Under the Freedom of Information Act 1982, I have obtained written evidence that Victoria’s now defunct Zero Emission Levy on Hybrid and Electric Vehicles raised more than $5 Million dollars.
The Victorian Government introduced the Zero and Low Emission Vehicle (ZLEV) road-user charge on 1 July 2021, after announcing its intention to do so, in the 2020-21 State Budget. The tax was a distance-based charge that applied to electric vehicles, and plug-in hybrid electric vehicles.
On June 29th, I submitted an FOI request for details on the ZLEV, today, some 158 days later, I finally received information from the Department of Transport and Planning.
This enables me to reveal that from August 2021, until August 8th 2023, just over 2 years, Victoria’s EV Tax has raised more than $5 Million dollars.
ZLEV – EV vs Hybrid
Having analysed the figures, I can share with you that Electric Vehicle owners slugged the vast majority of the ZLEV fee, accounting for 79% of the income raised, a massive $4,015,372.82.
When the charges were introduced, the road user charge cost 2.5 cents per kilometre driven, however, this later increased to 2.8 cents/km, while plug-in hybrids were charged at a rate of 2.3 cents per km.
Hybrid vehicles were still quite popular and raised $1,061,305.98, accounting for 21% of the tax raised.
The system worked by having owners submit photographic evidence of their vehicle’s odometer at the time registration was due. The fee was then calculated and you would receive a fee for the ZLEV to pay on top of your standard registration. For most, the charge was a few hundred dollars, but others who travel a lot were slugged with bigger bills.
Being the only state in the country to charge a tax to EV and hybrid owners, this often meant those who drove interstate were using the roads of NSW or South Australia and paying Victoria to do so. Technically there was an option to keep a log book and claim an exception, but speaking to many EV owners, many didn’t bother.
ZLEV – Year on Year
If we look at the split of the ZLEV income raised per year since its introduction, Victoria’s EV Tax raised $1.18 Million in the first year (2022), followed by an explosion to $3.88 Million in 2023. This growth in income from the tax is a result of EV adoption increasing, despite the tax placing a disincentive for EV owners.
For much of the time the ZLEV was in place, Victoria also offered a $3,000 subsidy off the price of an EV, along with a number of other incentives around renewable energy. There were subsidies and interest-free loans on offer for Victorians who added solar to their roof, battery storage to their garage, and upgraded their cooking and heating appliances from gas to electric, all to meet the state’s net-zero objectives.
Victoria’s $5M+ State Budget Black Hole
On October 18th, we learned the High Court of Australia overturned Victoria’s state-based road user charge (the ZLEV), in a case known as Vanderstock v Victoria. The almost 2,000 page PDF of the decision can be found here, but ultimately means the highest court in the country deemed the tax unconstitutional and ordered it to be overturned.
Since then, the ZLEV collection agency VicRoads has posted information that confirms the ZLEV amounts paid by customers will be fully repaid. What we don’t know is when and if interest will be paid on top of the money owed.
Victoria has a larger issue, a massive hole in their budget. Given the amount and growth in the amount raised by the ZLEV, along with the growth in EV sales, Victoria would have planned for increases in income as a result of the ZLEV in future budgets.
We’ll get to where the money went in a minute, but the money is gone, there is no doubt about that. This means the repayment of the $5 Million will be an added expense, as will any interest deemed appropriate for effectively giving the Government a tax-payer funded loan for 2 years.
Where did the money go?
At the time this was introduced and still today on the VicRoad’s website listed the reason for collecting this charge as: ‘This funds the development and maintenance of Australian roads.’
As part of my FOI request, I asked for details and copies of any documentation that shows how this collected revenue has been spent, including how much was spent on new roads, maintenance of existing roads, and if any was deployed outside this scope.
The response I received was as follows, showing there is no evidence of where this $5 Million was spent.
How many people refused to pay?
Failure to pay the ZLEV was no joke, it could and did result in some people having their vehicle registration cancelled. Registered owners had 14 days from the date of request to provide their odometer readings.
Thanks to the FOI documentation, I can reveal a total of 469 ZLEV-non compliances resulted in the cancellation of vehicle registrations. This means that of the 21,758 vehicles (16,377 EVs and 5,381 Hybrids) just over 2% declined to pay which resulted in their vehicle being unregistered and ultimately off the road.
These registration cancellations occurred in Victoria when either a ZLEV bill was not paid, or the owner failed to submit an odometer reading. Their systems do not capture or record the reasons why someone did not pay the charge.
Below is an extract from the FOI request.