AAA Supports Electric Vehicle Usage Tax

Electric vehicle tax - Australia

Image: stux

A poll commissioned by the Australian Automobile Association indicates the majority of Australian drivers support an electric vehicle usage fee or tax – and so does the AAA.

Australians currently pay a fuel excise tax of 41.8c per litre of petrol or diesel they buy. Fuel excise is the largest source of road-related revenue, around  $18 billion a year before excise rebates. Australian EV owners of course bypass this tax, using the mains grid and home solar systems for electric car charging.

Fuel excise revenue has been dropping and increased uptake of electric vehicles will put more downwards pressure on how much is collected in the years ahead. It’s a situation that hasn’t escaped the notice of Australia’s ICE (internal combustion engine) vehicle owners.

The Australian Automobile Association describes itself as the peak organisation for Australia’s motoring clubs and their 8 million members. It commissioned a survey of 1,500 Australians that found 76 per cent of respondents believe owners of electric vehicles should be financially contributing to transport infrastructure. Almost half believed it’s “unfair” EV owners avoid paying fuel excise.

In an interview on 2GB yesterday, Automobile Association of Australia Managing Director Michael Bradley suggested electric vehicle owners should be brought into the road use tax system sooner rather than later.

“I think what the AAA and motoring clubs want is a situation in which we can bring electric vehicles into the tax system in a sustainable way and do so in a way that doesn’t disincentivize their uptake in Australia,” he said.

Mr. Bradley said he didn’t want to see a heavy-handed tax on technology, but the money needs to be there for public transport and roads in the future. He has suggested a “discounted rate” for electric vehicles; but what that rate might be and how it would be applied wasn’t detailed.

The full 2GB interview can be found here.

Australia’s Fuel Excise Tax And Roads

If an electric vehicle usage tax/fee was to be introduced expressly for the purpose of contributing to road infrastructure funding, it would have to be pretty low to be fair.

An important point when considering such a scheme is the proportion of fuel excise tax that actually goes towards financing road infrastructure. Last year, SQ’s Ronald wrote on the controversial topic of electric vehicle subsidies and mentioned:

“Australia already has a hefty incentive for people to go electric and that’s the 40 cent per litre fuel excise on petrol and diesel.  Of this about 10 cents goes to pay for roads with 30 cents going into general revenue.”

Just 10c – or thereabouts.

Ronald also detailed the savings electric vehicles can bring to Australia, and not just their owners. He estimated just the environmental and health costs associated with emissions from petrol and diesel at around 84 cents per litre, so far more than the fuel excise collects.

So, it seems EV owners may already be paying their way by not burning a fuel that causes environmental havoc and human misery; both of which will have an increasingly hefty financial cost to Australian taxpayers.

With electric cars still pretty pricey in Australia (for now) and any signal of an EV usage tax – whether it goes ahead or not – potentially acting as a disincentive to uptake, perhaps supporters of such a move should be mentioning these points when discussing.

About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.

Comments

  1. Shit!! Now THERE’S a surprise!!
    Has anyone else ever wondered what would happen if the Great Unwashed simply refused to pay taxes? Not that Australians have that sort of imagination or guts: but a recurring thought.

  2. Patrick Comerford says

    Well they would say that wouldn’t they. This completely opaque survey makes claims that drivers who drive polluting ICE powered cars think that EV drivers should pay more. Yeah right, show me an Aussie who doesn’t think someone else should pay more and they should pay less.

  3. At the same time introduce a pollution tax. That’d be fair.
    Or, I will gladly pay 10 cents a litre of petrol I use when I buy my EV…
    It would have to be levied on vehicle registration, how else? Cant be levied on the power because that would result in way higher power prices than we already pay, and trap non-vehicle owners.
    I am sure our ever benevolent government will think of a “fair” way…
    What we are seeing is the beginnings of a fierce battle, between us – the ones that want the planet to sustain all living things, and the oil companies et al, who can see the end of their gravy train.
    They wont give up easily.

  4. Keith Heale says

    What the country needs is not an EV tax, but a price on carbon. It’s CO2 (and other greenhouse gas) emissions which should be taxed. It’s past time for the Federal Government to spell out a policy for accelerating a transition away from relying on fossil fuels for transport. Dangling the possibility of an extra tax will have the opposite effect. At present Australia is critically dependent on oil imports (about $30B per year I’m told) and the country has less than four weeks’ reserves yet our government will do nothing to reduce our dependence.

    • Geoff Miell says

      Keith Heale,
      You state:

      “At present Australia is critically dependent on oil imports (about $30B per year I’m told)…”

      I’m wondering who told you that? Do you have a link?

      Per AFR article headlined “Could Australia run out of fuel?” by Lisa Murray, dated Jun 14, it includes:

      “”Australia’s net imports of refined petroleum hit $US13.8 billion in 2017, up from $US10.3 billion in 2016 – and higher than any other country in Asia,” points out Herve Lemahieu, the director of Lowy’s Asian Power and Diplomacy Program.”
      See: https://www.afr.com/companies/energy/could-australia-run-out-of-fuel-20190612-p51wwv

      Today’s exchange: US$1 = AU$1.46
      Therefore US$13.8 billion = AU$20.09 billion in 2017 (at today’s exchange rate).

      I’m a little suspicious it would be as high as $30 billion as you suggest.

      Australian fuel stock holdings (from 2010 to Jan 2019) have been plotted here:
      https://crudeoilpeak.info/australian-fuel-security-review-ignores-peak-oil-in-china-2015-part-1

  5. BEV
    Max Range 400 Km
    Max kWh 65
    FIT 0.0700c [loss of opportunity cost self generation solar + storage]
    Charge Range 10% Min 80% Max
    Battery Charge 45.50 kWh
    Range 280 Km
    kWh per 100 Km 16.25
    Cost per 100 Km $1.14
    Road User Tax $2.76 [based on ICE 6L per 100K]
    Cost per 100Km $3.90
    Cost per Km 0.0390

    ICE
    Price per Litre $1.659
    Litres per 100K 6
    Fuel Cost $9.95 per 100 Km [including fuel excise $2.76]
    Cost per Km 0.0995

    Fuel cost difference 15,000 Km per annum
    BEV including the equivalent of the Fuel Excise $585.00
    ICE including the Fuel Excise $0.418 plus 10% GST 0.460 Litre $1,492.50

    Cost of fuel advantage BEV 907.50 PA.

    The number of registered vehicles in the Australian fleet 17M. Lets say the BEV fleet is 10% of registered vehicles traveling on average 15,000 Km per annum / 100 * 2.76 * 1.7M = $703.8M lost Fuel Tax Revenue PA.

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