Australia’s EV Tax Law Ridiculed

Thu 12th Nov 2020

Legislators in South Australia have been accused of putting a ‘a big tax on not polluting’ and making it more difficult for car buyers to switch to EVs.

The move was announced in the Australian state’s most recent budget, with treasurer Rob Lucas’ thinking behind the move that it would make road use more equal for all of those who use the road, though campaigners have suggested that the tax has been introduced due to a sharp fall in fuel excise taxes.

Noah Schultz-Byard, a director at the Australia Institute has been one of the most vocal critics of the tax, warning that it could slow down the switch to electric vehicles, just at a time when the consumer market was warming to a greener approach to transport.

“Putting a tax on a car because it doesn’t produce any pollution is ridiculous. It’s like saying someone who gives up smoking no longer pays the tobacco excise, so they need to pay a penalty for having given up,” Schultz-Byard said.

“People can make arguments for or against, but now is not the time when the upfront cost of an EV is still higher than a petrol car. Right now the cost of batteries that go into electric vehicles has been dropping steadily and is expected to drop in the years to come.

“Slapping a tax on that will only raise the barrier back up. This might scare a lot of people away from buying an electric vehicle, which is the opposite of what we want.”

While policy makers across the globe are seen to be welcoming in the electric transport revolution, they will also too be counting the cost of lost fuel taxes and may look at ways to recoup some of those lost revenues. It’s thought that some government’s may look to add a tax on to the point of charging, with home chargers given a different rate than standard electricity.

But the immediate tax on an electric vehicle is one which hits both consumers and manufacturers hard, possibly forcing them to choose for a more polluting, but cheaper vehicle.

Speaking to The Guardian Behyad Jafari, chair of the Electric Vehicle Council said: “Automotive companies simply won’t bring EVs to our market. South Australia has one of the lowest uptakes of EVs in the world and to now become the world’s first countries to provide a net tax or net disincentive is the wrong move.”