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Giving with one hand, taking with the other: Victoria launches controversial EV tax

  • May 27 2021
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Giving with one hand, taking with the other: Victoria launches controversial EV tax

By Cameron Micallef
May 27 2021

The Victorian government has become the first state in Australia with an electric vehicle tax, which is set to punish drivers for switching to cleaner sources of fuel, while having a separate policy aimed at lifting electric vehicle participation.

Giving with one hand, taking with the other: Victoria launches controversial EV tax

Giving with one hand, taking with the other: Victoria launches controversial EV tax

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  • May 27 2021
  • Share

The Victorian government has become the first state in Australia with an electric vehicle tax, which is set to punish drivers for switching to cleaner sources of fuel, while having a separate policy aimed at lifting electric vehicle participation.

Giving with one hand, taking with the other: Victoria launches controversial EV tax

In a confusing and controversial move, the Andrews government has announced a new tax on electric vehicles (EVs).

Under the new tax system, drivers will be slugged an additional 2.5 cents per every kilometre travelled starting from 1 July 2021.

The tax is expected to raise $30 million in revenue over the next four years, costing the average EV owner between $260 and $300 per year on the assumption drivers travel between 10,400 and 12,000kms a year.

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However, this is the same government who only three weeks earlier announced a new subsidy to increase ownership of electric vehicles. 

As part of its transition to cutting emission by 45-50 per cent by 2030, the government announced a zero emission vehicle subsidy that will see up to 20,000 motorists receive up to $3,000 in rebates if they switch to an electric vehicle.

The new subsidy is only available for new EVs under $68,740.

Victorian Greens spokesperson for transport Sam Hibbins MP slammed the controversial tax labelling it “climate vandalism in the midst of a climate crisis”.

"It’s outrageous that Labor want to be the only government in the world making electric vehicles more expensive,” he said.

“We’re in a climate crisis, and transport is the fastest-growing source of greenhouse gas emissions in Victoria. We should be helping people make the switch to EVs by making them more affordable instead of putting up roadblocks.

Prior to the announced changes, the EV tax was labelled “the worst electric vehicle policy in the world” in an open letter by major players in the industry, including Volkswagen, Uber and Environment Victoria.

Meanwhile, Victorian Treasurer Tim Pallas has previously asserted that the 2.5 cent tax is “modest” compared with what combustion engine drivers pay through the fuel excise.

“Everybody who uses a road should pay their fair share to maintain them,” he said in a statement back in March.

Giving with one hand, taking with the other: Victoria launches controversial EV tax
Giving with one hand, taking with the other: Victoria launches controversial EV tax
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

author image
Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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