The Australian government has signalled that electric vehicle (EV) drivers will soon face road user charges, as the country grapples with declining fuel excise revenue. Prime Minister Anthony Albanese confirmed that the reform will be discussed at next week’s productivity roundtable in Canberra, with a plan expected to be implemented within this parliamentary term.
The move comes as data from the Australian Automobile Association shows EVs accounted for nearly one in ten new car sales in the June quarter – a record high. This shift to battery-powered vehicles has eroded revenue from fuel excise, currently set at 51.6 cents per litre. However, a 2023 High Court ruling struck down Victoria’s attempt to impose its own EV tax, ruling that only the federal government can levy excise taxes.
Treasurer Jim Chalmers noted that Labor had flagged potential changes before the May election and is working with state and territory counterparts. He stressed that any government would need to address the issue as petrol vehicle numbers decline. The Productivity Commission has previously called for road user charging, arguing it would provide a clear cost signal for infrastructure use and investment.
Industry voices have urged caution. Scott Maynard, managing director of Polestar Australia, pointed out that motorists already pay multiple taxes and fees, including stamp duty and tolls. He called for a broader review of the entire transport taxation system rather than adding a new charge on top of existing ones.
