive cars,” the article pointed out, while emphasizing that those engines are so inefficient that, according to the government’s own estimates, it added around $600 annually to the fuel cost of the average family car, and billions of dollars to the country’s health bill.
— David McLeod (@macrockets) November 23, 2020
Despite the zaniness of trashing these ideas that would have helped the people of Australia, the country has a new, incredibly senseless idea: an EV road user tax.
South Australia and Victoria each announced plans for this new tax, which will add around $500 to the annual cost of owning an EV. In essence, Australia is punishing EV owners for not driving a gas car. New South Wales, the article noted, could follow suit.
The article noted that these two states are both Liberal and Labor and are among the most progressive when it comes to renewable energy policies. If taxing people for not burning fossil fuels is considered progressive, I am genuinely scared of what their version of a regressive policy is.
This is an attack on EVs at the governmental level, and one that the article called a naked revenue grab. The villain in this is an influential lobby group known as Infrastructure Partnerships Australia, which has been promoting the idea of a tax on EVs for several years.
Millionaires Driving Teslas
The IPA “backs its words with evidence and tell the truth no matter how provocative,” according to its website, and even celebrated the Victoria announcement declaring that it was about time “millionaires driving Teslas” paid their fair share of taxes.
“At its heart, this reform is about fairness. It’s not fair that right now a family in a Mazda or Kia is paying to use the roads while a millionaire in an electric Tesla, Porsche or Jaguar gets a free ride,” IPA said in a press release. The organization also acknowledged that EVs play a role in helping the environment, but pointed out that it wasn’t good enough. “While a shift to Electric Vehicles could deliver many environmental and health benefits, they don’t levitate and should be paying to use the roads like everyone else.”
Its claim shows that not only is the organization uneducated about Australia’s fuel excise, which is general revenue only and not used to fund roads, but is also unaware that EVs pay more than their fair share of general revenue through higher GST, stamp duty, and other charges. Also, EV owners are not burning fossil fuels with their cars, not creating emissions that have been scientifically proven on many occasions to be harmful toward our overall health and cost us a fortune.
Renew Economy noted that the IPA knows the largest threat to fuel excise revenue doesn’t come from EVs as much as from non-plug-in hybrids, which actually reduce fuel by around a third. The article noted that the IPA believes that hybrids are a transition vehicle, and aren’t really “worth the bother” even though the “rich people driving Lexus hybrids” are paying a lot less in fuel tax revenue. So, it’s not really about fuel tax for the IPA even though that’s what the group is trying to present.
The Victoria Policy Seems Chaotic At Best
The article pointed out that this policy is not only a complete mess, but there’s no actual way to tell how this tax will be applied. Pure EVs will be hit with a rate of 2.5¢ per km, which is around $500 annually for a car that travels 20,000 km a year. Plug-in hybrids will be hit with a 2¢ km tax. How will the state measure the travel and how will the tax be imposed? The article pointed out that the treasurer’s office stated it wouldn’t answer any of those questions — because it doesn’t have any answers. Also, there hasn’t been any consultation with the EV industry on this new tax.
The Victorian government also admitted that it hadn’t modeled the impact of EV taxes on its net zero emissions target and believes that the new EV tax will not impact purchases of new EVs — but it also didn’t do any modeling on that.
From over here in the US, what it looks like is that Australia has a successful case of harmful lobbying on its hands. Whether you are in the US or Australia, lobbyists rarely, if ever, have a population’s best interests at heart. To them, it’s about money, backroom dealings, and nagging until they get their way. Taxing an EV user by the mile or km is not only senseless; it punishes EV drivers for not burning fossil fuels.