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Victoria and South Australia should think again about how they treat electric vehicles

In the past 20 years, changes in the design of diesel and petrol-driven cars have made them increasingly fuel efficient, cutting revenue from fuel excise by some 30 per cent. With the Bureau of Infrastructure, Transport and Regional Economics now forecasting that 60 per cent of all new cars sold in Australia will be electric by 2046, the budgetary implications for Canberra are already looming large.

Yet in recent months it has been the Morrison government – despite its poor record on energy policy – that has sought to create incentives for people to buy electric vehicles. A $74.5 million package in the budget is aimed at assisting new technology for fleet cars and the installation of charging infrastructure at workplaces. To the dismay of environmentalists and innovators, it is the states, which led the way in setting net-zero emissions targets for 2050, that are putting obstacles in the path of electric vehicles.

Electric vehicle sales still make up less than 1 per cent of our national market.

Electric vehicle sales still make up less than 1 per cent of our national market.

The decisions of Victoria and South Australia to tax electric-vehicle drivers per kilometre of road use might seem at first glance to have the logic of revenue replacement in its favour. NSW Treasurer Dominic Perrottet, considering a similar move, argues it is necessary to ensure that “as fuel excise declines … we have a fair and equitable system where people who use our roads pay for our roads”.

But Mr Perrottet also acknowledges the argument put forward by his state colleagues, Transport Minister Andrew Constance and Environment Minister Matt Kean, that governments should be incentivising uptake of electric vehicles, not stifling it.

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