News, Regulations , ,

POTENTIAL breaches of the Australian constitution has catapulted the Victorian government into a legal stoush with the federal government over its controversial electric-vehicle tax.

The challenge was sparked by two Victorian EV owners – Kathleen Davies and Chris Vanderstock – who in September last year launched a High Court action to stop the state government introducing a tax.

In their case, they argued on constitutional grounds that the state government had no authority to apply a tax that was the domain of the federal government on the grounds it was unconstitutional.

The federal government agrees. This week it joined with the two complainants as Attorney-General Mark Dreyfus filed an intervention in the High Court.

A spokesman for Attorney-General Dreyfus was reported in the Age newspaper as saying the federal government had a case based on “potential implications for long-standing constitutional principles in relation to revenue and economic policy”.

They argue that because the charge is an excise, it can only be implemented at a federal level. It has been reported by The Age that the action by Ms Davies and Mr Vanderstock is supported financially by 629 crowdfunders.

The federal government collects about $12 billion a year from motorists in the form of the fuel excise (less at the moment after the previous government halved the excise until September 2022). This is then distributed to the states.

Success in the High Court by the two motorists and/or the federal government has huge implications for the financial position of Victoria, and other states including NSW, Western Australia and South Australia that have already proposed a tax from 2027.

The federal government is aiming to retain control of income generated from motor vehicles, particularly maintaining revenue from fuel excise. This excise is set to diminish as EVs begin to replace internal-combustion engine (ICE) vehicles.

It cannot afford to let state governments take over control of the income from motorists.

The Victorian government receives 2.6 cents per kilometre as a road-user charge from EVs and hydrogen fuel-cell vehicle owners. 

This is promoted as replacing the income from the fuel excise (now 22.1c/litre but 44.2c/litre from September) but is in fact an additional tax as fuel excise is paid to the federal, not state, government. Note that plug-in hybrid vehicle (PHEV) owners in Victoria pay both the EV tax and the fuel excise.

The Australian Automotive Dealers Association (AADA) told GoAutoNews Premium that it was not surprised that the federal government had decided to intervene in this landmark court case. 

“This challenge goes to the very heart of the question on whether state governments are within their rights to implement a road user charge and the outcome of this case will have serious and lasting implications for how motorists are charged,” said AADA CEO James Voortman.

“The way we currently charge motorists for the use of their vehicle is a national approach through the fuel excise regime.

“Now we need to consider how electric vehicles are charged in the future, but we feel strongly that there should be a national approach led by the federal government.”

Mr Voortman said “the last thing we need is every state and territory in the Commonwealth having their own usage charge, their own method for calculation and their own commencement date.”

“Only a national approach to this issue will bring Australian motorists the consistent and efficient road user charging system they deserve,” he said.

By Neil Dowling

Manheim
Manheim
Gumtree
Manheim
AdTorque Edge
PitcherPartners
MotorOne
Gumtree
DealerCell
Schmick