Victoria’s electric vehicle tax thrown out by High Court

[GO FURTHER]

A win for EV owners in Victoria.

https://www.abc.net.au/news/2023-10-...-tax/102989942

[Wretched]

It's a good win.

[kypez]

Originally Posted by GO FURTHER

A win for EV owners in Victoria.



https://www.abc.net.au/news/2023-10-...-tax/102989942

Should've never been a state tax to replace a federal one.

It'll come back as a federal tax no doubt. Labor won't introduce it after the Referendum but the next Libs majority will and Labor will never roll it back.

[Wretched]

Originally Posted by kypez

Should've never been a state tax to replace a federal one.

It'll come back as a federal tax no doubt. Labor won't introduce it after the Referendum but the next Libs majority will and Labor will never roll it back.

Shouldn't have been there in the first place. The hybrid/PHEV users were badly burnt by this BS tax as well. Even if they never charged their PHEV, they were paying 2 taxes.

[kypez]

Originally Posted by Wretched

Shouldn't have been there in the first place. The hybrid/PHEV users were badly burnt by this BS tax as well. Even if they never charged their PHEV, they were paying 2 taxes.

Yes, agreed. It was terrible to tax hybrid users the way they were.

I recently bought a hybrid to test out the fuel consumption and see if they really were cheaper to run than an EV. Bought a RX450h which is similar in size to the Y. They use a lot of fuel in the real world and sit at 7-8 litre/100. That's about $14-16 per hundred so plenty of excise and GST in that as well. They're paying enough in fuel excise.

[MITCHAY]

While its a good result you know the house will get its cut one way or another. Honestly though how they thought they could replace a federal tax with a state based one is unbelievable

[kypez]

I think NSW saw the writing on the wall with this challenge and have brought forward the end date for their subsidies now that they know they can't make it back by taxing EVs.

[Warrenk]

There is nothing stopping them from uping the registration, or removing the registration completely and replacing it with a price per klm with EV's being a higher rate. The government will always win out in the end.

[whynot]

As much as I support EV, I think it was a bad loss for ICE owners and for road users in general.

EV users should be very careful what they wish for.

Let me explain ...

First, the High Court has judged that the Victorian Government did not have the constitutional powers to generate this particular tax. Fair enough, that is the constitution.

However, general ICE users (i.e. petrol and diesel) are taxed to the tune of around $13.5B per year in fuel exercise, or about 42.5 cents per litre. Around $7B of that is returned in the form of "land transport" initiatives. A vague term that appears to also include syphoning off money for rail, bus, bikeways, and walking paths. The actual dollars from the fuel exercise that end up improving roadways is about 29% of that collected (around $4B).

The rest of the fuel tax disappears into consolidated revenue.

On top of this, ICE users get slugged again with a 10% GST on top of fuel. All of which is handed over to the State Governments and disappears into their consolidated revenue. The actual GST collected is a little hard to find in the budget papers, but it appears to be around another $6B.

Assume a ICE vehicle doing 15,000km/year. Assume average fuel consumption of around 10l/100km. Assume average fuel consumption is around 1500l per year. Assume average fuel price around $2/l, giving an average fuel bill of around $3000 per year. From the Federal Budget explainer FY2022, the fuel exercise is around 42.5cpl. Which means the average ICE user is paying around $1270 in fuel exercise tax per annum, plus around $272 in GST, giving a total around $1542.

So, all up, ICE users are forking out around $20B into government coffers, getting back around $4B in road improvements, and waving goodbye to the rest as it disappears into consolidated revenue.

Turning to an EV user who is doing around 15,000 km/year. Assuming an average of 200Whr/km, they will go through around 3MWh a year in electricity. Assuming they purchase all of their electricity from the grid at $0.3/kWh they will have a "fuel" bill around $900. Assuming 10% GST, their contribution to taxes is around $90/year.

If the EV owner has the capital, they would have received a grant from the government for any solar PV system they installed. Effectively paying zero fuel tax if they can recharge only during daylight hours.

And now we get to the nub of the problem.

For each ICE vehicle that is removed from the road (in favour of an EV), the government is loosing around $1500 in revenue per year.

Consider what will happen if I get out my magic wand and turn every ICE into an EV overnight. The Commonwealth and State governments loose around $20B in revenue overnight.

There is also a societal impact to this. Low social-economic users of ICE vehicles - some of who are struggling to put even food on the table - are disproportionately cross-subsidizing EV users. This can only lead to social unrest in the longer term.

While I love EV, my view is that they are also a very noisy minority of road users who have been guilt tripping society into giving them all types of financial exemptions.

They need to start paying their way, like the rest of road us users.

[kypez]

I didn't get any incentives and paid about $30k in tax when I bought my Model S. I'm not for incentives and most are targeted for the cheapest EVs.

The two speed economy will be interesting as haves vs have nots increases.

Govt will be happy to lose that money for fuel security though. If most of the population is EV and we end up with a War (or effects of war) and fuel becomes an issue, at least with EVs will keep the economy going forward and transportation doesn't halt.

I don't mind paying a road tax. I save more than enough on fuel anyway and yes, bar July and August where we don't make enough solar, I don't use the grid at all to charge the cars.

[Wretched]

I think the whole folly of "EV users not paying their way" is just that, a folly and a whinge.

EV drivers paid tax on their car (GST, LCT & stamp duty), not forgetting ongoing registrations as well. EV users are tax payers who pay an income tax. They also pay a GST on their electricity bill.
Don't forget not everyone pays the same amount of excise. I have a car that runs about 6l/100km, I technically drive on the road more than our friend with his 5.0l V8 but he pays more "tax."
I don't agree on subsidising the purchase of any EV cars or anything like that.

Are we going to get to a point in time where it becomes a user pay system? Cause I sure as hell don't want that. Imagine the health system turning into pay as you go instead of it being funded for everyone?

This is an opportunity for the federal and state governments to review road funding as a whole, the excise goes into general revenue at the federal level. So it never funded state roads.

If collecting tax is your concern, then I am sure you'd be keen to object to the stage 3 tax cuts, reviewing the tax breaks on "work vehicles" and other loopholes that leak billions in possible tax revenue.

[whynot]

Originally Posted by whynot

Which means the average ICE user is paying around $1270 in fuel exercise tax per annum, plus around $272 in GST, giving a total around $1542.

Whoops ... just read this section again, and clearly I cannot do my maths. Fuel exercise is $637 plus $272 in GST, totalling around $909 pear year in this example.

[whynot]

Originally Posted by Wretched

I think the whole folly of "EV users not paying their way" is just that, a folly and a whinge.

There is a significant benefit in the current fuel tax structure for EV.

Originally Posted by Wretched

EV drivers paid tax on their car (GST, LCT & stamp duty), not forgetting ongoing registrations as well. EV users are tax payers who pay an income tax.

So to do ICE vehicles.

Originally Posted by Wretched

They also pay a GST on their electricity bill.

Depends. A person who can charge there EV via their solar PV system pays no "fuel tax". None, whatsoever.

The Federal Government's STC rebate is presently $396 per kW installed. Assuming a 10kWh system (which is the typical average at present), is a cash back to the home owner of nearly $4000.

Originally Posted by Wretched

Don't forget not everyone pays the same amount of excise. I have a car that runs about 6l/100km, I technically drive on the road more than our friend with his 5.0l V8 but he pays more "tax."
I don't agree on subsidising the purchase of any EV cars or anything like that.

And that was one of my points. Those in lower social-economic groups can least afford a new vehicle (with lower fuel bill) or to swap over to an EV. They are struggling with 20 year old clunkers that are chewing through fuel. In the process, paying a fuel exercise tax that EV owners avoid completely.

Originally Posted by Wretched

Are we going to get to a point in time where it becomes a user pay system? Cause I sure as hell don't want that.

But it is a user pays system. For the ICE user more km driven = more fuel used = more tax collected. For EV users, they are presently getting a free ride by not pay over $20B in tax collected.

Originally Posted by Wretched

If collecting tax is your concern, then I am sure you'd be keen to object to the stage 3 tax cuts, reviewing the tax breaks on "work vehicles" and other loopholes that leak billions in possible tax revenue.

It may come to that.

[Wretched]

Originally Posted by whynot

Depends. A person who can charge there EV via their solar PV system pays no "fuel tax". None, whatsoever.

Assumption. Doesn't cover everyone.

The Federal Government's STC rebate is presently $396 per kW installed. Assuming a 10kWh system (which is the typical average at present), is a cash back to the home owner of nearly $4000.

See above.

And that was one of my points. Those in lower social-economic groups can least afford a new vehicle (with lower fuel bill) or to swap over to an EV. They are struggling with 20 year old clunkers that are chewing through fuel. In the process, paying a fuel exercise tax that EV owners avoid completely.

Not completely true. The car i quoted at is a 15 year old Mazda 3, not a clunker at all. There are other older cars that are quite fuel efficient. But is it fair, as you put it, that people with smaller efficient cars don't have to pay as much?
Again, you assume that the feds pass on the funds to the states to manage their roads directly from the excise.

But it is a user pays system. For the ICE user more km driven = more fuel used = more tax collected. For EV users, they are presently getting a free ride by not pay over $20B in tax collected.

No it is not. Some pay more than others even if they drive less KM overall.
No, EV users are not getting a free ride, they pay rego which is "supposedly" paying for the actual suburban roads.

[whynot]

Originally Posted by Wretched

Assumption. Doesn't cover everyone.

See above.

Not completely true. The car i quoted at is a 15 year old Mazda 3, not a clunker at all. There are other older cars that are quite fuel efficient. But is it fair, as you put it, that people with smaller efficient cars don't have to pay as much?
Again, you assume that the feds pass on the funds to the states to manage their roads directly from the excise.

The logic is that the heavier the car is the more it impacts on road wear. As heavier vehicles also chew through more fuel, they will pay proportionally more tax.

The alternative tax model is a congestion tax (e.g. London) and toll roads.

Originally Posted by Wretched

No it is not. Some pay more than others even if they drive less KM overall.
No, EV users are not getting a free ride, they pay rego which is "supposedly" paying for the actual suburban roads.

So, just to be really clear ... I love EV. I think they are great technology. I had a Mitsubishi Outland PHEV back in 2014 and I could do the round trip from home to work and back to home on the battery.

To me the most attractive attributes of having an EV is NOT the reduction in fossil fuel use. To me, it was the lower noise, lower vibrations, and smooth acceleration that makes an EV so nice to drive.

However, it is a cold hard fact that the Federal and State Governments are collecting around $20B more in taxes from ICE than they ever will from EV under the present tax arrangements. If we instantly have EV everywhere, then the Federal and State Governments have a $20B hole in their budget. A $4B hole earmarked for roads and a $16B hole for consolidated revenue.

This is even before we get to the revenue generated by car rego.

One can argue all they like about EV paying their tax, but the data is very clear in government position papers. The Commonwealth Parliamentary Budget Office priced a 2019 proposal to mandate EV by 2030 as having an impact on the fiscal position by a negative $4.7B in 2030 (and that is still with a large fleet of ICE still in the system). There are a number of forward looking budget papers on the impact of EV on Commonwealth and State Government budgets.

And, as American statesman Benjamin Franklin has said, but in this world nothing can be said to be certain, except death and taxes.

[b0son]

Originally Posted by whynot

The logic is that the heavier the car is the more it impacts on road wear. As heavier vehicles also chew through more fuel, they will pay proportionally more tax.

Except that logic goes out the window where trucks are concerned, because not only can there be fuel subsidies, the registration costs are not remotely proportionate to the amount car drivers pay for the mass they haul.

This decision is a bit of a double whammy to passenger vehicle ICE drivers TBH, who continue to prop up the road network while everyone gets a discount or a freebie.

[Trevor 57]

Originally Posted by Wretched

I think the whole folly of "EV users not paying their way" is just that, a folly and a whinge.

EV drivers paid tax on their car (GST, LCT & stamp duty), not forgetting ongoing registrations as well. EV users are tax payers who pay an income tax. They also pay a GST on their electricity bill.

and so did I when I bought my diesel Ranger and when working and when buying diesel - nothing new there ol' mate. Electricity is not taxed like petrol or diesel

Originally Posted by Wretched

Don't forget not everyone pays the same amount of excise. I have a car that runs about 6l/100km, I technically drive on the road more than our friend with his 5.0l V8 but he pays more "tax."
I don't agree on subsidising the purchase of any EV cars or anything like that.

Are we going to get to a point in time where it becomes a user pay system? Cause I sure as hell don't want that. Imagine the health system turning into pay as you go instead of it being funded for everyone?

This is an opportunity for the federal and state governments to review road funding as a whole, the excise goes into general revenue at the federal level. So it never funded state roads.

If collecting tax is your concern, then I am sure you'd be keen to object to the stage 3 tax cuts, reviewing the tax breaks on "work vehicles" and other loopholes that leak billions in possible tax revenue.

why should I (through my diesel and petrol excises) subsidise your road use? e.g wear and tear of the road network. Your post (and others) sounds an awful like a 'minority whinge' to me

The sooner another tax is introduced the better

[Wretched]

Originally Posted by Trevor 57

why should I (through my diesel and petrol excises) subsidise your road use? e.g wear and tear of the road network. Your post (and others) sounds an awful like a 'minority whinge' to me

The sooner another tax is introduced the better

I don't think you understood what I posted. I was highlighting a point from those people clutching their pearls and squealing EVs are getting a "free ride" when in actual fact they don't, they still pay rego which pays for the state's roads. Excise goes to general revenue at the federal level and distributed from there.

[kypez]

Originally Posted by Wretched

I don't think you understood what I posted. I was highlighting a point from those people clutching their pearls and squealing EVs are getting a "free ride" when in actual fact they don't, they still pay rego which pays for the state's roads. Excise goes to general revenue at the federal level and distributed from there.

Some people, sadly, believe that LCT collected is used for road, like the GST on cars or in this case Fuel excise. They don't realise it's a cash grab by the federal govt to use however they please. Fuel excise is a terrible method of taxing people and it's starting to unravel for them.

[kypez]

Originally Posted by Trevor 57

and so did I when I bought my diesel Ranger and when working and when buying diesel - nothing new there ol' mate. Electricity is not taxed like petrol or diesel









why should I (through my diesel and petrol excises) subsidise your road use? e.g wear and tear of the road network. Your post (and others) sounds an awful like a 'minority whinge' to me



The sooner another tax is introduced the better

Why should I, buying an EV, have to pay LCT and regular tax rates to subsidise Ranger buyers? Your post (and others) sounds an awful like a "majority whinge" to me.

The sooner Tax breaks are removed for Dual cab utes and the introduction of LCT on them the better.

[Franco Cozzo]

Originally Posted by b0son

Except that logic goes out the window where trucks are concerned, because not only can there be fuel subsidies, the registration costs are not remotely proportionate to the amount car drivers pay for the mass they haul.

This decision is a bit of a double whammy to passenger vehicle ICE drivers TBH, who continue to prop up the road network while everyone gets a discount or a freebie.

I've got a heavy rigid truck with 24 tonne GVM - rego was only $2000, and I'm eligible for fuel tax credits on diesel.

Rego on my Fiesta ST is $742

Car is ridiculously expensive in comparison to the truck

[Trevor 57]

Originally Posted by Franco Cozzo

I've got a heavy rigid truck with 24 tonne GVM - rego was only $2000, and I'm eligible for fuel tax credits on diesel.

Rego on my Fiesta ST is $742

Car is ridiculously expensive in comparison to the truck

I live in regional Victoria, I pay more rego for my petrol 1997 Fairmont Ghia than I do for my 2016 diesel Ford Ranger

[Itsme]

Originally Posted by GO FURTHER

A win for EV owners in Victoria.

https://www.abc.net.au/news/2023-10-...-tax/102989942

A great win for the people of Victoria, current Government is a pack of greedy p***** hell bent on introducing new taxes to pay for their mismanagement of our economy.

[Franco Cozzo]

Originally Posted by Trevor 57

I live in regional Victoria, I pay more rego for my petrol 1997 Fairmont Ghia than I do for my 2016 diesel Ford Ranger

Same with me - my Thailand Special is a few hundred cheaper than the Fiesta ST

You can see all the incentives here stacking up for the LCVs - cheaper rego, tax advantages, no LCT.

The only thing is you get stiffed on tolls with LCV vs passenger car.

[T3rminator]

Originally Posted by Itsme

A great win for the people of Victoria who drive EVs.

There, fixed it

[roKWiz]

Originally Posted by Franco Cozzo

Same with me - my Thailand Special is a few hundred cheaper than the Fiesta ST

You can see all the incentives here stacking up for the LCVs - cheaper rego, tax advantages, no LCT.

The only thing is you get stiffed on tolls with LCV vs passenger car.

Reason being the ute is a 3 seater and the Fiesta is a 4-5 seater. Rego is the same but the TAC insurance component is dearer because of the number of seats (passengers) it needs to cover.

Trevors, rego's doesn't really make sense though based on both being the same seating capacity.

NB.
I would imagine half the EV owners took advantage of Government incentives with their solar array installs.

[Itsme]

Originally Posted by roKWiz

Reason being the ute is a 3 seater and the Fiesta is a 4-5 seater. Rego is the same but the TAC insurance component is dearer because of the number of seats (passengers) it needs to cover.

Trevors, rego's doesn't really make sense though based on both being the same seating capacity.

NB.
I would imagine half the EV owners took advantage of Government incentives with their solar array installs.

My dual cab ranger 3.2L (5 Seater) is cheaper than my wifes ford laser 1.6L, go figure!

Weird State of Victoria when it comes to fees.

[kypez]

Originally Posted by T3rminator

There, fixed it

Not really just them. It was a precursor to what they wanted to do to ICE cars as well. It's a win for both.

[roKWiz]

Originally Posted by Itsme

My dual cab ranger 3.2L (5 Seater) is cheaper than my wifes ford laser 1.6L, go figure!

Weird State of Victoria when it comes to fees.

Yeah weird, just re reading vicroads rego categories and a dual cab ute (5 seater) is cheaper than a Falcon 4 door ??? That doesn't make sense.

When I first had the van transferred to Vic from NSW, the sods charged me a station wagon rate for 2 years until I spotted SW on the rego and questioned it. They then lowered it to van/ute rate. Telling me the cost is basically calculated on the number of seats through TAC insurance.

The single drive prime mover isn't much dearer than the van.

[Trevor 57]

Originally Posted by T3rminator

There, fixed it

well done