Taxing electric cars 'mad': NSW minister

·2-min read

Almost half of new car purchases should be electric vehicles before consumers are taxed on those cars, the NSW transport minister says.

Governments across Australia are worried about losing out on fuel excise revenue as more consumers turn to electric vehicles, but they also don't want to discourage broader take-up of the more environmentally friendly option.

Transport Minister Andrew Constance said on Wednesday that it was "crazy" that the first discussion in Australia around electric vehicles was about taxing them.

"We should not introduce a road user charge any time soon," he told reporters.

"We should be at a 40 to 50 per cent penetration in the new car market before we go introducing a charge."

Victoria and South Australia have moved to impose taxes on electric vehicles, but critics say a tax will stifle take-up and innovation.

Mr Constance was forced to shelter on a beach as his south coast home town went up in flames in the terrible bushfire season of 2019-2020.

He said on Wednesday his experience had made him believe that politicians spend too much energy debating climate change and not enough energy on innovation.

He described a "cocktail of toxic gases" in the Sydney basin that he said was poisoning kids and those with respiratory illnesses.

"I think it's mad to go and tax an early uptake of an innovation that we know will save community health and save our environment," he said.

But the minister said nobody would begrudge the government eventually imposing a charge to support road infrastructure.

He told the Sydney Morning Herald that incentives such as subsidised car parks, access to transit lanes usually reserved for buses and taxis, and a waiver of stamp duty should come first.

Mr Constance's comments are out of sync with those made by NSW Treasurer Dominic Perrottet, who has foreshadowed a "holistic" tax plan for electric vehicles in next month's state budget.

Mr Constance said the two men had been talking about the issue privately, and he would continue to make his views known privately as well as publicly.

Electric Vehicle Council chief executive Behyad Jafari welcomed the minister's sentiment.

He said holding off on imposing a tax was a win-win situation.

"Why not encourage more electric vehicles on our roads and if we charge them when they're more common then of course we'll make more money," Mr Jafari said.

Battery-run cars made up only 0.7 per cent of sales last year, making Australia a laggard among its peers. Electric cars were 10 per cent of sales in the EU and the UK and 8.1 per cent in California in the same period.

NSW was responsible for about one-third of electric vehicle purchases in Australia, Mr Jafari said.

Mr Jafari trumpeted the attractions of a broader take-up in NSW, including a "once-in-a-lifetime opportunity" to create more jobs for the state.