In a significant and much-anticipated ruling, the High Court of Australia has overturned a controversial electric vehicle (EV) road user tax for EVs introduced by the Victorian state government. This decision comes as a victory for proponents of clean transport and electric vehicle owners, who argued that such a tax would hinder the growth of the fledgling EV market. The judgment, handed down on October 18, deemed Victoria‘s EV tax unconstitutional, citing that it was an imposition on the usage of electric vehicles, a power reserved for the federal government. This means that electric vehicle owners in Victoria will no longer have to pay the ZLEV road user charge.
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Background and introduction of the EV tax
The Victorian Government introduced the controversial road user tax for EVs in July 2021. Under this tax, electric, hydrogen and plug-in hybrid vehicle owners – known as Zero and Low-Emission Vehicles (ZLEVs) were required to pay between 2.3 and 2.8 cents for each kilometre driven, regardless of whether it was within or outside the state. While the government justified this tax to recoup lost revenue from fuel excise as more vehicles transitioned to electric power, it faced strong opposition from various quarters.
Legal challenge and constitutional questions
The legal challenge to the ZLEV tax was brought by Chris Vanderstock, an electric vehicle owner and nurse manager, and Kathleen Davies, an engineering consultant. Their argument rested on the belief that states lacked the constitutional authority to impose such a tax. This contention was supported by the Victorian Ombudsman’s recent findings, which highlighted the unjust administration of the legislation, foreshadowing a judgment in favour of the claimants.
A landmark decision in constitutional law
The High Court’s ruling, which deemed Victoria’s EV tax unconstitutional, has set a precedent that could deter other Australian states, such as New South Wales (NSW), from enacting similar laws. NSW had announced plans to introduce a comparable road user tax in 2027 or when electric vehicle uptake reached 30%. The decision has opened up the debate on the federal government’s role in regulating such charges related to electric vehicles.
The NRMA, a motoring organisation, said it supported introducing a road user tax in NSW, but only if it was simpler to implement and fairer to all motorists.
Impact on the EV industry
The outcome of this case has far-reaching implications for the electric vehicle industry in Australia. It underscores the importance of ensuring that road user charges are not calibrated to discourage the adoption of electric vehicles. Behyad Jafari, CEO of the Electric Vehicle Council, pointed out that while not inherently problematic, road user charges should be designed to focus on equitable and sustainable transport without penalising those making environmentally responsible choices.
Supporters of the ruling argue that electric vehicles play a vital role in reducing carbon emissions, combating pollution, and improving public health. Therefore, measures that deter their adoption could harm Australia’s efforts to reduce emissions from the transportation sector.
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A call for national road funding reform
The ruling serves as a reminder that a more comprehensive and coherent approach to road user charges is needed. Many hope within the electric vehicle industry that such charges should be part of a national framework rather than a piecemeal approach by individual states. In light of this decision, there is an opportunity for collaboration between state and federal governments to establish a more sensible and uniform road funding system that supports sustainability without discouraging electric vehicle adoption.
Source&Images: High Court of Australia Judgment Summaries, NRMA Electric Vehicle News
The High Court of Australia’s decision to overturn Victoria’s road user tax for electric vehicles represents a significant milestone in the country’s ongoing clean and sustainable transport evolution. It emphasises the importance of equitable and well-considered road user charges while recognising the pivotal role that electric vehicles play in reducing emissions and improving environmental and public health. This ruling sets the stage for a more coherent and nationally coordinated approach to road funding reform, ensuring that the adoption of electric vehicles is encouraged rather than penalised.
Read more about electric vehicles
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