The federal government is well aware of the looming revenue hit linked to this shift. It currently collects 42.3 cents for every litre of petrol sold at the pump. According to the federal budget,this financial year it is expecting to rake in about $5.9 billion worth of petrol excise.
Earlier this year Mr Frydenberg told a business breakfast in Melbourne that fuel excise was a “big revenue earner” for the government.
“It’s how we fund infrastructure,” he said. “So the rise of electric cars ... will impact both our tax bases and we’ve got to think about that.”
Mr Frydenberg toldThe Agethe federal government was encouraging the uptake of electric vehicles through the first national Future Fuels and Vehicles Strategy.
”The expanded $250 million Future Fuels Fund will be key to rolling out infrastructure across urban and regional Australia to drive the uptake of EVs including through public electric vehicle charging and hydrogen refuelling infrastructure.
“Through the Council on Federal Financial Relations,the Government will continue to work with States and Territories on ensuring that policy settings across the Federation support the continued uptake of EVs.”
Motoring and automotive industry groups have long pleaded with the federal government to step in to avoid a hotchpotch of state-based taxes and levies on electric cars by introducing a uniform national system of road user charges to replace fuel excise.
Up until 1997,Victoria and other states charged their own fuel franchise fees. But that was derailed by a High Court challenge that suggested the practice was unconstitutional,with the Commonwealth responsible for charging excise.
As a consequence,the former Howard government stepped in to collect fuel excise,promising to return the money to the states for roads.
But Mr Pallas said the states had been getting only about one-quarter of the fuel excise collected by the Commonwealth.
“It is a distorted tax,where the people who build the roads and manage the road network are getting very little of the revenue back,” he said.
“So we are moving towards a system where we will need to have a revenue stream for the purpose of maintenance of road usage and from the[state] government’s perspective that is only fair. You can’t have all the burden for road usage falling on an ever-diminishing share of the market,being every other internal combustion engine user.”
In September this year,two electric vehicle drivers launched aHigh Court legal challenge against Victoria,arguing it lacked the constitutional power to tax drivers with a road-user charge.
That followed claims by a group of 25 carmakers,industry groups,infrastructure companies and environmental groups that Victoria’s electric vehicle policy ranked as “the worst in the world”.
Victoria’s electric vehicle tax is initially expected to raise relatively little revenue - about $10 million a year. Mr Pallas said that was more than offset by state subsidies of up to $3000 for people who purchased electric vehicles.
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