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Budget jolt goes flat as Labor kills electric car tax

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The Marshall Government’s planned electric vehicle tax has hit a seemingly insurmountable roadblock, with Labor declaring it will block the budget measure when it comes before parliament.

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Standalone legislation is required to enact the charge, which Rob Lucas flagged as part of his budget on Tuesday.

While Opposition Leader Peter Malinauskas said yesterday opposing a budget bill was not a “go-to option in the first instance”, Labor’s caucus today opted to formalise its intent to vote it down.

As InDaily reported yesterday, key crossbenchers including the Greens and SA Best have also flagged their likely opposition, making the bill’s passage through the Upper House seemingly impossible.

“We’ve spoken with industry over the course of yesterday evening and this morning, and there’s no-one in the automotive industry, manufacturing or retailers who think this is a good idea – in fact, they’re horrified by it,” Malinauskas told InDaily.

One interest group that begs to differ is the Road Transport Association, whose boss Steve Shearer wrote in InDaily yesterday that “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”.

But Malinauskas insisted: “We think this makes no policy sense whatsoever – the reasons offered up by the Government thus far don’t add up.”

“Steven Marshall has started taxing South Australians who have decided not to hurt the earth, at a time we’re trying to encourage people to use electric vehicles,” he said.

“Only last week Steven Marshall stood up at a charging station [to spruik the Government’s strategy for increasing electric vehicle uptake] and said it was good for the environment, good for job creation and good for SA… one can only assume therefore that a big new tax on electric vehicles is bad for the environment, bad for job creation and bad for SA.”

While there has been a traditional convention that budget bills are not opposed, Malinauskas said “Steven Marshall set the precedent when he opposed a tax on big banks” in 2017 – a move that Labor figures at the time declared would be met with retribution if the Liberals seized government.

Lucas said Labor’s decision was “ultimately up to them”.

“The legislation hasn’t even been introduced yet – they can choose to do what they wish to do,” he said.

He downplayed the immediate impact, saying the projected revenue was “less than $1 million in a $23 billion budget so in the short term it’s not a budget-impacting decision”.

However, he insisted, “it’s a major reform… a strategic decision for the long term in terms of how we’re going to fund roads”.

“Long-term, it will be a significant revenue item because it replaces the need for excise [and] it’s inevitable it will happen in other jurisdictions,” he said.

“If you end up with 100 per cent electric vehicles, something is going to have to replace fuel excise – that’s as clear as the noses on our collective faces.”

But Australia’s Electric Vehicle Council praised Labor’s “clear and reasoned opposition to the State Government’s disastrous electric vehicle tax”, saying it should be “replicated by the Australian Labor Party across the country”.

Chief executive Behyad Jafari said the “clear position is invaluable for the future of the industry in Australia”.

“SA Treasurer Rob Lucas says he’s confident other state governments will follow his strange position, but given he’s made South Australia the first jurisdiction on the planet to slap a special tax on electric cars he may have disastrously backed the wrong horse,” Jafari said in a statement.

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