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    Victoria’s ridiculous tax on Electric Vehicles has passed, starts July 1st 2021

    Today, Victoria’s Legislative Assembly debated the merits of the ‘Zero and Low Emission Vehicle Distance-based Charge Bill 2021’. This bill is more commonly known as the EVTax.

    The bill has now passed both houses after being committed and passed without amendment.

    Despite much opposition to the EV tax, it is now set to come into effect from July 1st, 2021. The new EV tax will see 2 different per kilometre rates depending on characteristics of the vehicle.

    • 2.5 cents for electric vehicles and hydrogen vehicles;
    • 2.0 cents for plug-in hybrid vehicles

    Here’s the kicker, the price will be varied in line with indexation, meaning it’ll go up over time, varied each financial year.

    If you’re the owner of a Zero or Low Emission Vehicle (ZLEV), then you will be required to lodge an initial declaration that will be used to calculate the distance travelled of the coming months and years. This needs to be submitted within 14 days of the July 1st start date.

    This needs to be in the form of an odometer reading, including evidence (i.e. a photo) at the time the declaration is lodged. This photo is information is to be provided to the secretary of the department of transport Victoria, who is currently Paul Younis.

    After submitting your second reading, the Secretary will determine the amount of the ZLEV you need to pay and send you an invoice for the EV tax. The Secretary will calculate the distance travelled by the ZLEV in that period (some may opt for monthly/quarterly) and subtracting from that the distance travelled by the ZLEV during that period that was not on specified roads.

    Here in lies one of the big issues with a state-based road usage charge. As someone from the regional city of Albury Wodonga, we have lots of people who live in VIC and work in NSW. This means you’ll clock up thousands of km per year on NSW roads, but be paying the VIC Government a tax for it. Clearly that’s wrong and it leaves the individual or business to track where they drove. This evidence of odometer readings and essentially a log of where you’ve been, are required to be kept for up to 5 years.

    In a connected car like a Tesla Model 3, it would be possible to have the vehicle track the state in which the kilometers were driven and provide the exact number to the driver for submission, had the Government worked with electric vehicle manufacturers. Without that, the whole system is very manual.

    If you drive an EV in Victoria and don’t submit a reading, or fail to pay your invoice for the EV tax, the Victorian Government can suspend your registration. If you are late on payment, you can also be charged interest on the balance.

    What’s crazy about the EV tax, is that it was proposed as a solution to what will ultimately be a diminishing revenue from the current unleaded petrol and diesel excise that currently stands at 38.12 cents per litre. As more owners chose electric vehicles, there will be less tax going to the Government. Proponents of the tax argued that this money is spent on maintaining the roads, but that’s not actually true.

    The Federal Government collects the fuel excise and GST and provides states with grants for road projects. At the local level Local Government fund road works in towns and cities, which can be collected via rates paid by home owners.

    Having a systemic hole in a budget is a problem and a road user charge can seem a fairer technique to pay for existing road maintenance and new roads, however, it seems the motivation behind this tax is to bring in a new source of income for a State Government, that has absolutely no requirement to use this revenue on roads.

    Introducing a tax on electric vehicles that reduce our emissions and help us achieve our state and national environmental objectives, should be encouraged, not taxed. In Australia, less than 1% of all new vehicles sold are electric, as prices remain high and vehicle choices remain limited.

    Range of vehicles is increasing as battery tech improves, as is the story on recharging locations, but our transition to electric vehicles doesn’t happen automatically. Recently the Victorian Government began offering $3,000 rebates to up to 20,000 electric vehicle purchasers, so an EV tax seems to work against that incentive.

    It is important to understand this EV Tax is here to stay for decades, while the rebate scheme is limited for the short term.

    It is expected the average EV owner will pay around A$3-400 based on average km driven per year. It is worth remembering that distance charging isn’t necessarily fair. If we decide to go on a road trip on the weekend, or a holiday with the family, sure that’s optional travel, but if you bought a place 45 minutes out of the city, because that’s all you could afford, then you’ll pay more as you have to travel further every day and every year.

    Obviously with the adoption of EVs in Australia being so low, it’s politically opportunistic to introduce this new revenue stream now, before there’s a higher percentage of EV owners that could vote differently at the next election.

    This EV tax will be watched closely around the world, as others attempt to copy it.

    More information at Legislation.vic.gov.au and you can read the full ZLEV bill here.

    Jason Cartwright
    Jason Cartwrighthttps://techau.com.au/author/jason/
    Creator of techAU, Jason has spent the dozen+ years covering technology in Australia and around the world. Bringing a background in multimedia and passion for technology to the job, Cartwright delivers detailed product reviews, event coverage and industry news on a daily basis. Disclaimer: Tesla Shareholder from 20/01/2021

    23 COMMENTS

    1. Vote them out at the next election. That’s the only solution to a government that is taxing a soft target without any real justification. The politicians have not considered the significant tax already paid by EV purchasers at the time of purchase and the savings in the future health budget by reducing the number of deaths and medical events per year by not poisoning members of the general public with your tailpipe emissions. EV owners are a target at this time because Fossil Fool politicians believe that if you can afford an EV you can afford to pay a special tax. I’m voting Greens at the next election(s) for the first time as both major parties (Labor and Coalalition) don’t have any real policies to combat climate change.

      • That’s right – vote Greens.
        Not much point voting for the LNP, they’re even more backwards, anti EV and anti action on climate change than Labor.

      • Any one voting for the greens are not educated. EV tax is fair as the governments require fuel excise tax for their budgets as an ongoing entity. To counter act the lack of excise then EV owners like me do need to pay their way. I’m not affiliated at all with any forms of government. For me driving less than 10,000 Ks per ann, $250 per ann is much more cost effective than fuel excise. So for me owning an EV is still a WIN.

        • Anyone saying that a whole group of people are not educated, is not educated.

          This should have been resolved at the federal level. Then it would have been consistent across Australia (removing the ‘but what if I visit another state’ issue). They would then have also had the ability to revoke (or revise) fuel excise at the same time, and make the method of taxation consistent across all vehicles.

          This is the wrong time to penalise EVs. At the moment the dip in fuel excise is completely negligible. Every other country is incentivising them. It’s like this government doesn’t want to clean up our cities and get closer to the alleged 0 emissions goal. We can’t afford this tax if we want to move towards either. It would (and should) have happened eventually, but this is terrible timing and the method leaves a lot to be desired too.

        • Not affiliated? Me thinks you bleed labor. This is a huge discouragement to, especially, purchase a plug in hybrid. And not everyone drives only 10,000 kms a year. It’s a tax grab by an incompetent labor government needing to fund a bloated partisan bureaucracy full of union mates.

    2. GOOD, its long past due that EV’s started paying their share of using/maintaining the roads.

      A couple of cents per kilometre is nothing compared to all the taxes levied on petrol for traditional car owners.

      • Yep it’s got to happen. Tax income is deminishing from petrol/diesel sales. Give us one good reason why somebody driving an electric car should not pay their share of road taxes.
        Diesel road mileage user tax has been in NZ for years and works perfectly.

      • That would be a valid point if taxes levied on petrol were actually linked to local expenditures on road maintenance. But they don’t, and they haven’t for decades. They just go into the pot with everything else. Petrol vehicle owners mainly pay for road maintenance through other taxes, and EV users would be no different.

        Another problem with the entire argument of using fuel excise tax for road maintenance is that the more fuel efficient a vehicle is, the less it would pay for road usage, but it isn’t necessarily using the road any less. As cars become more fuel efficient, less money would be collected for road maintenance. Cars have become a lot more fuel efficient in the past couple decades, but the relative cost of road maintenance per vehicle has not declined.

        If the government were really serious about this, fuel excise tax would be dumped, and a nationwide tax per kilometer would be implemented, regardless of the type of vehicle. But that tax system would be a nightmare to maintain and monitor, just like this EV tax will eventually be.

        Better to raise taxes for road maintenance through other means, which is probably what will happen eventually as EV vehicles replace petrol vehicles and the cost of the EV tax enforcement starts to balloon.

      • Hi Dee, I paid the luxury car tax, stamp duty and GST when I purchased my long range Electric Car. I replaced a 2001 VX Commodore with a 2019 Tesla Model 3. This is the 2nd new car I have ever purchased and the most I have ever paid for a car because I wanted to do the right thing by the environment. Notwithstanding the significant tax paid at the time of purchase which well and truly pays for road maintenance for a decade I am not poisoning you and your relatives when I drive past your house. Why should I pay more tax when I have already paid much more than you? If you want fair taxes then you need to campaign for all the truck drivers who are destroying the roads to pay their fair share of tax. A specific tax on electric vehicles makes no sense just like your argument.

      • Well if it’s all about the impact, how about petrol/ diesel drivers start paying for the other costs they incur, how about the hundreds of lives lost every year due to vehicle emissions, perhaps it’s time to start charging them for the billions per year in medical costs vehicle emissions cause and that’s all before we consider the multi trillions of work that climate change will force upon us.

        How about you refund all the extra GST and stamp duty that EV drivers had to pay.

        You speak from a place of utter hypocrisy if you think this is about fairly taxing people for the impact of their actions.

        PS: people who are unable to see the full picture are why the government takes these kinds of actions, ignorance shouldn’t be an excuse. I’d love to see people all pay their share, if it happened people with your attitude would really have something to whinge about.

    3. Tesla share holder doesn’t want to pay. $0.02 per kilometre of travel but $0.38 per each litre of petrol is fine.

      • A new PHV Plug in Hybrid drives about 50 to 60 km on a full battery before the combustion engine sets in. So every km I drive after the battery is empty will be tax with 2 cents/ km plus the 38.12 cents per liter? Pure greed. Who voted for this government?

      • At 2.5c/km, you would actually pay less fuel excise for any petrol or diesel car that achieves better than ~6.7 litres/100km, which is almost any recent small or medium car.

        • You have hit the nail on the head here. Any fossil fuelled car that achieves 6.7 l/100km will incur less excise (38 cents/litre) than the 2.5c/km – $2.50/100km than an electric vehicle. That is absolutely mad!!

          The people that voted for this clearly have poor ability with maths.

          This tax is discriminatory – and we have to find a way to get people to realise how bad this is.

          I was looking for a list of fossil only fuelled vehicles with low fuel consumption. Short of a full and ordered list, I’ve found a few that are worth mentioning — the Peugeot 308 Touring diesel consumes 4.6 l/100km – cheaper than an electric car. The Audi A1 1.0TFSI S-Tronic consumes 4.4l/100km. I’m sure there will be quite a few.

          Those cars are a fraction of the cost of most electric vehicles – a lot more tax paid there.

          And as Joelene said, the plugin hybrids will be paying an additional $2.50 per hundred KM when their battery has run out, so double the excise / tax.

          This legislation is inequitable, and a complete disincentive to purchasing an EV.

          • That should be:

            “And as Joelene said, the plugin hybrids will be paying an additional $2.00 per hundred KM when their battery has run out, so double the excise / tax.”

            I used the 2.5c/KM instead of the 2.0c/KM rate – same effect though.

            Moreover, whilst fossil fuelled vehicles continue to become more fuel efficient, the indexation of the rate for ZLEVs will increase the tax, amplifying the inequity even further.

    4. I read that legislation to include travel on highways outside (yes outside) of Victoria. Am I reading that correctly?

      Putting aside the ridiculousness of this tax, it’s placing a compliance requirement on vehicle operators. They have to maintain a logbook and then prove where the vehicle has been driven … and maintain those records for 5 years. Or simply let the government tax them for everywhere they have driven, even though they are not entitled to that under the legislation. This is so ridiculous it’s a joke surely?

    5. I drive a 2016 Skoda Octavia wagon, base model, 1.4 litre turbo 6 speed manual.
      When returning from Mother’s Day, a 126km trip, I managed to get 4.0L/100km.
      so, at $0.38/litre that’s $1.52 excise paid per 100km.
      If I was in an EV, I’d have paid $2.00 per 100km.

      Uh…. Wut???

      Now, in my usual driving I don’t get 4L/100km, I get 5.5L/100km (and that’s driving 15km into the near CBD and back), but… when a fossil fueled car can pay less “road tax” than a non-polluting EV, well, I think that something is seriously bonkers.

      • Each year as part of the registration process the odometer reading is recorded. The tax being a state tax can be calculated via this yearly recording. The amount could be a part of the registration total cost.

    6. Does this mean that plug in Hybrids (fossil fuel & battery) are charged 2 cents per km even when they are using fossil fuel? or does the battery show how many kms were travelled on it?

      I always thought plug-in hybrid makers were probably paid off by fossil fuel companies so they wouldn’t remove the fossil fuel use. Now with it taxed too it’s like everyone gets their cut and the government gets a triple dip. They get tax from kms, tax from fuel and get to say they are bringing down state emissions.

      I do approximately 45,000kms a year and have been looking at an electric car. So I’d be up for about 1 grand or more. The question is, why?

      Why tax people who are helping the world change? Why tax people for being part of technological advancement?

      Electric vehicles have such huge amounts of taxes placed on them at purchase, taxing further makes no sense to me.

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