About Time !!Treasurer Jim Chalmers has flagged the development of a new road-user charge across Australia for drivers of electric vehicles to ensure EV drivers are contributing a fair share to road upgrades.
The Treasurer has made no secret of his support for a shake-up of the current system before the election, raising the idea with business leaders in February.
But the debate over road-user charges (RUC) for electric vehicles is now set to be reignited as a result of his speech to the national press club.
“We will also continue to work with states and territories on the future of road-user charging,’’ Dr Chalmers said.
How does fuel excise work?
The current rate of fuel excise is 50.8 cents in excise for every litre of fuel purchased.
For a typical household with a car running on petrol, the tax costs more than $1200 a year.
But the flat sales tax isn’t paid by drivers of pure electric vehicles, who simply need to plug in their cars to recharge.
While registration and driver’s licence fees go to state and territory governments, fuel excise is collected by the federal government.
Australian motorists paid an estimated $15.71 billion in net fuel excise in 2023-24, and are expected to pay $67.6 billion over the four years to 2026-27.
However, governments have long-warned that a road-user charge will be required to fill the gap in the budget left by declining revenue from the fuel excise, as the petrol and diesel engines in new cars consume less fuel and Australians adopt hybrid and electric cars.
Currently, New South Wales is the only state with firm plans to introduce a road-user charge from 2027 or when EVs reach 30 per cent of new car sales.
Plug-in hybrid EVs will be charged a fixed 80 per cent proportion of the full road-user charge to reflect their vehicle type.
Western Australia has also stated an intention to implement a road-user charge.
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