Vic electric vehicle tax passes parliament

·3-min read

Victoria will become the first state in Australia to tax electric vehicle drivers after controversial legislation passed parliament.

The Andrews government's electric vehicle tax passed without amendment in the upper house on Tuesday night, paving the way for drivers to be charged 2.5 cents for every kilometre travelled on the state's roads from July 1.

The Victorian Greens vehemently opposed the bill but it passed 19-14, with Labor securing the support of Animal Justice Party MP Andy Meddick, Reason Party MP Fiona Patten and Justice Party MPs Stuart Grimley and Tania Maxwell and

"We know that the transition to electric is critical in our goal to reduce emissions and mitigate climate change," said Transport Matters MP Rod Barton, who also voted in favour of the bill.

"However, electric vehicles will still use roads and we will still need to keep paying for them."

Greens MP Sam Hibbins said the tax would make Victoria a "global laughing stock" and ensure the state continues to lag in the uptake of electric vehicles.

"This is climate vandalism in the midst of a climate crisis," the party's transport spokesman said.

"This was a big test for the upper house, and they failed. Rather than stand on the side of climate action and the Victorian people, they decided to roll over and stand for nothing."

An alliance of 25 car manufacturers and environmental groups had also written to MPs urging them to vote against the plan.

The letter, signed by Hyundai, Volkswagen, Uber, the Electric Vehicles Council and the Australia Institute among others, described the tax as the "worst electric vehicle policy in the world".

The tax is expected to raise $30 million over four years and is forecast to cost the average electric vehicle owner between $260 and $300 annually.

Electric vehicle owners will need to keep a logbook of their travels for five years and could face charges if they fail to produce records.

Treasurer Tim Pallas said he was pleased the tax had passed parliament.

He described it as "modest", at about half the rate of what other vehicle owners pay through the fuel excise.

"This is about fairness, about making sure that everybody pays for the use of the road, but it's also about realising that electric vehicle uptake will be very substantial going forward," Mr Pallas told reporters outside parliament on Wednesday.

Less than one per cent of Australian vehicles are electric, but the treasurer anticipates uptake will grow as they reach price parity with petrol cars by 2025.

"All the big manufacturers around the world are effectively cutting off their research into the internal combustion engine, that means that we will see increasingly electric vehicles becoming predominant on our road network," Mr Pallas said.

He said the state government had also spent $100 million to support the uptake of electric vehicles.

Opposition Leader Michael O'Brien said it made "no sense" to subsidise electric vehicles while also imposing a "big new tax" on them.

"It's like putting on the heater and the air conditioning at the same time," he said.

"This government is more interested in raising revenue than they are supporting the environment or promoting the uptake of electric vehicles."

South Australia was the first state to announce its intention to introduce a user charge on electric vehicles, but has put the plans on hold until July 1, 2022.

NSW Treasurer Dominic Perrottet has foreshadowed a "holistic" tax plan for electric vehicles in next month's state budget.

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