Treasurer Rob Lucas announced the road user charge at the state budget last November, arguing the tax would raise more than $1 million for road maintenance and bring EV users in line with petrol car drivers who pay fuel excise to the Commonwealth.
Lucas announced yesterday that implementation of the tax – originally slated for July 1 this year – would be delayed until July 2022 to give the government more time to consult with industry groups and monitor developments in other states.
The legislation will be debated in state parliament in the coming months, with Labor and several members of the crossbench already indicating they will vote against the legislation.
Treasurer Rob Lucas conceded the government does not have the votes to pass the bill at the moment.
“At this stage, the government doesn’t have the numbers,” Lucas told InDaily.
“The Labor Party say they’re opposing it, a number of the crossbenchers indicated their opposition, so it’ll be a process that we have to go through.
“Bearing in mind we didn’t have the numbers originally for the land tax reforms either, which was successfully implemented.”
Lucas said the two reasons for delaying the implementation of the tax were to ensure consistency with other jurisdictions and the government’s uncertainty on whether it can pass the legislation.
“The Victorian legislation still hasn’t been finalised and introduced, and we want to see the greatest degree of consistency with us and potentially with New South Wales as well,” he said.
“And then for the [second] reason that we’re not convinced we’re going to be able to get the legislation through.
“Even if we do in time, [we need] plenty of time for a sensible first of July start up.”
The Victorian Government plans to implement a distance-based charge on EV users from July 1 this year, which would see users paying 2.5 cents per kilometre.
NSW Treasurer Dominic Perrottet has also indicated an EV tax will reach the floor of NSW Parliament in 2021.
Greens MLC Mark Parnell said the implementation delay in South Australia means the government can “hide” behind other jurisdictions.
“The government clearly misjudged the mood in the community, which was that people want to see the support and encouragement for electric vehicles, rather than a tax that only applies to electric vehicles,” Parnell said.
“What they’re now doing is trying to hide behind the process in other states because it is so unpopular – they don’t want to be first.”
Lucas said in November that “sometimes someone’s got to have the courage to put their toe in the water first” regarding his decision to introduce the tax.
Asked whether he was disappointed the South Australian implementation has been delayed, he said the government “always knew” it would be behind other jurisdictions.
“We were always going to be behind Victoria because they were actually going to introduce it in February this year,” he said.
“We knew that at the time of the budget, we weren’t able to say so.
“In the ideal world we would have got an agreement to implement from the first of July, but the reality is parliament has to either agree or not agree on these proposals.”
The delay comes after revelations this week that just 6900 EVs were sold in Australia last year, up only 2.7 per cent from 2019.
EVs also only make up 0.7 per cent of Australian car sales, compared to 10 per cent in the UK and EU.
CEO of the Electric Vehicle Council Behyad Jafari said the low sales were due to a range of factors, including the availability of cheaper non-luxury EVs in other markets.
“In those markets, governments have very supportive policy in place,” Jafari said.
“The government also gives you a $10,000 tax rebate for buying an electric vehicle.
“None of that exists in Australia, so a global company looks and says the US, UK, the EU and across Asia the consumers get these incentives – they don’t get them in Australia, so we’ll send that product somewhere else.
“This is what was particularly worrying about Australia being the first country to actually start taxing them further to discourage them.”
Jafari said he is not surprised the implementation of South Australia’s road user charge has been delayed given the opposition in the upper house.
“Delay is a kind way of saying this isn’t going to pass, and we recognise that’s it’s not going to pass,” he said.
“We’ve spoken to the treasurer I think as politely as we can and said … the right time to consult with industry would be before you announce a new tax and scare consumers and get everyone worried, rather than a few months afterwards when you say the passage of it is going to be difficult.
“It’s not that we’re opposed to a road user charge, it’s that this is a premature and exclusive tax on electric vehicles.”
Lucas disagreed with the claim that the tax is premature.
“I understand the criticism but we don’t agree with that particular view,” Lucas said.
“Certainly all the advice we’ve received, even from those who oppose it, is that they agree with the view that electric vehicles will be cost-competitive by about 2025.
“So the two reasons that discourage people from purchasing electric vehicles at this stage are one: it’s not cost-competitive at the moment, it’s too expensive, and secondly, is concern about charging infrastructure across the state.”
The Treasurer pointed to the government’s $18.3 million commitment to upgrading and installing charging infrastructure across the state as one of its key policies designed to increase EV uptake in SA.
The state government is also committed to moving its entire car fleet to EVs by 2030.
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