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Electric vehicle tax might short-circuit in Parliament

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A controversial tax on electric cars announced in yesterday’s State Budget might go flat before hitting the road, with the Opposition reserving the right to block the required legislation and crossbench MPs labelling it premature.

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Treasurer Rob Lucas yesterday outlined plans to introduce a user charge for electric vehicles from July 1 next year, but he said it would need to be legislated.

He argued that electric vehicle users should pay taxes to maintain roads, as other drivers did with a fuel excise paid on every litre of petrol or diesel, especially as more people switched to the green mode of transport.

The levy would include a fixed component and a variable charge based on distance travelled.

Lucas wouldn’t yet say how much each user would pay but he estimated the measure would reap a million dollars a year initially.

The announcement has sparked a backlash from a peak car lobby group, the national body for electric vehicles and conservationists, who fear it will be a major disincentive in encouraging an uptake of electric cars.

Opposition leader Peter Malinauskas this morning told reporters his party wouldn’t be rubber-stamping the budget measure.

“We want to see the legislation,” he said.

“We want to be able to talk to people in the industry about this policy but I think it’s shocked a lot of South Australians that at a time we’re trying to encourage people to use electric cars, Steven Marshall is bringing in a brand new tax on electric cars.

“We think there are a lot of questions associated with that and we will be examining those in the coming weeks.”

Malinauskas wouldn’t rule out blocking the budget measure just as the then-Liberal opposition declared it would do with the controversial bank tax in 2017.

“We don’t think that is a go-to option in the first instance but we are going to reserve our rights in that regard given the Marshall Liberal Government did what they did on the bank tax,” he said.

“We are going to be talking to industry over coming days and weeks to assess our position and make sure it’s a thoughtful one. But suffice to say, at the very time we want to encourage people to use electric cars, to start taxing them for that seems like an unusual choice.”

The Federal Chamber of Automotive Industries this morning described the proposed tax as “beyond belief”.

FCAI chief executive Tony Weber said: “We believe this charge will make South Australia the only jurisdiction in the world that actually opposes the uptake of low and zero emission vehicles.”

The Greens said they wouldn’t support legislation to bring the tax in from next year, insisting it was premature, with less than one per cent of South Australians currently driving electric vehicles.

Greens MLC Mark Parnell said “the name of the game at present has to be encouraging the uptake of electric vehicles”.

“To choose now to impose a new tax is really bad timing,” he said.

“In 20 or 30 years it might be an appropriate thing to do when everyone is driving electric cars, but not now.

“I accept that if… no one is driving petrol cars anymore and you need some way of paying for different things, then some sort of user charge might be appropriate.

“But that would be in the future when electric vehicles have come into their own and they’re a dominant form of transport.”

Parnell said it sent the message that “if you choose to do the right thing by the planet and go to an emissions-free vehicle we will punish you by taxing you more”.

SA Best MLC Frank Pangallo also said he was unlikely to support legislation to introduce the tax from next year.

“Unless there are incentives for people to go out and buy these vehicles, there’s no way we’ll be supporting it,” he said.

“How can you introduce this tax next year when there’s so few of them and you haven’t got an incentive?”

Pangallo called on the Government to release a transport plan for electric vehicles.

Fellow SA Best MLC Connie Bonaros said “clearly we have concerns but it’s a bit premature to commit either way at this stage”.

“The devil is always in the detail and we have very scant detail about what is being proposed by the Treasurer at this stage,” she said.

Lucas said “it will be up to the Parliament as to whether they support the legislation or not”.

He said the Government was in discussions with two other jurisdictions “who are considering the same thing”.

“I think most states acknowledge that, in the long term, this is a no-brainer – it has to happen,” he said.

“Whether other jurisdictions are going to have the courage to do it as we have done or announced – we have to introduce the legislation – is really a decision for them.

“But in the long-term it will have to happen.”

The SA Road Transport Association argued electric car users “must pay their way too”.

In a letter to InDaily today, executive officer Steve Shearer said: “A road user tax on electric vehicles is essential and unavoidable, so it is better to introduce it now as electric vehicles begin to become more numerous.

“Every motorised vehicle on the road pays for the use of the roads and funds the construction and maintenance of roads through the fuel excise charge that is paid with each litre of fuel bought.”

The Electric Vehicle Council argued the tax was “far too soon” and would be a disincentive for more people to buy the environmentally-friendly cars, while Conservation SA said the levy “doesn’t add up”.

“The announcement of a new road user charge for electric vehicles is bad public policy and completely at odds with other countries who are removing taxes and charges to encourage uptake,” Conservation SA chief executive Craig Wilkins said.

“Last week, the Marshall Government was praised for investing in new electric vehicle charging infrastructure and fleet. This is going in exactly the opposite direction.

“We need to urgently fast-track the uptake of electric vehicles, not slow it down.”

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